Overcoming omnichannel commerce challenges for mid-sized retailers


describe the imageOmni-channel commerce puts small and medium-sized businesses at a critical juncture. The rise of Internet-based retail greatly benefited smaller retailers, as a lack of physical storefronts and advertising dollars no longer represented a higher barrier to successful entry in their target market. With well-placed marketing efforts and innovative product strategies, a mid-sized retailer could achieve the seller profile of a much larger company.


However, the rise of omni-channel commerce threatens to reintroduce hierarchies into a playing field that had become more level in recent years. Instead of being able to focus solely on building an appealing Web presence and selling their product, companies have to pay more attention to their overall customer engagement and infrastructure management operations. 

Without the back-end resource support of a large enterprise, a mid-sized retailer risks falling behind. It's not hopeless, by any means. But there are some challenges that have a greater potential impact on mid-sized retailers than they do on their bigger business brethren. Let's take a look at some of the challenges affecting omni-channel commerce optimization in medium-sized retailers - and what organizations can do to solve them.

  1. Shipping and delivery: Consumer expectations for product delivery are much advanced today than they were even four or five years ago. Larger Internet retailers have been able to introduce service that promise rapid product arrivals for a relatively low flat rate. Other companies offer free shipping and returns, making customers balk at extra costs for two-day or even overnight shipping at checkout. Because larger companies have more developed distribution and warehouse management systems, they're able to offer these services and eat the shipping costs.

    In doing so, they disrupt the formerly level playing field. Instead of being treated as simply the cost of making an Internet purchase, shipping prices have to be factored into selling decisions, according to BusinessNewsDaily. Many small online retailers end up charging flat shipping rates that are competitive with those offered by larger vendors. When shipping costs exceed the flat rate, they lose money. However, without definitive shipping costs and delivery times, online retailers may lose customers, shipping management expert Brad Stronger said.

    "People will buy based on shipping, not on product price, and that's really telling about how consumers are thinking," said Stronger. "They'll look at a small retailer's site [with a lower price], but don't get an accurate shipping estimate. If they buy through Amazon [Prime], they know they'll get it in two days."

    Order tracking systems, widely used by many large retailers, are a great way to increase transparency with customers, according to the source. Notifications via email and text messages can help a company communicate with buyers and build loyalty. This approach likely involves higher upfront costs, but can provide enormous benefits in the long run.

    Key to establishing a useful tracking system, as well as optimizing shipping and delivery efforts, should include an investment in supply chain management and order management software. By centralizing supply chains and using data to make more decisions, SMBs can make smarter choices about distribution, supplier relationships and other logistical concerns.
  2. Integrated channels: Mobility is another phenomenon impacting SMB omni-channel commerce efforts. Instead of concentrating resources in one area of the physical or digital marketplace, retailers are called upon to provide the same customer experience on every potential channel. A slow loading site, lack of product availability and mediocre customer service practices can all waylay a potential buyer from making a purchase. 

    Meaningful omni-channel commerce integration isn't simply a matter of developing a mobile version of the current website. Customers use each channel for a different purpose. One example more retailers are dealing with is the increasing tendency for customers to look up information on their smartphones while standing in a store - often to see if they can find a better deal online with a competitor. According to Econsultancy, 63 percent of consumers use mobile devices while shopping to compare prices with a different retailer.

    Using geolocation data to figure out where its customers are and what device they are using while looking at specific products can help a company build its online store and customer engagement tactics to make the user more likely to choose its product. Building  an omni-channel commerce environment that reflects the way consumers use an online store can help it provide the right solution at the right time, according to Ventureburn contributor Anthony Nicalo.

    "Integrate all your channels so the shopping experience is seamless for customers at every touchpoint," Nicalo wrote. "For instance, Sephora knows that most people still buy makeup in-store, so the company has molded its ecommerce strategy to enhance that experience."

    Centralized supply chain management and customer-facing e-commerce portals can work in tandem to build a competitive edge for smaller retailers. For example, a person in a store is likely looking for a product fairly quickly. Being able to inform customers of a product's availability and the speed at which it can be delivered can help persuade them to buy. Backing up that promise with an integrated, data-based back-end system builds customer loyalty and increases an SMB's profit potential.
Learn more essentials of omni-channel: