Organizing for Omnichannel: Future-Proof Your Business
Over the years, we’ve seen technology advances change how consumers make purchasing decisions, creating the need for retailers and branded manufacturers to implement omnichannel strategies. Omnichannel retail creates a seamless consumer shopping experience through all available digital and in-store shopping touchpoints. While we saw significant advances in 2016, this year will bring a different set of omnichannel priorities. Here are my predictions:
Consumer Experience Above All Else
Consumers have more choices today than ever before, and the experience they have with a retailer will significantly influence his or her purchasing decisions. This isn’t just about online or in-store purchases; it extends into areas like returns, additional product upsell or cross-sell recommendations, and even loyalty programs. Customer service (pre-, during and post-sale) is an area that still has room for disruption.
For example, in a recent mystery shopping study of 30 top retailers, we found that 90 percent of store associates had access to store and networkwide inventory. However, when a consumer requested an item in a different color or size that wasn’t in stock at the store, only 7 percent of sales associates attempted to save the sale. This is a missed opportunity. Omnichannel solutions can close these gaps by enabling retailers to deploy endless aisle solutions and save-the-sale strategies.
Personalization Becomes Individualized
Personalization for most retailers is still synonymous with recommendations — i.e., taking course segments and making product recommendations based on historical data. In 2017, personalization will transform into individualization, where promotional offers, email marketing, recommendations and in-store engagement will truly become one-to-one. True individualization will not rely solely on historical data, but will couple it with algorithms, real-time interaction response and multidata sources to create functionality and content that’s personalized to the individual. As retailers look to improve the consumer experience, taking advantage of next-generation personalization technology will be imperative.
E-Commerce to the Cloud
Many industries have already taken advantage of what the cloud can offer — faster upgrades, scalability, and lower total cost of ownership and platform extensibility. This year, look for retailers to adopt cloud solutions for their omnichannel strategies. This will include order management, personalization software, e-commerce websites, mobile point-of-sale solutions and more. Previous generation technologies didn’t allow for retailers to drive their own customizations or unique experiences without on-premise software. In 2017, the majority of retailers will adopt an omnichannel cloud solution as part of their commerce stack.
B-to-B Stakes Increase
The stakes with B-to-B commerce are higher than they’ve ever been. Order values are higher, more distribution channels are available and older generation buying behaviors have changed. While we think of B-to-B buyers being different, the reality is that the person placing the order is still a consumer at the end of the day. The expectations of B-to-B buyers are similar to their B-to-C counterparts — they crave seamless experiences, personalized content and speed of transactions. In 2017, retailers or branded manufacturers that want to serve B-to-B customers will implement similar omnichannel strategies as their B-to-C business.
Consumers Demand Fulfillment Flexibility
Amazon.com announced last year that Prime members outnumbered non-Prime members on the platform. The most important benefit of the Prime program? Free two-day shipping. Consumers simply don’t want to pay shipping fees for their purchases anymore. At the same time, both FedEx and UPS are raising their 2017 rates by 3.9 percent and 4.9 percent, respectively. The rise in shipping costs stemming from offering free shipping and increased fees will be passed onto consumers by retailers. This will drive retailers to implement more omnichannel fulfillment options (e.g., ship to store, pickup from store, ship from store). Look for retailers placing an emphasis on these types of fulfillment to cater towards the cost-conscience consumer in 2017.
Consumer Confidence Affects Spending
Consumer confidence has increased post-election. According to The Consumer Board, consumers are more confident about the future than they were in October, and general optimism has elevated back to pre-recession levels. This is expected to drive an increase in consumer spending. In 2017, retailers that invested in omnichannel strategies last year will be in the best positon to take advantage of the uptick of consumer confidence in this year’s first and second quarters.