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Is it time to take the channel out of omnichannel retailing?

 

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As the various retail sales channels have evolved at different times, most organisations have built and managed systems to address those channels individually. However, we’re now at a turning point where those individual legacy systems can no longer meet the demands of the consumer. With cross-channel shopping now accounting for upwards of 40 per cent of total retail revenue, retailers cannot afford to miss out on such a large piece of the sales puzzle.

Retailers now understand that their omnichannel strategy needs to focus on much more than simply supporting the various sales channels through which consumers shop. All of those channels must be woven together into one cohesive structure. The next step retailers need to take is ensuring that the structure is flexible and supported by knowledgeable, empowered in-store sales people or customer service staff. Those salespeople provide a key link creating the experience today’s savvy customers demand, as well as an invaluable opportunity to cross-sell and up-sell, increase customer lifetime value and build stronger customer relationships. So how can retailers create that modern experience required to stay on top?

Frictionless experience

Within the current omnichannel model, the role of the in-store salesperson is becoming more important than ever. The fact that mobile toting consumers have more information than the retail salespeople has become widely recognised. But what is the longer term implication of this divergence between store salesperson and consumer knowledge, especially in the increasingly important click and collect scenario?

Of course, if everything goes smoothly and the customer simply collects the item, likes it and goes away happy, it’s all good. When a problem arises—if the customer doesn’t like the product and wants to swap it for another, for example—the whole situation gets far more complicated and a retailer’s lack of end to end sales support becomes evident. Today just a handful of retailers can offer a single swipe option in this situation, requiring customers to embark upon a frustratingly complex mix of cancelled and new transactions.

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Consumers want a frictionless experience. That means buying online, collecting in-store, swapping their purchase for a product of different value or spending vouchers to buy something a little more expensive—all in one transaction. It also means an in-store experience that includes pertinent recommendations—a pair of shoes to go with the dress bought last week; a cashmere throw to balance the cushions being collected today. Today, just a few retailers—the world’s most innovative—have the tools, technologies and processes in place that empower their sales people to deliver that quality of experience.

Empowered salespeople

It is becoming imperative to arm salespeople with, at the very least, the same information available to the consumer. But that should be just the start. The entire experience should be different. The salesperson needs to have the right tools, knowledge, attitude and level of authority to deliver a great in-store experience.

So what does that mean in practice? There should be no need for in-store salespeople to ever leave the customer’s side—no sliding back to the returns desk to undertake a transaction or back to the till to check stock. This should be a seamless experience that combines inventory, product and customer information to present salespeople with a range of customer specific options. For example reallocating stock from a nearby store or offering free delivery—all to ensure the sale is saved and that the customer leaves satisfied—even without the specific product they entered the store to buy.

Of course to get this right requires more than the essential visibility and availability of product across the network. There’s a profit implication behind every fulfilment decision made, meaning the retailer needs to think about not just optimising the customer experience but ensuring the execution of the fulfilment process is cost efficient. Should loyal customers have free click and collect? What is the financial implication of offering to transfer a product from one store to the next that afternoon while the customer enjoys a free coffee in a nearby café?

With the right level of insight, the opportunities to differentiate the in-store experience are clear, but retailers need to understand and optimise based on a range of continually evolving criteria from product age to distribution cost and customer value. Considering that the vast majority of retailers today cannot even determine the cost of click and collect in real-time, it is clear that there is work to be done.

Consequences of failure

After years of in-store under investment and a devaluation of the store experience, retailers are entering a new era of personalised customer service. To achieve this new vision will require a significant transformation and three essential pillars of information: complete visibility of customer orders, purchase history and preferences in one place; up-to-date product file, including shipping and location costs; and a single, real-time view of inventory, network-wide. With these three key components in place, retailers can begin to explore other opportunities for differentiation and improving the customer experience—from the adoption of single swipe transactions to express click and collect and a seamless returns process.

The good news is that this shift represents a massive opportunity for retailers willing to evolve as they can quickly outpace the competition. The combination of increased sales and decreased operational costs resulting from this new model enable retail organisations to devote capital in other areas and further their advantage. As those companies gain momentum and market share, it becomes continually harder for competitors to make up lost ground, underlining the importance of keeping pace from the start. In short, the time to take the channel out of omnichannel is now.

Raghav Sibal is the managing director of Manhattan Associates Australia and New Zealand.

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