of Omnichannel Retail
While eCommerce seems to grow substantially, physical stores still continue to dominate in most categories. Thus, to succeed in today’s omnichannel retail world, business owners need to boost sales in both online-offline stores by embedding accurate retail insight into their merchandising process. This chapter will help you understand “why a retail need to go Omnichannel” by answering 2 questions:
- How customers have changed their insight in shopping
- Why Omnichannel Retail Insight has gone beyond Customer Expectation
OMNICHANNEL RETAIL INSIGHT FROM CUSTOMER VIEW
THE RISING OF OMNI-SHOPPERS
At the “Internet of Things” era, every retailer is expected to have an online webstore. In the early of 2000s, it was predicted that e-commerce would soon dominate the whole retail market due to the convenience of making a purchase within some clicks.
However, this scenario has not come yet, since statistics from Omni-channel Shopping Preferences Study has shown that:
- 95% of retail sales belong to brick-and-mortar retailers
- 61% of shoppers use physical stores
- 2⁄3 of online purchasers use offline stores before and after buying
- Physical stores boost online revenue.
These figures seem to turn retailers to focus more on physical channels, but let’s have a look at the chart below:
As shown in this chart, only 7% of customers are online-only shoppers and 20% of themare offline-only customers.
However, what they demand now is more than shopping in multiple channels.They expect to experiencea near-real-time shopping journey in various channels, which is called Omni- channel retailing. Consequently, these majority of multi-channel customers will be simply converted to Omni-shoppers.
HIGHER CUSTOMER’S EXPECTATION
In the digital century, people can connect with each other by a click.
You can inherently see the fun fact that the number of devices now is bigger than the number of people in your house. It means that modern consumers have plenty of channels to approach your products as well as your competitors’ and that has changed the eCommerce rules.
Particularly, good looking e-commerce site is not enough for your business to succeed in the long way.
Moreover, you need an accurate retail insight on customer expectations, such as the high speed and the convenience customers gain when shopping at your store (both online and point-of-sale at physical stores).
No matter what they are searching for, a $10,000 watch or a $10 toothbrush, they don’t care about anything but a seamless buying experience.
What customers expect is meet – need.
And this is the origin of “Why omnichannel is important”.
Let’s study an example. If a customer comes to a store and her favorite product is out of stock, she can easily lose her interest in that store. Even in case the staff can quickly check and summon that item from other branches, it will take so long.
Imagine that a 90-second red traffic light can drive people crazy, so how long she can stand waiting for that staff?
In the end, she expects that her favorite product has to be always in store. Otherwise, within the period of a click, she would like to know how she can get it, where she can go to and pick up at store or when she get it shipped to her house.
Similarly, online shoppers expect the same thing. They don’t want to see the “unavailable” or “Out-of-stock” tag under their favorite products in the webstore.
Besides, according to a survey conducted by Force, 98% of interviewed people believe that purchase, delivery and returns should be accessible through all channels.
In a nutshell, it indicates that the ongoing digitalization has resulted in a new generation of customers who use different channels and devices during their buying journey. They also express an increasingly higher expectation from retailers, especially a seamless experience rather than just high-quality products or services.
Fortunately, Omnichannel retailing would give retailers the view of retail insight to solve successfully these perennial problems.
It allows shoppers to purchase products on many well-integrated channels to create seamless experience for customers. Thus, business could meet consumer demand.
OMNICHANNEL RETAIL INSIGHT FROM RETAILER VIEW
CROSS-CHANNEL INVENTORY VISIBILITY
Inventory Management is an intense pain to most retailers, especially those who sell across many channels. They encounter several challenges when managing multiple warehouses.
That is why the key of modern retail insight has become Omnichannel. It evolves to be an end-to-end supply chain management empowered by cross-channel inventory visibility.
Basically, an Omni-channel inventory management depends on 4 main factors:
It is coherently synchronized with inventory data in all warehouses so that you can automatically manage all the suppliers and purchases through one screen. It helps reduce the risk of out-of-stock situation since retailers are always updated about real-time inventory data.
With Omni-channel retail insight, data from all channels are synchronized. Retailers can easily manage orders while consumers can buy items online and pick up in store. Omnichannel fulfillment offers a seamless consumer experience regardless of how and where people shop or return items.
Real-time and overview report
Omni-channel strategy requires all data to be centralized. It means that retailers can have the realtime and overview report of inventory and purchase within a click
First, it is easy to understand that omni-channel insight drives greater sales than multi-channel or single-channel.
For example, online customers are able to compare the price and easily distracted by alternative options, and other things, which leads to a large amount of cart-abandon and high chance of losing interest.
Besides, according to International Council of Shopping Centres (ICSC), 61% of those who purchased online and picked up in store make an additional purchase in-person.
In their research, for customers who only shop online before in-store, promotions double the profit. In contrast, for customers who only shop in-stores, online coupons lower the profits by nearly two times.
However, noticeably, it is reported that omni-channel customers spend 20% more than multi-channel customers. Multi-channel retailers also have both online and offline latforms. In other words, retailers who are adopting Omnichannel insight could use online to score offline wins.
A recent survey by HRC Advisory brought home the truth that nearly 75% of respondents found e-commerce transactions were stealing sales from store-fronts.
People think Omnichannel Retail Insight is all about customer experience and continue to look at online and offline as 2 disjoint channels instead of leveraging one to support the other, despite the fact that 2 factors could sustain each other very well.
For instance, Beacon technology helps retailers communicate with customers using an online app to enhance his omnichannel retail system.
Based on the user’s previous shopping behaviour, personal offers are sent to the user when he/she is in the vicinity of a store (special offers are generated based on their shopping history). Thus, companies could reap up-selling, as well as cross-selling again.
Furthermore, according to a study by Business Insider, beacon sales drove sales in retail by $40 billion 2016.
In brief, only a handful of retailers have currently applied an Omnichannel retail system to drive its huge potential for in-store sales.
Have you ever wondered why many studies say that:
Omni-channel customers got a higher retention rate than customers in other types of retailing model.
Omni-channel insight can help retailers to overcome multi-channel drawbacks. One of those is customer service.
With the former retail models, customers’ feedbacks or requests are scattered among many platforms such as social networks, live chat, email, call center, etc. This will put a huge stress on Customer Service Teams in any companies.
Members of Service team always have to think quickly to prevent drawbacks before an angry customer experience turns into a bad review on the website or social media.
However, with the automatic process of customer service in omni-channel retail, with the help from a trustworthy omnichannel solution, all of the work can be done efficiently.
Moreover, omni-channel allows retailers to keep track of customer satisfaction on each product by the synchronization of data.
Omnichannel Retail Insight demands a customer-centric view.
As a result, customer behavior will be analyzed and synchronized into system based on customer purchase history. Then retailers can work on the plan to create customer quality services by providing good customer supports, detailed and precise information and giving personalized experience.
Furthermore, interacting with customers across multi-channel, instead of solely at physical store’s point-of-sale, also produces big data which could help your staffs support customers beyond their expectation.
One important principle of marketing is ubiquity.
However, over time, regardless of your interesting marketing content, customers will soon get bored of your marketing, if it does not satisfy their personal demand. This will be detrimental to your marketing plan if you want to run a huge campaign that reaches to your customers in every channel.
Omni-channel marketing comes up as a brand-new generation. It involves the support from technology. The success story in marketing recently is about how to deliver the content that customer needs.
Moreover, it needs to be personalized with Omnichannel Retail Insight.
Along with your strategies, the Omni-channel retail system can deliver a unique content with the right message to the most effective channel for each customer. It sounds fictional but it is real for any omni-channel retailers.
That is why Omnichannel has become more and more important for all retailers.