What Does an Omni Channel Environment Look Like?
The Omni Channel is not simply e-commerce and it is more than an operating environment. Overcoming the challenges associated with most Omni Channel environments involves looking at their overall business operating structure. That includes clarifying not only the type of business model they are currently targeting but their long-term strategy.
It is no longer enough to excel at maximizing warehouse management, logistics and distribution. The journey now must include the entire supply chain from the design, product development, manufacturing, procurement stages to customer relationship management. This top-level view is critical to determine the best strategy required to support the Omni Channel’s needs. It is a journey that all facets of the supply chain must be able to trace for many reasons including the complexity of geography, product offering, changing consumer demands and online competitive pricing. These have all put significant pressure on every touchpoint.
Issues
Most retailers have the data, the inventory records, customers’ records, product directory and a website – overwhelmingly the trouble is that many do not have systems that integrate all this information.
While many retailers have invested a significant portion of their money into upgrading technology, it is essential to take a serious look at the risks inherent in trying to integrate vastly different processes and systems, as some of these technologies can prove to be fragile and fail when implemented.
We live in an increasingly impatient customer world; consumers want to go online and quickly serve themselves, gleaning pricing, availability and delivery times from a retail website. The customer wants their product shipped conveniently to their preferred doorstep. The standard has been set high by the consumer as they continue to shape the future of the Omni Channel Retail, creating these blurred lines between online and brick & mortar (B&M).
Immediate visibility of inventory across the entire enterprise and orchestration of customer orders to and from all possible points of purchase and all possible points of fulfillment are daunting. There also is obviously a significant issue in addressing customer expectations for the handling of returns – some to B&M if available, some expecting free shipping and returns.
Omnichannel is a fantastic avenue for the consumer, but the upfront costs are a major concern for many retailers. Speed to serve customers and same-day delivery is one thing, but global shipping (an ever-increasing option), brings a whole set of different challenges in delivery when considering taxes & duties, both when purchased and returned.
Time spent on mobile devices is increasing at such a rapid rate, that it will, if it has not already, surpassing the amount of time being spent on desktops/laptops. The consumer expects the same experience to be translated to their mobile devices.
Consumers are not responding to traditional sales or marketing tactics. With channel-specific pricing, customers are confused and frustrated, leaving a negative impression and lost sales if prices vary greatly without proper explanation as some retailers have already experienced cross-retailing in the U.S. and Canada. Often, as a result of the ever-increasing social media channels, sometimes the customers know more than the sales associate in the retail store channel.
Much of the online sales volume is the result of consumers redirecting part of their purchases from B&M to online. It is not necessarily incremental retail sales or an increase in spending, merely a shift in channel. This lack of additional sales for some retailers is a big hit as many industries are facing cost-cutting.
It is this digital interaction, fully integrated where possible, that needs to happen in tandem by leveraging customer data across social channels using unstructured data – filtering the right kinds of insights to create relevant customer experiences and/or rewards programs that increase brand loyalty.
Implications
Fulfilling consumer expectations require a combination of strategy, business processes and technology to provide the Omni Channel experience.
The need is to approach customers holistically because the consumer expects everything to be readily available at their fingertips. Not only do retailers need to be armed with numerous ways to reach consumers, but it is the integration of all these processes that must be solved. It requires clear real-time visibility of inventory, flawless logic to synchronize shipments and orders from multiple distribution locations, plus the ability to understand dissimilar shipping formats, order processing, and billing practices.
Most traditional IT infrastructures do not have the scalability or elasticity to allow easy access to data by multiple users and they are not equipped to handle massive amounts of structured and unstructured data required in unifying strategic efforts.
Tearing down old systems and building new ones from scratch is time-consuming, costly, not to mention incredibly disruptive. But it is the organizational structure that remains the hurdle to growth. Defining the IT roadmap is the single most important, if not one of the greatest challenges, requiring collaboration and foresight between design, merchandising, sourcing, distribution, store operations, marketing and IT.
Solutions
Potential solutions to be considered:
- Strategic collaboration of all departments with IT being the enabler of the roadmap.
- Outsourcing IT systems or investing in Cloud storage for elasticity and scalability. It is the unifying of
data to scale marketing efforts and reach the right users with the right message at the right time. As well,
outsourcing to third party IT services because the technology is changing so fast that (staffing) hiring
experts to manage systems is really difficult.
Where possible, provide the same (equivalent) pricing across all channels.
Brick & Mortar
B&M retailing is here to stay – physical stores exist for many reasons including the ability to provide consumers with the opportunity to experience the product. It is this that is the story of the brand/retail experience.
The retailer must offer additional services or enhanced customer experiences that are only possible in person, not only keeping the retail space relevant but often it comes down to a service that an associate is able to provide, building brand loyalty and establishing a personal rapport not possible in digital format.
Old fashioned good customer service is what the customer really wants. A store is no longer just a store, but the space where opinions, reviews, expectations, social media, technology, and attitude create connections. B&M stores are more important than ever in their sales associates’ ability to connect with customers.
