Customers are channel blind – they just want an excellent retail experience. Yet retailers persisting with fragmented, omnichannel strategies are damaging consumer experiences, undermining retail respect and actively encouraging consumer behaviours – from discount only buying to more frequent returns – that is destroying retail profitability.
Craig Summers, managing director UK at Manhattan Associates, asks why so many retailers are failing to focus on delivering a single, perfect customer experience?
After a decade of omnichannel retailing, it should not be news to retailers that customers buy from a brand, not a channel. And yet, channel-specific policies persist; policies that not only undermine the quality of the customer experience but actively jeopardise brand perception.
How, for example, can any retailer justify an ‘online only’ price when it also has bricks and mortar stores? Just consider the experience endured by the customer who has seen a price online but prefers to pop into the nearest store, only to discover the price is 20% higher. The retailer generously offering to ‘price match’ its own website – only when the difference is pointed out by a somewhat miffed customer – is a clear example of the way omnichannel retail strategies are damaging customer perception and experience.
Similarly, consider the customer receiving marketing emails promoting specific products at a low cost – click through, and every single promotional item is out of stock. This is, plain and simple, bad retail thinking. While the retail strategy may appear to be ‘customer first’, the customer experience is completely at odds with this pledge. Where is the respect for the customer? How do fragmented pricing and dated promotions demonstrate the retailer values the customer in any way?
This confused and confusing retail behaviour is undermining already fragile customer confidence and, even worse, encouraging customers to buy only on price. Enticing customers with an online-only price promise doesn’t simply drive customers away from the store; it prompts them to price compare with the competition. It also encourages new behaviours that are further jeopardising retail profitability – such as ordering ten items with a view to returning nine.
Fragmenting the retail experience has only one outcome: it devalues the experience and that retail brand for the customer. Without loyalty or respect, customers will merely escalate those behaviours that fundamentally undermine retail profitability. Buying only on discount and increasing returns is devastating retail performance – and, to an extent, it is retailers’ inability to provide a consistent, end to end experience that is contributing to this behaviour.
So what is the answer? How can retailers reflect customers’ desire for a consistent brand experience irrespective of a channel? The key has to be information visibility: with complete and up to date insight into the location of every piece of inventory, from store to warehouse, even in transit, retailers can ensure the divide between channels is breached – and avoid that dangerous omnichannel fragmentation.
Combining this inventory accuracy with effective order management also ensures the customer can gain access to the product irrespective of location – whether ordered online, purchased in-store, or ordered by a Store Associate for home delivery. Also, this single source of information provides an essential platform for understanding the complete cost of retail sale – rather than the channel specific costs that can be both inaccurate and misleading. With this transparency and deep insight, retailers can fine tune the overall offer to match both customer behaviour and expectation, at the same time as ensuring every sales transaction is a profitable one.
Customers may behave in an omnichannel fashion – checking prices via mobile while standing in-store, for example; but they don’t think channel, and they certainly don’t think omnichannel. Retailers need to reflect and support this customer sentiment: success is not about giving customers a robust omnichannel experience; it is about giving customers an excellent retail experience, every time.
Author: Craig Summers, managing director UK at Manhattan Associates