Tapping into the $100 billion holiday retail market with omnichannel commerce

     

iStock_000020830928_LargeThe holidays, as everyone knows, are the retail industry's version of the World Series. At no other time in the year are companies more competitive and consumers more invested than during those crucial few weeks between Thanksgiving and Christmas. It's where money and reputations are made (or lost), a time when an organization gets to see firsthand if its most impressive initiatives are able to stand up to the increased traffic and attention. 

Omni-channel commerce has disrupted the retail paradigm considerably. We've seen, in the last few years, that many customers are moving primarily or completely to online purchasing, while the ones who prefer the brick-and-mortar experience are often supplementing their in-store shopping with research, price comparisons and online-exclusive deals. Meanwhile, many retail organizations have realized the importance of a consolidated experience on the back end, and the need to innovate within order management, transportation, inventory and customer service practices to get customers the goods they want, faster. It's a whole new world. 

It's also a lucrative world. According to a recent report, Business Insider Intelligence predicted that online retail sales will top $100 billion this year. That number is large, although how much it can beat last year's e-commerce revenues - $95.7 billion, as reported by Internet Retailer - still remains to be seen. The relatively modest growth may be due to the fact that many of the people who plan to buy online also did so last year, so there will be fewer total newcomers. However, that also means that most of the people utilizing e-commerce for their holiday shopping have experience with it, and thus, expectations. More consumers who are veteran e-commerce and omni-channel commerce shoppers means higher expectations for the companies doing the selling and delivering.

Trends in holiday shopping
Mobile shopping, as well as a focus on the omni-channel, will continue to top the list of priorities for this holiday shopping season. BI Intelligence reported that items purchased through a smartphone or tablet experienced a year-over-year rise of 48 percent from the second quarter of 2013 to Q2 2014, with revenues amounting to around $8 billion. It also represents a rate three times faster than that of desktop-based online shopping. The ascent of mobile devices also opens up opportunities for traditional brick-and-mortar retailers, many of which have struggled to transition to a digital, omni-channel platform as vibrant and responsive as those of their Web-centric brethren. For e-commerce retailers, it means that the arena will be even more crowded. It also means enterprises that have established a viable back-end supply chain infrastructure may be able to get another leg up by leveraging it effectively in the omni-channel space.

Convenience is certainly a hallmark of the holiday shopping season. Not only mobile shopping growth represents this - the rise of more aggressive shipping and delivery strategies also indicates that omni-channel convenience will, many retailers hope, be a source of competitive differentiation. Things like next- and even same-day delivery, and rapid turnaround for in-store pickup are ways that a retailer can set itself apart. That is, of course, provided that these strategies end up working. There were reports last year, especially as the season got down to the wire, of rapid delivery promises made that ultimately couldn't be kept. Worse than not offering the most competitive delivery and shipping policies is promising something that cannot be fulfilled. This puts the onus on order management, transportation and delivery teams to make sure that the flow of products is driven by data and tracked comprehensively. It also puts pressure on the website and the back end to operate in sync.

The omni-channel commerce market is going to continue growing, and the time is now for companies to ensure they have the proper groundwork to capitalize on it.

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