Andrea Dorfman
Andrea Dorfman
Content Manager

2015 is the year retailers need to make omni-channel customer engagement a priority, because customers do not think in terms of channels…brick and mortar stores, websites, mobile sites, social channels, customer service…it’s all a big blur to them. Smart retailers are starting to look at their business with the same channel-agnostic perspective, implementing an omni-channel strategy for a more holistic view of the customer journey and brand experience.

At the root of success is connected retail e-commerce technology linking customer data including orders, products and preferences across all touchpoints in order to drive contextual and personal interactions on every channel, any device. Which includes the ability to buy anywhere with a choice of fulfillment options, whether it’s traditional cash and carry or home delivery, or new options like ship-to-store, ship-from store, or pick-up in store.

This interconnectedness is expected to not only have a significant impact on retail e-commerce sales within the next year or two, but it will also breathe new life into the physical store, which should be greatly welcomed news for retailers.

What goes around comes around – the new role of the store

Foot traffic is down and online sales are up. For those not being forced to close their doors, many retailers are re-assessing everything from store design, location and space to distribution networks, while increasing their online and mobile commerce capabilities.

Because even though the gradual shift towards e-commerce is forcing an industry transformation, many businesses are realizing that brick and mortar still plays a major role in omni-channel shopping experiences. In fact, according to a study entitled "Recasting the Retail Store in Today's Omnichannel World", in-store is still the shopping channel of choice in the US and the UK for consumers of all ages. But despite that fact, the Web plays a huge role in the offline purchase decision. According to an MIT article on e-commerce, 80% of store shoppers check prices online first, and one-third acces the information on their mobile device while actually inside the store.

In a Forrester blog by Analyst Zia Daniell, Four Takeaways From an Evening of Omnichannel Retail in New York, she stated that the Web already has significant impact on the majority of the $3 trillion US retail market, including online and offline transactions. 

So, now that e-commerce is booming, the omni-channel imperative is to bring the ease and convenience of online shopping back into the store. This new channel-agnostic approach is both appealing and persuasive, combining technology with old-time values: The pleasure of a touch-and-feel shopping experience plus all the advantages of online shopping, and a more personal service like the local ‘mom and pop shops’ of the good old days. Or as the infamous theme song of the 1980's hit TV show Cheers articulates, “sometimes you wanna go where everybody knows your name”.

Perhaps even more enticing to retailers making the transformation to omni-channel is that by leveraging the power of e-commerce to drive customers to the store, they also create great opportunities to boost sales, because consumers tend to spend more money than planned when shopping in-store vs. online (impulse buys), and are even willing to spend more for excellent service.

So yes, bricks are still crucial in the mix, and retailers should ensure brick and mortar is fundamental in their omni-channel strategy. All the while considering changes to the stores themselves to adapt to this new reality. The Globe and Mail posted a recent article about just this entitled Retail reboot: How e-commerce is forcing an industry transformation,  revealing how  big-box chains like Best Buy and Staples are scaling back by closing stores and/or shrinking them, while at the same time opening smaller stores. Others are cutting back on retail space in certain locations in order to expand the storage areas to serve as actual distribution centers for online orders (pick-up in store). Another strategy being tested is reducing store inventory and equipping salespeople with tablets to help shoppers order merchandise not in stock.

But the most important aspect of all this change is to maintain a customer-centric approach throughout. It’s all about how to get the customers what they want when they want it.

Delivering the goods

One of the biggest challenges for today's omni-channel retailer is getting orders to customers as fast and cost efficiently as possible. Customers expect price transparency and consistency across channels, not caring that e-commerce orders have a lot of hidden costs for fulfillment. This leaves retailers trying to find the right strategy and business model for this ‘last mile’ in order to meet customer expectations, like free shipping and same-day delivery (thank you Amazon). 

Today’s consumer also likes choices, so if you have flexible options, for example allowing them to order online and pick-up in store, you're on the right path to omni-channel success. And significant savings, as it can be up to three times more expensive for a merchant to ship an item directly to the customer vs. stocking stores and having customers pick it up. Using stores to double as ship-from-store fulfillment centers makes perfect business sense, reducing ongoing operational costs and capital expenditures associated with building more fulfillment centers to accommodate rising online and mobile purchases, plus potentially boost inventory turn and gross margin.

It's a win for everyone. From a customer perspective it’s much faster and sometimes more convenient than waiting for home delivery. From a retailer’s perspective, every time you drive someone to your store you have the potential to get incremental sales, impulse buys, and deliver another exceptionally memorable personal experience.

Foregone conclusion

Implementing an omni-channel strategy will help you greatly benefit from the e-commerce boom. By boosting traffic online and instore you’re more likely to drive repeat purchases, increase share of wallet, and dramatically improve conversions. Not to mention satiate your customer’s needs and expectations, while allowing you to cut costs, improve productivity, keep pricing competitive and maintain control of inventory. 

Andrea.