Omni-Channel Retail and its challenges to leadership

Gone are the days when the Retail was only about 4 key parameters- Right product, Right range, competitive price & high availability.

Omni channel retail has stretched boundaries beyond these parameters , and there are additional factors that most of the 21st century retailers needs to focus to succeed in today’s competitive world to win customer loyalty.

Well let’s first look at the jargon ‘Multi-Channel’ or ‘Omni Channel’ used quite commonly these days and try to make it simpler before we move any further.

Omni-channel retailing is an expansion of multi-channel retailing. The major change between the two is the level of integration. Multi-channel is usually identified as a non-integrated way to approach customers while Omni-channel requires coherent and absolute integration so that the details and prices of goods on offer are consistent across the different channels.

Everyone looks for options & convenience to save time, money etc.. Yet the objective is to find the best by saving time, money or hassle to search be it within store or over Internet. In addition, Customers from different age group need different options to buy and Deliver shopping to suite their lifestyle.

Hence the clear ask of the time is ‘Omni Channel’- a Business model used by retailers to provide customers with consistent & convenient shopping experience throughout any mode of purchase- Brick and Mortar stores, Online, Mobile, Tablets ….  

If we cut through the clutter, we would see 7 key pillars that are challenging at the moment and many retailers concentrate on. We can equally use them to measure a retailer’s Omni-channel maturity

One: Unified Inventory across channels:

A holistic view of your stock, where it is, why it’s there, and how to get access to it with ease

Two: Seamless Commerce: Reduce pain points for the customer through the purchase and post purchase process. Customers want to give you their money, don't make it hard for them. Keep customers at heart of what you do and provide them consistent and convenient experience across channels. Definitely  convenience is increasingly becoming the key battleground for online retail

Three: Contextual Personalisation:

Understanding your customer deeply, across all of their interactions with your business.

‘One view of the Customer’ is the need of the hour. It is no good if a customer who has shopped online for grocery cannot be seen as the same customer when she swipes her loyalty card in store. It is no good if I as a customer need to login to the grocery site and then again login to the clothing site to shop. Its good news if I can change my home address online and find it reflected on my mobile app instantly.

Four:Product Insight:

Providing visibility into detailed product information and associated metadata to help facilitate analytics and to provide customers with the ability to find the right product for their purpose

Five: Extensive Delivery options & An integrated fulfilment strategy:

Order online, collect @ store

Order in store, deliver @ home

Order from the app, deliver next day

Order over phone, deliver same day

…and the list goes on…

The ability to offer customers many delivery choices, short lead times and convenience hinges on an integrated fulfilment strategy. In the world of general merchandise and clothing, products may come directly from suppliers and not always through the retailer’s network. If I as a customer want it delivered on my kid's birthday, can you reliably do it? If I want the goods brought home at a selected 1, 2 hour slot, can you guarantee that?

If you want to press the accelerator a bit further, can the fulfilment systems respond to change? Customers do change their mind don’t they? After asking for a store delivery, if a customer calls back to re-route the delivery to home, can the retailer respond to it? Can a retailer respond to Order  Amendments up-to last minute?

Six: Multi-channel returns & Quick refunds- An opportunity to win immediate customer loyalty

Again most of the Retailers miss this. They don’t pay same attention to Returns as first time Sales. If the business line is simply fresh food and groceries, the need for a returns capability is minimal. But when it comes to clothing, electrical or home goods, the percentage of returns ranges from 10% – 25% or more. Whilst returns isn't treated as desirable for the business, making it hassle free and convenient drives repeat purchases. And the customers have started to demand Returns wherever, however. Here is some food for thought…

If I as a customer collected an item in store, can I return it in any store? If I return the goods, will the money come back within quick time irrespective of where it is ordered? Does the retailer have a strategy for BORIS (Bought Online Return In Store)?…well simple ask isn’t it? If the answer is YES, raise the bar just a bit – can they handle ‘Returns as door’ as well by requesting for returns online? This would stump most retailers.

Seven: Immediacy- The latest entrant that can prove to be a key differentiator

We are in a world of serving customers who are digital natives, and immediacy can be your USP. How quickly you can fulfil a customer need speaks a lot about your fulfilment maturity.

1 hour Delivery, Same day delivery, same day collection are the latest customer propositions that are being addressed by most retailers to gain customer loyalty

Along with immediacy, ability to track my order is a necessity. Any customer contacts to order analytics, Facebook or Twitter bashing will lead you towards Fulfilment queries. The contacts to order ratio should be kept minimal so that the focus can be on serving customers better each day.

Well, it is all about ‘on time delivery’, clear ‘parcel tracking’ and supplier neutral experience. No wonder order fulfilment is considered the long pole in the Omni-channel tent.

Underpinning all these pillars is the IT strategy- Does the retailer has underlying IT platform capable of scaling to deal with peak volumes? Is it capable of embedding to local business processes when an international rollout is attempted? And is technology platform architected for a global rollout?

Surely there is a lot more to bringing Omni-channel retailing to life…but this is a start.

Disclaimer: The points mentioned above is purely the author’s perspective, and influenced by experts who know more but write less. This does not reflect the views of any organization.