Retail sucks — It’s because Omnichannel needs to be better

Try to think of a brand you know that sells only online or only offline.

Anjali Krishnan    6 mins

Retail sucks — It’s because Omnichannel needs to be better

Try to think of a brand you know that sells only online or only offline.

Hard isn’t it?

In a world where you could summon a box of fresh salmon straight off the boat on your smartphone or have a fresh supply of coffee beans turn up magically on your doorstep right when you’re about to run out, the very idea of not being natively omnichannel is a dire situation that no retailer dares be in.

It’s a scary thought because the power of intuitively knowing what your customers need or might want is a power only a few online retailers have at their disposal — Amazon in particular has devoted billions of dollars to capturing every bit of data about their consumers; the Amazon Echo being one such example.

Because that’s the power of having a thorough omnichannel strategy:

You understand your consumers’ needs and wants

You know who those consumers are connected to

You know which products or services those consumers use

Retailers these days can’t afford to be selling through a single medium when their customers flit across multiple channels each day. Most brands now offer various options to shop with them — but they struggle with integrating their operations in a cohesive manner leading to a disjointed shopping experiences for customers.

As complex as omnichannel?

The status quo is retailers who have been forced into multi-channel retail but haven’t yet mastered the art of omnichannel retail.

Multi-channel retail is the experience in each discrete retail channel while omnichannel needs to be looked at as an all encompassing corporate goal. Delivering a consistent, interconnected and uninterrupted customer experience across dozens of channels takes more than just disjointed multi-channel strategies.

In this, my second article on omnichannel retailing (here’s part 1), we focus on the three key areas that form the pillars of a successful omnichannel strategy:

1. Retail Infrastructure

2. Design Thinking

3. Integrated Data Systems

Infrastructure for Omnichannel [1]

Infrastructure is the hardest pillar of omnichannel success because it is both the foundation of a business and requires an in-depth knowledge of what customers want and when they want it.

Stores have a lot of options to structure themselves these days. This includes:

Everything from supply chain, customer service, logistics and fulfilment has to be geared towards omnichannel with a central system that controls and syncs all aspects of your business. I won’t get into the physical retail aspect of commerce (because that’s another article on its own), but there is another aspect of omnichannel that retailers have to straighten out — data.

Yes, yes, enough people have talked about collecting data, analysing data and using data — but what about structuring data?

Solution: Master Data Management (MDM)

Master Data Management is not a technology solution — it is a business method that enables an enterprise to link all of its data and provide a single point of reference. An easy example of this is Starbucks, which allows customers to make profile changes and update their balances on the app. These changes are updated across channels in real-time providing a seamless experience for the customer.

MDM allows cohesive operations and strategy across all departments, ranging from merchandising, purchasing, importing, delivery and sales. Most importantly, it allows customers to have a single seamless experience while the business machine transfers him/her through marketing, website profile, sales and finally purchase.

If customers have built a profile on a brand’s website, they shouldn’t have to repeat the same information to the salesperson in-store.

The catch with MDM is that it requires significant overhaul of business processes which is why companies often end up choosing stop-gap solutions.

Thinking Omnichannel [2]

How often have you walked into a swanky new store and then logged on later to check its website and found an atrociously outdated or brochure-like website? Sometimes, for fun, I test whether I can checkout any random item within 30 second … and I usually fail.

Shoppings’ mood killers — lots of whitespace and very little signposting (screenshot Hermes.com)

Now you might think 30 seconds is not that long.

But over a third of online shoppers will leave a website if it doesn’t load in 5 seconds, so it’s highly unlikely they will spend more than half a minute hunting on a website for what they need.

The other issue is design. A website that looks out of date will immediately turn off customers who might have been impressed with your store front. Now obviously the web designer doesn’t interface with your merchandising or marketing team because that would be crazy and chaotic.

But who’s thinking of the brand’s overall consistency and messaging?

An excellent example of consistent brand messaging is REI. All their stores are uniquely designed yet, all stores have a strong underlying theme. It’s very easy to link each unique store AND the website to REI Co-op.

Rugged on the site

Rugged in-store

The customer doesn’t have to think about or read the name — she/he subconsciously knows it’s REI Co-op the moment the website loads.

By the way, it does load pretty fast.

Solution: Teams and leaders dedicated to planning omnichannel

It is vital to have dedicated resources, teams and leaders in charge of omnichannel design and thinking about customer journey from first engagement to conversion. A disjointed system of projects and ad hoc measures can only take you to multi-channel retailing, but not beyond.

Isolated Inventory Management = Broken Omnichannel [3]

For omnichannel retailing to work, your systems must talk to each other smoothly. And they can’t talk to each other smoothly if each one is singing its own tune in isolated silos.

A lot of sales avenues now available to retailers have matured within the last 10 years or so. But the legacy systems that power departments like procurement, merchandising, marketing, sales and fulfilment have been around for longer and are entrenched into the system. To top it off, these legacy systems almost always have a second layer of custom-built systems that enable different departments to work with each other.

Scenario 1

Now, the problem arises when a customer likes a shoe on your website and walks into your store to try it.

But the shoe isn’t available. And the salesperson doesn’t know where it can be found.

This is made much worse by the fact that display ads showing that exact shoe have been following the customer all week!

Scenario 2

Here is a better (or worse?) scenario. Have you clicked on an ad for an attractive looking item — a cute dress or a snazzy looking Adventure Time art collectible — only to find that the link leads to the homepage of the website, without a trace of the product you were interested in?

Yes, art collectibles are pretty great (via MightyJaxx)

This happens because the ad agency that was running these Facebook ads was given an outdated creative brief. Meanwhile, merchandising went ahead and updated the catalog without updating the ad agency.

According to Deloitte Digital’s 2016 Holiday Survey, 66% of customers will first look at an item online before making an in store purchase. Imagine the frustration that these customers will endure after viewing an item online, and being followed by the item for weeks through display ads, only to find that the nearest store doesn’t actually stock it.

Solution: Product Information Management (PIM) Systems

Product Information Management systems are vital to achieving a fluid retail strategy. Unlike MDM, PIM systems are technical solutions that allow businesses to centrally manage information about all their of products and ease the coordination required to market and sell products through various distribution channels.

This centralised product metadata can then be used to feed information to the marketing department for print catalogs, the merchandising department for websites and even to trading partners or logistics providers who require rich data feeds.

Companies are struggling to do omnichannel retail effectively not because they don’t see a need but because it is very hard. Top-down vision and bottom-up initiatives need to align with more accuracy than ever before.

Want to jumpstart your PIM systems with structured product data including names, images & descriptions using UPCs or ASINs?

Check out Semantics3 (free trial).

Published at: April 25, 2017

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