HOW IS OMNICHANNEL CHALLENGING RETAILERS TODAY?
Customers do not see channels. They see only one vendor and act on their desire to buy something from them. The single biggest challenge with omnichannel for retailers is identifying where the customer is in their journey. Many can’t find or adequately identify customers and therefore can’t communicate with them either from a brand or single enterprise perspective.
HOW IS THIS CHANGING CUSTOMER/RETAILER INTERACTIONS?
If retailers don’t get omnichannel right, the customer will simply go elsewhere – and this omnichannel struggle extends to stores too. PFS runs an audit for retailers, working against a checklist, with store visits and interviews with the retailer’s staff to get a true sense of what’s happening with failing stores. In many cases we’ve found that this channel, which is the most expensive for retailers to operate, is failing to meet customer expectations. The same basic errors occur repeatedly amongst US retailers: merchandising doesn’t offer clear choices; sizes are unavailable in store and there is no clarity on whether they are available online.
The National Retail Federation found that 46% of retailers in the US that offer pick up in store don’t have signage in store to show customer where to go. Shoppers who fail to obtain what they are looking to buy in store turn to online. However, having a strong online offering is not always enough. The second omnichannel challenge is that retailers have to offer the services that customers want. Some 80% of consumers in the US want
1 day or same-day delivery and retailers that don’t recognise the trend are sending their customers to Amazon or other online vendors who have the delivery experience their customers desire. To offer the right omnichannel services you need to pay close attention to your customers.
Look at successful retailers such as Apple which does a phenomenal job of understanding what its customers are doing at every touchpoint be that in store, online or in its membership-based Apple Music channel. It listens intently to customers and responds accordingly moving quickly in directions where it sees its customers going. Retailers have to find ways to make use of their customer data, understand and intuit from it and also do some very consistent processes of continuous improvement: audit your performance, respond to your audit and give your customers better value. Better value isn’t necessarily just price. It’s a customer experience that fits with their desire.
“To offer the right omnichannel services you need to pay close attention to your customers”
WHAT IMPACT IS IT HAVING ON THE ENTERPRISE?
Omnichannel has been putting a tax on technology teams within retail organisations as they try to keep up with the level of resources, skill sets and new technologies that omnichannel and continually changing customer behaviour require. It’s in retailers’ best interest to partner with an organisation which understands and uses new technologies regularly and delivers to a wide set of companies with different experiences and can therefore understand how to best exploit technology and deliver in the best timeframe.
One retailer which tried to internalise this is Nordstrom. The US department store group initially invested heavily in technology but in the past few years it has changed its model to partnering and purchasing technology through acquisition. These acquisitions also brought them the companies’ tech teams and consumer insight.
IS THERE A BEST PRACTICE APPROACH TO OMNICHANNEL?
Omnichannel is about the entire enterprise not just what happens in store or online. PFS delivers an omnichannel audit to customers which looks at technology, technology infrastructure, marketing and marketing infrastructure, development team and processes, store and operations, business processes and operations. PFS also focuses on re-uniting the channels for retailers – looking at inventory visibility throughout the enterprise, maybe even back to manufacture which gives a clear vision of the supply chain and how they can deliver to demand as well as giving the customer the ability to know where to find what they want. If you gain full visibility of the supply chain you can move product to the customer in the quickest way possible and this enables faster shipping, for instance.
IS THERE AN END POINT TO OMNICHANNEL CHANGE?
Retail doesn’t stand still. No two retailers are exactly alike and each one is in a particular place in their own omnichannel journey, hence the need for organisational audits. A roadmap identifies where the company is on the journey and what needs to be implemented, in what timeframe in order to meet customer needs in the particular market. From understanding the needs of the customer for that specific retailer, the sector in which they operate and the position the retailer is in, the audit can identify and plan the best omnichannel journey to be followed. This roadmap needs to be updated regularly in order to continually deliver improvements to the customer experience. For retailers, it is possible to be in a win:win situation with customers but you have to keep your eye on the ball. This Company Spotlight was produced by InternetRetailing and paid for by PFS. Funding articles in this way allows us to explore topics and present relevant services and information that we believe our readers will find of interest.
CUSTOMER CASE STUDY
Based in Toronto and founded in 1973, Roots is a leading lifestyle brand committed to protecting the environment and producing quality, sustainable goods inspired by their rich Canadian heritage – whether it’s athletic wear, leather goods, yoga outfitting, accessories, or home furnishings. The brand rapidly but steadily expanded with the help of PFS’s highly customised end-to-end, omnichannel commerce solution.
With 120 locations in North America, 100 additional stores in Asia, and shipping to over 70 countries worldwide, Roots is truly a global story. Like many multichannel apparel retailers, Roots faced a significant supply chain management challenge, making it difficult to match supply to consumer demand across multiple channels. When the product the consumer wanted to buy was not available in the location they wanted to buy it – online or in-store – the sale was often lost. Roots knew that they needed to make their entire inventory available to sell across all channels, but they wrestled with finding the right technology solution that could deliver on the promises of omnichannel retailing.
As a longstanding partner, Roots collaborated with PFS to deliver the solution they were seeking. PFS developed and deployed a comprehensive omnichannel commerce solution comprised of four key components: Ship-From-Store Program: Store inventory was made available to sell to online shoppers. Orders are routed to PFS’s fulfilment centre or to a retail store depending on availability. Store associates use a web-based fulfilment application to pick, pack,
and ship the order. Store Availability, In-Store Pick Up: Roots’ shoppers can check availability in surrounding stores with a postal code search or GPS location.
If a product is not available at a requested location the consumer can opt to have their order shipped to and picked up at the desired store. “Roots Delivers” Endless Aisle Program in Retail Stores: Roots store associates are able to “save the sale” when sold out of the item the customer desires. The associate can see product availability across the entire enterprise and can place an order to be shipped to the customer’s home with free shipping. Buy Online, Return to Store: Products purchased online can be returned to any Roots store location for a refund to the form of payment used online. Roots store associates are able to find the online transaction and enter a return transaction.
Customers now have a smoother in-store return experience and the stores can process online returns without a negative impact to their net sales. The new omnichannel solutions produced tremendous results for Roots with a significant lift across several key performance indicator metrics: • 160% increase in online sales; • 83% increase in conversion rate; • 59% increase in average items per order. With their brick-and-mortar retail networks now seamlessly married with their online presence, Roots offers a convenient and flexible path-to-purchase to its customers.
PFS IN BRIEF
- Date launched: Established in the US in 1994. Launched in Europe in 1999 and the UK in 2014.
- Global reach: PFS has a global reach working from 15 locations in the US, Europe and India. Turnover: $334.6m (£259m) in FY2016.
- Customers: Over 170 world-class brands including P&G, Asics [IRDX RASI], L’Oréal and Pandora [IRDX RPAN]. Employees: ~2,600 Partners: PFS is a solution-agnostic provider working globally with the leading enterprise platforms including Salesforce Commerce Cloud, Salesforce Marketing Cloud, SAP, Magento, IBM and Oracle ATG. In the UK market, the company also partners with Qubit, Amplience, Monetate, Tealium, Adyen, InRiver, Bazaarvoice, Rackspace and Mirakl.
Mentioned in this piece…
Pandora is an international Danish jewelry manufacturer founded in 1982 by Per Enevoldsen. The company has it’s headquarters in Copenhagen, Denmark. PANDORA employs over 9,000 people worldwide of whom 7,000 are located in Gemopolis, Thailand, where the company manufactures its jewelry. PANDORA is publicly listed on the NASDAQ OMX Copenhagen stock exchange in Denmark. (more…)