Sept 06, 2019

Chapter 6: Succeed in Magento omnichannel retail: Lessons from 3 true examples

There is no one-way to achieve omnichannel in practice. In this chapter, we break down 3 real success cases to see how these Magento retailers nail their omnichannel strategy. You can also find some best practices in one success story of Magestore’s client to apply to your own. On the way to omnichannel, this retailer has set goals and encountered challenges that are typically found in growing businesses. But what he gets is a real evidence that omnichannel can be achievable for medium-sized retailers. Keep reading to find out!

5 min.

What does omnichannel actually look like in practice?

Here’s the sad truth: There is no one-size-fits-all when it comes to omnichannel success. Magento retailers are nailing omnichannel in several ways. Omnichannel isn’t about how big a system is but how well-connected its components are.

In this Magento Omnichannel Retail guide, we introduce 3 success stories to inspire your omnichannel journey. You’ll also get these practical lessons to apply to your own strategy:

  • Two retailers are large-sized brands using Magento Commerce to offer omnichannel experience. We’ll see the big picture of omnichannel retail on Magento. Their focus can be a good hint for you to save time and cost on your own omnichannel transformation journey.

  • The last case is Magestore’s real customer, who has been working with Magestore from the start of his omnichannel journey. Using Magento 2.3 Open Source, the merchant chooses Magestore POS solution to match the unique needs of 9 outlets in Canada with 8,000 SKUs. You may find his goals and challenges similar to yours. He’s a real proof that omnichannel is possible for medium-sized retailers on Magento.

Magento retailer Tous uses omnichannel growth strategy to boost sales

Tous - A fashion retailer with global growth

Founded in 1920, Tous is the famous luxury lifestyle brand worldwide for selling high-quality jewelry, handbags, and accessories. With 535 physical stores and 8 online sites worldwide, Tous enjoyed revenues of $432 million in 2016.

Today, they have established as a global brand with 700 stores in 53 countries and online shops in 14 markets. Although having achieved significant success in the market, Tous did not rest on their laurels. They kept planning the new way to satisfy more potential customers and scale their business.

Tous - A fashion retailer with global growth Tous - A fashion retailer with global growth

Join the omnichannel revolution to accelerate sales

They wanted to create a seamless online and offline customer experience to increase conversion rate, the volume of visits and decrease bounce rate. The problem, however, was that their online sites and physical stores were not linked to each other. They offered over 6,500 SKUs but were struggling with product availability.

So to deliver a truly omnichannel experience to customers, they really wanted to connect all of their web stores with one central order and inventory system. In other words, they needed a multi-source order management solution to manage inventory across multiple channels and brands, in real-time.

Build omnichannel retail with the scalable platform - Magento

Tous has started their eCommerce journey on Magento Open Source in 2015. But they realized that their business has outgrown the old eCommerce platform. So they decided to upgrade to Magento Commerce 2.3 to tackle the challenges of performance and stability. Also, they added Magento Order Management (MOM) to handle order management and omnichannel scenarios.

By using Magento 2.3, they took advantage of Multi-source Inventory (MSI) capabilities. MSI helped them improve operational efficiency by:

  • managing inventory across multiple physical locations, all within Magento backend;
  • handling stock creation and aggregation;
  • notifying low stock to reduce out-of-stock situations;
  • offering more products for sales online, whether the actual items are in a warehouse, or in a store.

In addition, Magento 2.3 and MSI also solved all their problems with stock. As soon as Tous was able to show more stocks to online customers, sales naturally increased.

Besides MSI, Magento Order Management revolutionized their order fulfillment processing. MOM acted as one central order and inventory system to manage inventory and fulfill orders efficiently. This proved to be a cost-effective decision.

Impressive results from day one

Black Friday was the platform’s first true challenge.

Black Friday sales increased to 29.74% higher than the previous year’s Black Friday. The conversion rate rose to 13.6% compared with 2017. Transactions grew by 20.15%, and Average Order Value (AOV) increased by 7.98%.

Source: magento.com

The amazing results are thanks to these following reasons:

  • By upgrading to Magento 2.3, the site performed really well. Before Black Friday sales began, nearly 20,000 shoppers filling their shopping carts to checkout.
  • With MOM and MSI, the Click-and-Collect service has been used in almost 14% of its online transactions, and 40% of customers interacting with the brand enjoy an omnichannel retail experience. This proved that omnichannel is the key to growth of the business.
Impressive results from day one Impressive results from day one

Key takeaways from Tous omnichannel story

#1: Drive growth with a good omnichannel strategy

From Tous’s success story, increase conversion rate through omnichannel can be considered a lesson that is worth learning for other retailers.

Because satisfying customer demands from A-Z not only helps your business boost sales, but it also builds loyalty to customers.

#2: Focus on improving your inventory

Selling multiple channels and brands offered the business great opportunities. But they struggled with a new problem: that is product availability. Multi-source Inventory helped them solve all the brand’s problem with stock. As soon as Tous was able to show more stock to online customers, sales naturally increased.

Eyewear Devlyn maps a route to omnichannel for their multi-store retail on Magento

Devlyn - A multinational chain of opticians with growth ambitions

Began in 1936, Devlyn is a family-run, eyewear retailer in Mexico. Today, Devlyn becomes one of the largest optical retail chains in Latin America with over 1,200 physical stores. They operate through four distinct retail brands and have nearly 5,000 employees.

Devlyn Optical sells mainly in Mexico but also has stores in the U.S., Guatemala and El Salvador. With strategic vision, Devlyn realized that no retailer in their market was offering an eCommerce solution for eyeglasses. So there was an opportunity to expand their leadership position in the market.

Devlyn - A multinational chain of opticians with growth ambitions Devlyn - A multinational chain of opticians with growth ambitions

Become omnichannel retail to turn “out-of-stock” situations into sales

Devlyn decided to sell glasses online beyond their physical stores. They have 70,000 different frames and about 130,000 SKUs in different colors, contact lenses, and sunglass frames. Devlyn, however, has to deal with large but shadow inventory. “Our stores offered on average 580 SKUs with one or two pieces of inventory per SKU. Yet in our network we have 25,000 SKUs with available inventory that we were not offering our customers,” said Andrew Devlyn, Director of Innovation at Devlyn Group.

Devlyn knew they needed to make their stores more productive in generating sales. They wanted to ensure that there is no sales lost even when products are running out-of-stock. So they wanted the shopper to able to browse their deep product catalog.

To do this, Devlyn had to do two things: Unify their inventory, route any order to the best location, and turn their physical stores into mini-distribution centers.

Devlyn gets a lock on their omnichannel retail with Magento

Devlyn has begun their ambitious growth strategy by launching their first online store on Magento Open Source (previously Magento Community) in 2013. But to meet the immense demands of online customers, they upgraded to Magento Commerce (previously Magento Enterprise) in 2015. This enterprise-level Magento platform helps them offer more product SKUs online, extend their large customer loyalty program online, and easily manage multiple customer groups.

Also, over the following years, Devlyn decided to upgrade to Magento Commerce 2 to take their eCommerce to the high level of omnichannel engagement. With the long-term vision of delivering a true “endless aisle” experience to customers, Devlyn deployed Magento Order Management module (MOM) into their Magento Commerce. By giving everyone inventory visibility and revolutionizing order processing, MOM could make a huge difference in Devlyn’s business operation. They:

  • created a virtual pool of inventory that could be sold by any channel – either online or by staff in-store;
  • could fulfill sales by various methods including Ship-from-Store, Ship-to-Store, and Click and Collect;
  • could route orders to the closest store;
  • minimized delivery costs like split shipments;
  • made it easy for the staff to pick, pack and ship frames to the lab for processing;
  • integrated the fulfillment processing with their existing point of sale, instead of deploying another tool.

Skyrocketing results after just 6 months

It took about six months for Devlyn to unify their inventory and enable online ordering through stores. By adopting Magento Commerce and Magento Order Management system, they had amazing results. Omnichannel sales grew from “almost nothing” to about 3-4% of revenue in 2017, and the retailer expects this to double to about 6-7% of sales by the end of 2018.

The online conversions increased by 163% and mobile conversions by 271%.

Source: magento.com

  • The upgrade to Magento Commerce has dramatically improved customers’ checkout experience. “The updated checkout flow was a lot easier, so we saw an uptick in conversions on mobile and desktop,” said Devlyn.
  • The move to Magento Order Management has helped Devlyn expose their in-store inventory to online customers. It gave them the ability to generate a sale even when the product was out-of-stock.

Also in store, Devlyn experienced an incredible 200% increase in “save the sale” orders thanks to the enhanced inventory visibility. Their staff had full access to inventory in the warehouse as well as other stores. So they could now locate the suitable frames to another store if they didn’t have it in stock themselves.

Andrew Devlyn identifies one further, less tangible benefit of an order management system: “Omnichannel makes customers loyal,” he says.

Key takeaways from Devlyn’s omnichannel story

#1: “Omnichannel makes customers loyal”

Devlyn recognized that they completely could sell glasses through multiple channels. They offer eCommerce solution for eyeglasses and change from single-channel to omnichannel retail

Besides improving the customer experience at checkout, they provided customers with flexible fulfillment options to meet their immense demands - Ship-from-Store, Ship-to-Store, Click-and-Collect

#2: Transparent inventory to turn out-of-stock situations into sales

To make their stores operate more efficiently, they needed to solve two problems: stock availability and shadow inventory. Magento Order Management has helped them expose all their store inventory to their online channel, provide customers with better fulfillment experience and significantly increase their conversion rates.

By this, Devlyn has become a successful Magento omnichannel retail.

A fast-growing Magento retailer embracing a unique omnichannel approach for his multi-store

A multi-store Magento retailer on his fast growth

Greg Penno has been running his pet supply business, Mr. Pet's, for 23 years. Mr. Pet's has 9 locations in Canada with 8.000 product SKUs, but expanding to 25.000 SKUs over the next 12 months.

Mr. Pet’s outlet in Canada Mr. Pet’s outlet in Canada

Mr. Pet's is on the way to becoming British Columbia’s and Alberta’s leading pet retailer. Greg aims to offer his customers a wider selection of pet products than ever before with superior customer service. But he has a big efficiency puzzle to solve, managing an eCommerce website, 21 cash registers with 1.200 - 1.800 orders per day.

An omnichannel goal for better inventory visibility and customer experience across sales channels

Managing 9 physical stores is quite challenging in some aspects:

  • Greg needs separate sales strategies for each store.
  • Different store locations offer different products to match local demands.
  • Different customer segmentations also need personalized promotions to keep them coming back.

Greg is using Magento 2.3 Open Source to build his eCommerce channel. The Magento website shares the same database with 9 outlets. Customers, whether buying online or at outlets, can find full information they need on the website. Inventory and promotion data needs to be organized well for customers to understand what Mr. Pet’s has and where.

To leverage customer experience, Greg also wants to optimize order fulfillment. In case a product runs out-of-stock, instead of turning down the customer and losing the sale, the cashier can still create the order and fulfill it later when the products are back in stock or by drop-shipping. This accounts for around 5% of his monthly sales orders.

Greg and his developer team were looking for an omnichannel Magento Point-of-sale (POS) system to maximize efficiency and provide their customers with the best experience. With his fast growth speed, the solution needs to be scalable and flexible to adapt to his new requirements.

Turns out, obtaining a scalable and customizable Magento POS system isn’t easy. Greg’s experience with some other POS systems didn’t go well, even with a popular one like Microsoft Dynamic. Mr. Pet’s encounters such unsolved issues as the following:

  • delay in syncing data between Magento system and POS;
  • incorrect product information leading to the lack of inventory visibility;
  • unable to customize the solution and meet the business's special needs.

Shaping the desired omnichannel retail on Magento

Greg & his developer fellows didn't give up on their research. Finally, Greg has found his ultimate solution for Mr. Pet’s.

The choice of Magento 2.3 Open Source gives Mr. Pet’s a lot of privileges:

  • Manage inventory better compared to Magento 2.2 and other previous versions;
  • Open Source version is suitable for medium-sized retailers who have in-house developers to optimize their operational costs and meet their specific needs with customizations;
  • Own their data and system without totally depending on Cloud storage.

In addition, Greg has been using BoGo Promotion extension by MexBs to diversify promotion campaigns for different customer segmentations. Greg has integrated their POS with BoGo Promotion to create a seamless online and offline experience. As a businessman who loves to explore new technologies, Greg utilizes the assistance of Magento Business Intelligence (BI) in decision making.

For the seamless omnichannel experience from online to offline, Magestore POS Solution fits right in with Mr. Pet’s requirements:

  • Offering omnichannel experience by real-time sync in Magento admin, website & POS in-store;
  • Selling and fulfilling for multiple locations;
  • Running different types of loyalty programs to engage customers;
  • Customizing features to match current and future business needs;
  • Working with a professional solution and team for long-term development.
Mr. Pet's store Mr. Pet’s outlet in Canada

Magento omnichannel done right in crucial business operations

Building a system towards the omnichannel approach isn’t easy.

An Account Manager from Magestore has been working with Mr. Pet’s from the start to deeply understand their goals and needs. We want to ensure a working solution that actually meets Greg’s expectations. Running several cash registers at once, Greg was once worried about Magestore POS speed, but everything has been sorted out.

Magestore also commits to weekly deliveries in a transparent roadmap. Greg and his team can receive his results to test every week and adjust the requirements or milestones in case of any changes.

Along the way, Magestore has also improved the working process for the best outcomes. Instead of forming a solution that resolves the current issues, our business analysis looks into the long term to cover potential changes in the future. Greg and his team can see suggestions in solution mockups and make the final decision before we proceed with customizations. The solution and all other working documents become Mr. Pet’s property forever, no matter what.

Through the open sharing between Mr. Pet’s and Magestore, we have worked out a solution that best fits the business. Here are some highlights in 5 key areas:

Sales activities

Magento 2.3 has been a game-changing update to Mr. Pet’s eCommerce side. It’s time for the physical store chain to go in line and boost the overall business growth.

Greg has Magestore POS set up across his 21 cash registers. Magestore POS uses innovative Progressive WebApp (PWA) technology to enhance in-store checkout as well as integrate customer experience from online to offline. “I love that our POS just streams from our online server and in minutes we can have a working cash register.” - said Greg Penno - Mr. Pet’s store owner.

  • Offer fast checkout in-store: PWA technology has been a hot topic among Magento developers for its powerful performance. Magestore PWA POS is confident to get rid of the long checkout line at any store using a barcode scanner. Adding products to shopping cart only takes seconds;
  • Allow back orders: Never run out-of-stock again. This is a great feature once you have a real-time data flow throughout your system. In any case, when there’s a stockout in a store, instead of disappointing the customer and losing the sale, your cashier still takes the order on Magestore POS and fulfill later. The cashier can also view stock level at other stores right on the POS screen and request delivery straight from that store;
  • Checkout in different sales price by store view: This is best for multi-store retailers with distinctive sales strategy at each store. A customer from Alberta can buy at a store in British Columbia with the same information he/she has known for Alberta. There’s no hiccup in customer service;
  • Manage sales staff: Greg can manage orders converted by the salesman in backend so he knows who has the best performance. At the same time, each salesman can only apply a discount on POS within his restricted maximum amount. This is to ensure an increase of conversion rate within the right profit margin;
  • Optimize search bar on POS: Magestore has enhanced the search speed and ability so customers don’t waste any second on waiting e.g. search with/without special characters.

Loyalty and customer management

Understanding customer loyalty is the key to win the modern retail race, Greg wishes to offer diverse loyalty programs and promotions. Customers can gain loyalty points or gifts based on their behavior and redeem them both online and in-store. "Already we are able to do many more things than we were able to do in the past with our previous software." - said Greg.

  • Engage customers with 3 loyalty programs: Magestore offers 3 types of loyalty programs: Reward Points, Gift Cards and Store Credits. Customers can earn reward points based on their behavior, buy/ or send gift cards to their friends, or buy/ refund in virtual credits. All of these programs are applicable throughout all sales channels to create a seamless shopping experience everywhere;
  • Apply Magento cart price rules in-store: Mr. Pet’s can run different promotions to attract customers to a specific store. This is a great tactic when launching a new store location;
  • Set more promotion rules: Besides the built-in Magento cart price rules and catalog price rules, Mr. Pet’s can run more types of promotions to engage customers and avoid obsolete inventory. E.g. setting a “Buy A bags and get B free within C months" for each product brand;
  • Automatically notify staff of applicable promotions on POS screen: Cashier and sales staff will get a notification when a customer meets the condition of promotions to redeem a free product. Then the staff can proactively notify the customer about the reward he deserves - one step ahead in customer care;
  • Track customer’s redemption history: Among thousands of offers, customers may become lost and forget to return to your store. It’s time to win them back. Mr. Pet’s staff can check how many programs a customer has joined and how many products he/ she has purchased without redeeming a free product. Reminding customers of what they have missed will bring them back to your store;
  • Display upsell cart hint on POS: Cashier can view available promotions related to an item in the current shopping cart. They can suggest to customers and upsell to a bigger deal.
Magento Omnichannel SystemMr. Pet’s launches various promotions to target different customer segments

Inventory management

Magestore POS solution comprises of many Magento-native backend features that are installed directly into Magento admin. Hence, they instantly inherit all Magento data including product, customer, tax, promotion rules, etc.

These modules work perfectly together so that all data are updated in real-time across the whole system. Hence, no matter where customers shop, they enjoy inventory visibility and personalized promotions to conduct successful shopping.

  • Real-time inventory under central management: Since Magestore POS solution is Magento-native, data doesn’t have to go through any third party. Mr. Pet’s owns their data completely and securely. Meanwhile, they can control everything in Magento admin;
  • Improved inventory visibility: Mr. Pet’s offers different products on different sales channels including websites and 9 store locations. It’s easy to make mistakes in inventory management. Fortunately, Magestore POS solution streamlines data throughout the system. Customers know what products are at which stores at a glance. Staff also have full information of available stock to convert and fulfill orders in time.

Procurement

Magento 2.3 only provides minimum support in purchasing. In this area, Magestore POS solution ensures to complement the missing part to ensure Mr. Pet’s has the right products at the right time.

  • Manage supplier, price list and purchase order (PO): Centralize procurement data in Magento admin without switching to any other system. It’s easy to convert a quotation into PO to eliminate human mistakes;
  • Filter PO by location: Refilling products for 9 store locations is error-prone. With this feature, procurement staff at each store knows what’s upcoming. They can make proper preparations to receive them;
  • Purchase products by the case: Purchasing in case often gives you a better discount. This feature defines if a product is purchased from suppliers by case or by item with corresponding costs and taxes;
  • Set different permission levels: Ensure staff only do what they’re supposed to do. Restricted users can only view and print the product list of suppliers. They can’t edit or perform other actions.

Order fulfillment

Magento Commerce has a powerful Order Management module that lets online-to-offline retailers fulfill orders from anywhere. For Magento Open Source users, Magestore POS solution also gives you the option to manage and fulfill orders in a smart way.

  • Organize and filter orders in several ways: The original Order Management module in Magestore POS Enterprise edition produces an order listing page in Magento admin. You can filter orders by status, batch or custom color tags so you can find the needed order in seconds.
  • Fulfill an order from multiple sources: Fulfillment staff can save time and reduce mistakes by selecting more than one sources at once to fulfill an order. This works well for Mr. Pet’s when they want to use Ship-from-Store method;
  • Manage refund by expiration period: Mr. Pet’s can set a custom refund expiration period for different types of products in the backend. When the cashier proceeds refund in-store for an order with an expired refund period, he/she will receive an alert.
  • Sell better with dropshipping: Dropshipping accounts for 5% of Mr. Pet’s sales orders. They still get the sales even when a product runs out of stock. Then, the supplier will deliver the product straight to the customer’s home to ensure on-time delivery.
  • Satisfy customers with store pickup / click and collect: According to iVend Retail, 81.4% of internet users worldwide ordered items online and pickup in-store in 2018. Catching up with this huge demand, Mr. Pet’s also offer this service. The cashier of the pickup store will be alerted to have the order ready by the time the customer stops by.

Reporting and Analytics

Reporting and analytics are important operation activities in fast-growing retail. Magento already provides many types of reports for eCommerce. For selling offline, Greg can use insightful data from reports created by Magestore team to make better decisions.

  • Order report: Magestore POS solution - Enterprise edition comes with built-in reports of sales orders by staff and location. It’s easy to have an overview of staff/locations with the best performance. Or make a quick action according to the report of order fulfillment status within a period.
  • Product report: Know which products are the best sellers, based on sold quantity or revenue. Greg can view the data in all stores or an individual store.
  • Reward report: This is a special type of report that is tailor-made for Mr. Pet’s. Greg can track redemptions by brand/ promotion/ supplier. He can also track redemption status and print the list of incomplete redemptions to claim with suppliers.

Business innovation and the No. 1 leader

Mr. Pet’s has set their very first footprints into omnichannel. We’ll soon see the proven statistics in real numbers. So far, Greg’s very happy with what he has.

On the other hand, Greg has gained absolute trust from his staff members as the No.1 boss. Renovating the whole business isn't easy, but Greg has led the team to a new era.

Magento Omnichannel SystemMr. Pet’s launches various promotions to target different customer segments

Greg is working on more customizations with Magestore. Omnichannel is a long process, rather than an overnight success. However, with the journey so far, Greg expresses his confidence in the outcome. Because he believes that he has a trustful partner beside, that is Magestore.

Final thoughts

All in all, there are many ways to provide customers with a seamless shopping experience. The success cases pointed out that having real-time, seamless order fulfillment and inventory management is imperative to meeting customer needs. Especially, Mr.Pets case follows exactly what we have guided you through from Chapter 1 to this last chapter 6 of the Magento Omnichannel Guide. From theory to real success stories, we hope that you find the best practices and actionable steps to apply for your own.

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