What’s the « buzz » around omnichannel?
By Matthew Newman, Senior Account Manager, North America
Every industry has buzzwords. While some buzzwords are industry-specific, there are some words and phrases any person working in a twenty-first century corporate environment will recognize:
“Let’s circle back on this.”
“We should take this offline.”
“This is great for visibility.”
However, there is one buzzword that everyone in retail has heard at least one time or another; one that has been said at every board meeting, VC funding round, and company retreat since the rise of ecommerce:
“Omnichannel.”
Omnichannel strategy, by definition, is the strategy related to integrating the shopper experience so it’s optimized between all touch points (website, app, store, etc.). This could be something as simple as an in-store loyalty program that can be accessed from a cellphone, or as complex as a phone application giving a shopper custom advice as they wander through a brick-and-mortar location.
One significant way omnichannel has become more present in retail is through the integration of the online shopping experience and the brick-and-mortar one. But why should they be integrated? As ecommerce becomes more important to everyday shopping behavior (something the COVID-19 pandemic solidified), the question comes naturally: is brick and mortar still relevant?
No one can predict the future, but the numbers indicate that while the rise of ecommerce may negatively impact some brick-and-mortar retailers, it will not stop the act of shopping in real life. Walmart still remains at the top of the Fortune Global 500, as does Amazon. And while Amazon is primarily an ecommerce player, both organizations are continuing to further their ventures into the omnichannel space.
Amazon is continuing its rollout of Amazon Go and Amazon Fresh locations, allowing for a contactless walk-in walk-out experience, in both large and small formats. Walmart has put almost $1.2 billion into its ecommerce program and continues to utilize its vast store and supply chain network to make the connection between stores and online seamless. Ventures such as Online Grocery Pickup (OGP), Pickup Today, and geo-fencing (a technology that notifies the store when a specific customer is in the parking lot) show the strides Walmart is making in its competition with Amazon. Both retail giants are showing a solid commitment to pushing the omnichannel boundary. But while these technological advancements provide huge benefits to the customer, can they also provide benefits to the retailers themselves?
Yes: through data. Amazon, Walmart, and every other major retail player are constantly collecting customer data. In doing so, they are solidifying their ability to map out the experience customers have online and in-store. Ecommerce retailers already have an almost exact view of how their customers are shopping, from start to finish. I’ve seen it firsthand: I started my retail career as a buyer in Walmart’s ecommerce division and was constantly floored by the sheer amount of information I had access to. There is an endless breadth of data available to ecommerce merchants: exactly how long customers spend on the product display pages of top sellers; how long customers spend on a page before they exit; what products are getting viewed but are not converting. It’s an almost limitless analytical experience, and one that is very difficult to replicate in a brick-and-mortar environment.
Or is it?
While major players in the space are focused on making sure the distinction between online and stores becomes a blurred line, there are other players who continue to focus on data-driven solutions. Though it won’t help in the traditional “omnichannel mission,” as it were, it will help put the two platforms on even footing. Brick and mortar retailers need to begin thinking more deeply about the technology available to them, and stop believing that generic industry reports will help them make the right decisions. Companies like Focal Systems seek to eliminate the lack of real-time insight into out of stocks; companies like Amoobi seek to eliminate the uncertainty around what customers are actually doing on the store floor. The resources are there; companies just need to seek them. The omnichannel solution is easier to implement when you have a clear understanding of behavior on all sides of the equation, and that knowledge exists for the taking.
The buzzword “omnichannel” is here to stay, with every competitive retailer adopting some strategy related to it; however, a solid omnichannel strategy does not guarantee structured decision making. Until retailers approach their shopper behavior from a specific, analytical point of view, the information they base their decisions on will always be limited. The world is changing fast, and every retailer needs to ensure they are equipped with the correct tools to change right along with it.