When it comes to nice to haves versus need to haves, omnichannel clearly falls into the latter category. Most store executives have come to recognize that this retail strategy is the only way to compete in a world in which consumer journeys are circuitous to say the least. But knowing when and where consumers are shopping and being able to service them at every touch point is easier said than done.
A recent report from retail management systems provider Brightpearl in coordination with Multichannel Merchant revealed the results of a 352-person survey, which quizzed retailers on how well they’ve been able to implement their strategies, the tools they need to take them to the next level and the benefits an omnichannel retailer can expect to garner.
“The promise of omnichannel is very significant,” the report noted. “Many retailers and brands need to take the time to assess their progress, identify the gaps and move ahead with a new commitment to their omnichannel strategy. As one retailer said in the survey, it’s about survival.”
First things first
The first task for companies looking to improve on omnichannel, or implement it, is to come to a consensus on what it means for their organization and what they hope to gain.
While there are many definitions, two-thirds of respondents understand the term to mean being able to transact with customers in different ways, delivering on seamless customer service and marketing that’s appropriate across all channels.
Four years ago, fewer than half of retailers were pursuing an omnichannel approach. Today, 90 percent of brands and retailers have a strategy in place or a plan to invest in one soon.
While the move toward omnichannel has been rapid, for most companies, it’s not a done deal. In fact, 55 percent of respondents characterize their omni efforts as “a work in progress.” Only 8 percent say they’ve mastered it and another 5 percent feel they’re close to nailing it. For 19 percent, implementing this strategy is far off.
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But, the report said, it may be wrong to think of ominichannel as something an enterprise will ever stop working toward perfecting. As an example, Brightpearl points to e-commerce and social media. While most retailers have come a long way on both, it took time and they’re still tweaking their implementation as consumer needs change. So too with omnichannel.
Pain points
When the survey probed participants about why they feel this strategy is important, Brightpearl found customer-centric motivations trump external factors. Sixty-six percent of those polled see omnichannel as a means for delivering better customer service and 54 percent are using it to boost sales. Forty-five percent see omni as a means to competitive differentiation and only 7 percent are pursuing it to beat Amazon specifically.
While the vast majority of the industry agrees that omnichannel is a must, companies face challenges in driving the updates and changes needed to fully implement the strategy. Of those that responded, 61 percent cited budget pressure and margin compression as hurdles to enhancing their strategy. Creating usable insights from their data is a concern for 58 percent, and 52 percent have trouble integrating sales channels.
The next biggest issue centers around technology. The survey found that 45 percent of companies lack the technology they need to realize their goals. Only 12 percent feel comfortable with the tools they have in place, while 43 percent anticipate that the tech they have now, while sufficient, will probably need to be overhauled in the future.
Yet another area of concern is executives who just don’t seem to get how omnichannel could impact their businesses for the better. Here, 43 percent of those polled say they struggle to demonstrate ROI.
Goals
The report found that retailers and brands are keen on omnichannel because they see opportunities across a wide range of functions. The top three, according to those polled, are to extend loyalty programs across channels (57 percent), offer promotions across channels (57 percent), improve their ability to analyze customer behavior (56 percent). Beyond these, they indicated about a dozen more goals.
Brightpearl said the variety of answers “is really about integrating a number of customer service, marketing communications, sales management and fulfillment tasks enabled by technology…This wide range of aspirations also speaks to the complexity in the retail industry today with so many channels and so much data generated by these transactions.”
Looking ahead, those polled shared the services they’re actively working toward providing. Of the capabilities they plan to roll out in the next six months, two stood out: 30 percent said delivering seamless customer experiences across channels and 24 percent said marketing strategies geared toward conversions on any channel. In the next year, the two top goals for 24 percent of respondents are marketing again as well as providing a unified customer account that shows consumers’ order histories across channels.
Ultimately, the report found that though retailers acknowledge the opportunities inherent in omnichannel, they’re facing challenges in getting where they want to be—and the current flux in the retail landscape isn’t helping.
“This transformation is the main reason why retailers are looking to omnichannel strategies and technology in the first place. But there is a conundrum. Many retailers are experiencing sales challenges and margin compression especially at their physical stores,” Brightpearl noted, adding this limits budgets and makes it difficult to focus. “Retailers need to invest more time and resources to effectively implement their omnichannel strategies, but they are distracted by other issues.”