Retailers Have Work to Do in Omnichannel, Report Finds
In nearly every retail boardroom, the message is the same: “omnichannel retail is the future, and we need to get ready.” And while many retailers have made significant improvements in their channel integration strategy, there's little consensus into the overall maturity of regional markets. To that end, OrderDynamics conducted a study of more than 1,000 retailers worldwide — from the U.S., Canada, U.K., Australia and the Nordics — which analyzed each retailer’s website to learn which capabilities are pervasive, which markets are adapting fastest, and the areas that present the most opportunity for growth.
Click and Collect is All Over the Map
One significant area for measuring omnichannel capabilities is click and collect, or, buy online, pick up in-store (BOPIS). Click and collect requires a comprehensive set of features that omnichannel needs: a blend of online and offline services, advanced inventory visibility, and a good means of processing returns from both in-store and online purchases. Essentially, it’s the peak of giving customers unlimited options for how and when to shop and how to take ownership of their purchased items.
Yet globally, only 37 percent of retailers offer click-and-collect services. In the U.S., this falls to just 29 percent. Even in the U.K., the global leader in this area, a full third of retailers don’t offer the service.
Also, the need for speed that's inherent in click and collect seems to be lost on some retailers. In fact, only 20 percent of global retailers promise that an order will ready for pickup within a four-hour window. Shockingly, more than one-third are content to claim BOPIS orders will be ready more than a full 24 hours later, and occasionally, even days later.
Without the ability to offer this flexible fulfillment service — and offer it fast — retailers face the reality of losing customers to competitors that provide this convenience with speed. Ultimately, they risk succumbing to the advancements of other omnichannel retailers, Amazon.com and e-commerce pure-plays that are making great strides in improving fast and free shipping.
Can’t You See? Inventory Visibility Matters
One important thing to note when it comes to offering omnichannel services is that inventory visibility is essential. Customers researching items online must be able to confidently walk into a store to buy any item they want. Similarly, retailers need to know whether they can offer click-and-collect services on items and provide accurate timelines for pickup. The more than 30 percent of retailers that fail to offer accurate, real-time inventory visibility for all parties are limiting the impact and functionality of most other parts of their business.
Returns Simplicity Matters, Too
The research also found that slightly over 40 percent of multichannel retailers don’t allow customers the chance to return online orders in stores. The frustration of returns, including the hassle of repackaging and shipping an item back, complicated returns policies, and a lack of flexibility on the retailer’s part are prime reasons why many consumers don't buy certain items online (e.g., apparel). In-store returns can be a true revenue generator based on the fact that they stimulate more online sales. Beyond that, they also bring customers into the store where the chance for an upsell or resale grows significantly.
Omnichannel Presents a Massive Opportunity
Omnichannel is a key goal for many retail organizations, and the global market is moving swiftly in that direction. Some markets are more mature than others, and some are catching up faster than others. If your organization wants to find new competitive differentiators to compete with other retailers, e-commerce pure-plays and, of course, Amazon, then it’s time to focus on delivering the services that meet the demands of the modern customer journey. In other words, it’s time to get your omnichannel strategy moving.
Nick McLean is CEO of OrderDynamics, an omnichannel order management system.
Related story: Total Retail's 2017 Top 100 Omnichannel Retailers