Changes in customer buying habits over recent years have led to a rapid reshaping of the retail industry towards a more global and interconnected model. Customers just want to shop, and as far as they’re concerned it’s the same brand or company whether they buy online, in store or through an app. They don’t consider each of these methods as separate channels, and neither should retailers. This dramatic change in customer expectations means that developing the systems, processes and partnerships to allow the perfect omnichannel customer experience has become a top priority for many fashion stores.
However, there are still barriers in place for many businesses, which make implementation difficult and prevents omnichannel retail from being the truly seamless solution it could be.
1. Separate stock inventories prevent omnichannel retail
Omnichannel retail means a customer focused approach and one single, clear view of stock across the entire business. No matter whether customers buy from a physical store, a web site, a catalogue, or on mobile platforms, it is fulfilled from one central inventory. This allows stock to be in the right place, at the right time, and provides a more seamless experience for customers, giving them a consistent service regardless of how they choose to shop.
Separate stock inventories are common though, and were a natural consequence of the dramatic growth of e-commerce. However, this separation now causes major headaches for retailers as they try to provide a positive omnichannel customer experience. Without a single view across the total stock estate, customers shopping online may be told that a product is no longer available, even if the item they want is sitting unsold in a store. This inefficiency often means more merchandise has to be bought, which increases the likelihood of later markdowns to clear unsold stock and results in varied retail fulfilment processes being followed with different stock inventories.
Whilst a significant barrier and one that depends on other factors to be realised, a single view of stock brings with it numerous advantages beyond improved omnichannel customer experience. Increased flexibility in stock fulfilment can lead to a decreased need for end of season discounts and also reduces the warehousing space required by retailers, as there is less out of season stock to return from stores to the warehouse.
2. Different products, prices and promotions across channels
Many retailers stock a variety of different products across each of their channels. Some items could be an online exclusive or only available in certain flagship stores, and sale stock can often differ between channels. A promotion may also be applied to an item online, but not in store, and an increasing number of retailers now offer online-only discount codes.
This can make ordering confusing, and sometimes even disappointing for shoppers who may purchase an item in store, only to find out they could have saved money by ordering it from the same retailer online.
As well as making omnichannel retail possible, a single set of products, prices and promotions creates a seamless customer experience and makes managing marketing activity easier for businesses.
3. No single database of buyer detail, orders and refunds risks damage to the omnichannel customer experience
Without the ability to see a single view of each customer and their orders, it becomes impossible for retailers to respond quickly and effectively to enquiries. This can also create restrictions on how customers are able to return items, and an over complicated returns process can often lead to poor omnichannel customer experience.
No matter how a customer chooses to order, they should be able to return any unwanted items through the channel which is easiest for them. To make this practical to implement, businesses must have a single database for tracking all orders placed. This means a customer can walk into a store with their online purchase, and the staff there will be able to access their order details, process the return and provide a refund immediately.
A single customer database also allows for better analysis of transactions and can help retailers deliver more targeted and relevant marketing to customers. By harnessing this wealth of customer data, retailers can create unique shopping experiences tailored to each individual customer. This could include personalised content, exclusive offers on their favourite brands or products, and loyalty schemes to encourage repeat custom. Pushing this even further, forward-thinking retailers are beginning to use this data to adapt website content in real-time, as a direct response to the actions of customers as they browse. Leveraging data in this way offers a powerful advantage to retailers, allowing them to respond to customer needs in a flexible and agile manner.
4. Omnichannel retail cannot work without systems integration
Systems are often highly specialised for the specific tasks they need to perform and may work completely independently of other systems within the same business. For example, when delivery to stores, systems are set up to track pallets or cases, whereas delivery to customers requires a system which can track and manage individual orders, including units, SKU codes and serial numbers. Stores may also have their own stock management systems in place to track their inventory. Various systems need to be brought together to accurately manage stock levels and data must be updated in real-time to achieve a single view of all stock within the business.
With information often existing in isolation within a number of separate systems, retailers need to find a way to integrate these sources to allow data to be consolidated into a single main repository. In doing this, product information, stock amounts and customer data is then made readily available across all touchpoints and to all logistics partners.
Providing detail when and where it’s needed allows for far better distribution of stock and quicker delivery to customers, which results in improved retailer profits and a seamless omnichannel customer experience.
5. Inconsistency of omnichannel customer experience
Even with systems in place to handle the technical aspects of omnichannel retail, businesses with a diverse retail fulfilment network can run the risk of inconsistency in their delivery and poor omnichannel customer experience.
Ecommerce retail fulfilment of customer orders from store has its advantages, yet can be one of the hardest parts of the chain to get right. Sales staff are traditionally trained in customer service and may not be equipped with the knowledge or skills needed to take care of omnichannel ecommerce fulfilment. Managing store operations around picking, packing and shipping can also be a challenge. Specialist staff may need to be employed, and current staff will need to undergo extra training to ensure they can carry out the required actions to the right standards.
If shipping from stores, teams will need to be supplied with identical packing equipment and materials to allow items to be packaged in the same manner as the fulfilment centre. Staff will also need to be given specialist tools to allow them to do their job effectively in a store based environment.
Training of staff can be a time consuming and costly exercise to reach the high standards many retailers demand. Longer term cost savings over time through more efficient use of stock will offset this though, and additional in store services such as gift wrapping can lead to new revenue streams. It can also provide a commercial advantage, such as in the case of internet orders where stock is only available at stores. This can create an opportunity for stores to accept the order and boost their sales.
6. The cost of omnichannel retail
Many businesses currently lack the necessary frameworks, resources and capabilities to achieve omnichannel retail within their existing systems. In order to reap the benefits of this approach, many retailers will need to completely overhaul their current way of working.
The cost of new systems, training staff and a move towards a single stock inventory all add up to a considerable initial investment for retailers. In an increasingly competitive market where customer experience comes at a high price and with many traditional retailers finding the high street a difficult place to make profit, this upfront cost can prove a significant barrier.
Whilst the upfront costs are high, the additional efficiencies of omnichannel retail can be extremely appealing to retailers and with many competitors making the move, it’s hard to put off. However, the risks of a poorly implemented move to this approach can have serious repercussions, so careful planning and selection of partners and systems is necessary to avoid money and time being wasted.
7. Inflexible partners make omnichannel retail impossible
Despite extensive training, investment and change, retailers that work with inflexible logistics partners will find omnichannel retail impossible to achieve. Unified retail stock can be claimed by many logistics providers, but omnichannel retail fulfilment will often expose inefficiency of approach taken. Unfortunately, retailers can be caught out here and customer experience can be significantly damaged.
A flexible logistics firm will understand the critical nature of systems integration and be proactive in their move towards single databases for both stock and customers.
Increased competition and customer expectations make omnichannel retail a necessity
Customer expectations are increasing rapidly, with next day delivery and perfect brand experience now a key requirement instead of a nice to have. It’s therefore incredibly important for retailers to get this right the first time. Failing to meet these customer demands, will leave retailers struggling to keep up in the future and falling behind competitors who do. It’s only through careful investment, selection of systems, integration, training and the right choice of logistics partners that retailers can offer seamless omnichannel customer experience regardless of where an order is placed and how it is delivered.
Mark Webb is managing director of CMLImage credits:
- Image courtesy of CML