How to Compete in the Age of Free and Fast Shipping
Car service? Check. Dinner? Check. Beer and wine? Check. In today’s on-demand economy, consumers can order virtually anything with the simple touch of a finger and have it at their doorstep in a matter of hours, if not sooner. Not only do consumers want this, they expect it. And they don’t want to pay exorbitant, if any, fees for that instant gratification.
This has resulted in a number of retail giants battling it out for the fastest, most aggressive and usually cheapest (i.e., free) shipping policies. Recently, eBay went as far as to announce a new shipping guarantee: three days or less or the customer can return the purchase for free, receive a refund for shipping or, if shipping is free already, get a $5 coupon towards their next purchase.
So how do traditional retailers compete with the online behemoths in the age of free and fast shipping demands? Stores. eBay has exactly zero stores and, as of this writing, the only stores Amazon.com has opened are a handful of bookstores in a few select cities. Traditional brick-and-mortar retailers already have the real estate, and most already have some sort of e-commerce presence. All they need to do is close the gaps in their omnichannel capabilities to compete against free and fast shipping.
Is the Business Really Omnichannel?
Many retailers think that if they have stores and a website, that means they're omnichannel. They would be wrong. In order to compete with powerful e-commerce sellers like Amazon and eBay, which can guarantee fast and/or free shipping, brick-and-mortar retailers need to go a step further and have key omnichannel capabilities in place, including:
- Store-level inventory visibility: Both shoppers and associates, across the business, need complete visibility into the retailer’s inventory. They need to be able to see if an item is available online, at the closest store, across town or in the nearest distribution center (DC). Knowing exactly where inventory is available helps retailers and shoppers determine the fastest, least expensive way to get their product.
- Fulfillment options: Retailers need to offer shoppers all available methods of fulfillment. Need it today? Buy online and pick up in-store. Need it tomorrow? Ship from the closest store or DC. Need it the cheapest way possible but not by a specific date? That’s covered too.
- Customer service: Even with the presence of innovative technology, shoppers still expect great customer service. Retailers need the people and technology in place to provide consumers with the best possible service and experience across all channels. That means every single customer service agent, store associate and chatbot needs complete visibility into not only the retailer’s inventory, but the customer’s shopping history and preferences.
As technology evolves, the meaning of omnichannel will continue to change. Retailers will need to be able to quickly innovate to keep up with the changing definition of omnichannel. Having the right systems in place from the start will make adapting fluid and cost effective.
What’s the Strategy?
Although today’s retailers need a true omnichannel presence to compete against fast and free shipping, they also need to offer alternatives within the bounds of their brand and its image. If retailers lose sight of who they are in their push to become true omnichannel players, they risk losing loyal customers and thus sales. Throughout the process of expanding their omnichannel capabilities, retailers must consistently ensure that new channels and the overall customer experience reinforces their brand identity.
Nick McLean is the CEO at OrderDynamics, an omnichannel order management system.