The omnichannel retail experience may be the future of the consumer marketplace, but many vendors are having trouble getting out of a legacy approach. Unlike more surface-level changes in selling strategies, establishing a viable omnichannel retail platform is more than simply developing a marketing campaign or tweaking technology. In order to keep up with and outdistance competitors by delivering a consistently meaningful customer experience, organizations need a comprehensive approach.
For virtually every company, it means delving into some unchartered territory. While a reactionary, overcautious style can ensure a business will be stuck in the back of a crowded field, a headlong plunge into an intricate system may leave an organization without a shred of a safety net. By addressing issues in supply chain management, crunching data and engaging consumers, an online seller can drive progress in omnichannel retailing.
Understanding the millennial shift
According to a recent survey by Merchant Warehouse and Retail Pro International, only 53 percent of millennials said that their favorite retailers have an omnichannel experience. The consumer group that will define the rapidly approaching next era of retail have loudly and clearly declared their preference for omnichannel selling, with both old-fashioned and newfangled methods of browsing, purchasing and returning business coalescing to form a demand for consistent, responsive and high-quality service at all times and in any environment.
The survey, which compiled responses from more than 1,000 millennial consumers and 100 retailers, found an intriguing blend of old and new shopping approaches. Among its findings:
- Retailer websites need to be informative and functional on every channel: 60 percent of millennials conduct pre-purchase research on retailers' sites.
- Vendors can add customers by cutting prices: Nearly 50 percent of respondents said they would only go to a retailer to cash in on a coupon if it offered at least 20 percent off the regular price.
- Cash still counts: 25 percent of respondents said that they vary their purchases between paper and plastic, while 68 percent stated they primarily used credit or debit cards.
- Product matters: More than 90 percent of respondents stated that there are certain products they would rather purchase in a store or online. Furniture (81 percent of respondents), footwear (76 percent of respondents), apparel (73 percent) and jewelry (62 percent) were among the top preferred in-store purchases, while about 84 percent would rather buy electronics online.
- Consumers are lone wolves: Almost 80 percent of respondents said that they did their 2013 holiday shopping alone.
The last point is certainly intriguing. While these consumers said that they often do their shopping alone, they are not usually going into it blind and by themselves. Online channels play an increasingly important role in the research and purchasing process, with online stores, product reviews and digitals ads inducing consumers to explore products before they buy. In some cases, the "go it alone" mentality likely arises because consumers have access to libraries of content that can describe what other people think about the object of their desire.
Developing omnichannel retail strategies
To establish more viable omnichannel retail strategies, it pays to think like the consumer. It is also important to enhance integration across company silos, ensuring that software development, marketing, operations and supply chain management personnel communicate to understand each other's challenges. It is critical to develop consistency for the digital and physical stores, for example. They have to "make sense" together, and work in tandem to enhance the customer experience. In some ways, it means that brick and mortar store has to digitize, while the digital store can emulate the most crucial parts of the physical shopping experience.
Power Retail contributor Stephen Duncan recently highlighted several ways that omnichannel retailers can increase their potential through convergence. Some retailers engage their always-on digital customers in their stores, offering digital charging stations, complimentary Wi-Fi and dedicated online shopping areas in the effort to provide all customer services at once. Other organizations are combining a mainstay of the convenient shopping experience - the drive-through window - with online buying, allowing customers to shop and order online and pick up their item at a dedicated drive-thru station.
Duncan also noted that supply chain integration will be key to continued development in the omnichannel retail sector. He noted that many companies do not have a centralized way to manage all inventory and point-of-sale systems. This lack of consolidation can leave organizations vulnerable to supply chain blind spots that either drain resources unnecessarily or provide a less than optimal customer experience.
"Ensuring there are channel consistencies and operational efficiencies in place will enable retailers to be more strategic in their planning and less reactive," Duncan wrote.
Catering to millennials means understanding the fact that few make much of a distinction between in-store and online shopping - they simply prefer to have all options available. In order to anticipate and satisfy these needs, vendors need to streamline their strategic planning and look for ways to centralize.
If you liked this article, see more related Lightwell blogs:
- IBM study: Consumers willing to give personal data in exchange for value, experience
- Omnichannel retail and supply chain management lessons from the Sochi Olympics
- Why IT needs to be part of your omnichannel retail strategy
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