Destination Omnichannel: How Retail Stores Can Get There
One of the most common myths surrounding the modern retail environment is this: omnichannel=online shopping. And vice versa. There are some good reasons for this misconception. During the past two decades, most online retailers were quick to embrace emerging technologies to get to know their customers more intimately — often in ways their brick-and-mortar counterparts couldn't consistently match. These investments have enabled the delivery of more personalized customer service, made transactions smoother and more efficient, and increased customer loyalty, all leading to repeat business for the retailer, further contributing to the continual surge in online sales.
Yet despite the e-commerce explosion, the physical store remains the center of the consumer shopping experience. Industry observers believe it will be the most profitable retail channel for the foreseeable future. While profits certainly top the priority list of every retailer, improving the customer experience remains a close second. (And the two objectives are rarely mutually exclusive.)
Years ago, retail transactions took place only during stores’ open hours. Finding the best price meant consumers physically traveled from store to store, or called multiple stores when looking for an item. Most retailers could still be successful as long as their prices were competitive, their inventory was well managed and their store associates were knowledgeable and friendly.
Today, the power has dramatically shifted to the consumer, who has greater and faster information access than ever before. E-commerce, once web- and desktop-centric, has morphed into mobile commerce thanks to the proliferation of smartphones and tablets owned by millions of consumers worldwide. With information essentially everywhere online, consumers have greater knowledge and exponentially more choices when shopping — both online and in-store. Therefore, retailers must compete not just on price and great customer service, but on the best overall experience across both channels, particularly in-store.
Armed with information and choice, consumers want to know, “Does this store really know what I need? Does this retailer want to make my shopping experience as enjoyable as possible? Is it possible to get consistent service when I frequent different locations of the same retailer?”
Why Consumers Say Online Shopping is More Convenient
A recent North American survey commissioned by CitiXsys, provider of the iVend Retail omnichannel suite, revealed that most consumers find e-commerce significantly more convenient than shopping in physical stores. In fact, 71 percent of consumers said they “agree” or “strongly agree” with the statement that they find shopping online more convenient than in a store. Nearly a quarter (24 percent) said that after shopping online, the store feels like a “letdown.”
When shopping online, consumers have become accustomed to receiving numerous perks — e.g., personalized recommendations, exclusive promotional offers, flexible shipping and delivery options — and meaningful, easy-to-use loyalty programs rewarding them when they shop more frequently with their favorite brands.
The survey asked consumers, “What would improve your in-store experience?” and respondents’ top choices included having personalized loyalty offers sent to them when they enter the store. Forty-two percent said they wanted these offers sent to their phone (so that they can access through a digital wallet like Apple Wallet or Google Wallet), while 29 percent wanted them delivered via email.
These expectations and this type of feedback begs the question: Why should the store be any different? The answer is simple: it shouldn’t, and in a growing number of instances, it isn’t.
Physical Stores Respond
Thanks to investments such as mobile point of sale (POS), digital passes, coupons, and more robust loyalty and rewards programs — as well as the ability to send targeted text- and email-based offers — brick-and-mortar stores are taking steps to make in-store shopping more like the online experience. When these tools and technologies are smartly deployed, they can have a significant impact by meeting or beating customers’ expectations.
Retailers that understand the mobile opportunity should strive to deliver a shopping experience in-store that’s more like what shoppers are used to online. By equipping store associates with mobile POS devices, retailers can process sales on the floor and customers can avoid checkout lines. It also allows the associate to look up a customer’s purchase history, make customized recommendations based on that customer’s profile and check product inventory. Mobile POS also frees up valuable real estate in a store that would otherwise be used for registers. If the customer is also using digital passes, they can easily collect and redeem loyalty points in the same transaction, just like they can with a traditional POS system.
5 Steps to Omnichannel Success
As our survey indicates, there's clearly room for improvement to close the “omnichannel gap.” Here are five steps retailers can take to help reach this goal:
1. Simplify ordering and pickup. The ability to get an item to a customer at their preferred delivery point has become a secret weapon for many stores. Brick-and-mortar retailers must keep in mind the hassle-free ordering and seamless delivery experience that shoppers have become accustomed to with Amazon.com and other e-commerce sites, and consider how they can replicate this experience within their stores.
2. Be ready for the informed shopper. The CitiXsys survey found that 45 percent of women research a product at least once, and 42 percent multiple times before going into a store. For men, it was 56 percent once, and 46 percent multiple times. No matter what age group or gender a retailer or brand targets — or for that matter, what products it offers, whether it's women’s apparel or tools — it must ensure its physical store is integrated with its digital presence. Retailers must be ready to cater to the needs of this informed shopper by better managing inventory to make sure they have the right product in the right size or color to ensure a purchase.
3. Evolve loyalty programs. Loyalty programs have also been reshaped by online shopping experiences. Most retailers recognize that excellent customer service is the best way to build customer allegiance, but loyalty programs play an important role in customer satisfaction. Today, programs that recognize a customer’s purchases must be part of a truly connected experience. Retailers must understand the value of each customer in all channels. They also need to ensure customers are benefiting in the most convenient manner to them. Not surprisingly, our survey revealed a strong preference for digitized coupons, gift cards and loyalty cards. Retailers that don’t digitize these items are missing a huge opportunity.
4. Personalize the in-store experience. Many consumers are willing to allow retailers to track their purchasing habits and use that information to send them targeted offers. Two-thirds of the CitiXsys survey respondents said it was either “very important” or “somewhat important” that retailers have one view of them as a customer, both from online and in-store shopping history. To truly optimize for omnichannel, retailers need visibility of every customer across their business and the ability to make product recommendations based on previous transactions. This will enable better cross-selling and/or upselling in a relevant and timely manner, and help ensure product availability as well as ordering and delivery at the customer’s preferred delivery or collection point.
5. Embrace mobile. Using a smartphone to check out a competitor’s price and availability of an item is another hallmark of this educated consumer. More than a third (34 percent) of survey respondents like to use a smartphone to research more product information while in-store.
Tim Barton is the director of product marketing at CitiXsys, a retail management solutions provider.