THE NEXT FRONTIER OF RETAIL BUSINESS
The retail environment has seen a multitude of changes over the last decade. From the evolution of e-commerce to social media and mobility, there are now many more variables to consider beyond bricks and mortar. This has led retailers to adopt a new “Omni-Channel” philosophy that gives customers the ability to interact and transact with a store via any channel – in person, over the phone, or online – and experience the same outcomes and level of service
Omnichannel (also spelled omni-channel) is a multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store.
While the thought of expanding operations to keep up with this evolution is a daunting prospect for many retailers, the truth is that customer expectation has already made the change necessary. Omni-channel retail has enabled many businesses to capitalize on new opportunities without compromising their central value propositions. For others, Omni-Channel introduces a level of complexity that creates many challenges. Retailers that don’t have a balanced and adaptable ecosystem may find these challenges can make it extremely difficult to adopt new initiatives, forcing them to spend excessive amounts of time managing the associated growth in operational complexity.
Top 4 challenges for Omni-Channel Retailing
Aligning inventory with omni-channel demands
Shoppers now use a variety of channels to research and purchase products. This can make it difficult for retailers to form a clear picture of inventory requirements, which in turn complicates the retail value chain. While omni-channel shopping presents retailers with new avenues of income, it also often highlights shortcomings of their legacy systems, particularly in terms of allocations, consolidated reporting, inventory, marketing, merchandising, post-sales services and promotions.
Customers look for confidence in retailers and expect the information they find while researching to be accurate and timely regardless of where they find it. By extension, customers also expect to be able to transact in the same channels where they conduct their research; to buy online for immediate or same-day delivery, pick up in-store, and return or exchange purchases made online at physical locations, if necessary.
Remaining competitive in an ever-changing market
The complexity of omni-channel retail – coupled with the pressures of competing with larger and often international companies that have greater purchasing power – has led many mid-market retailers to find ways of reducing traditional supply chain layers. For example, some have chosen to deal directly with manufacturers. Others have started importing, or have changed their product range to cater to less competitive niches.
Providing added value
Omni-channel retail and social media have made customers more price-aware and product- savvy. However, omni-channel has also created opportunities for retailers to provide a compelling point of difference in an increasingly price-conscious market.
E-commerce and digital channels have introduced a new aspect to marketing. The challenge for retailers is to translate this information into marketing and merchandising that is meaningful to their target customers.
As customers are now accustomed to a much wider range of purchasing options, it is more important than ever for retailers to guide purchase decisions with useful advice and provide value beyond the label price of the products they sell.
Gaining a clearer customer view across multiple channels
The challenge for retailers is to capture information across multiple channels so it can be analyzed and translated into usable insights. This information is often referred to as “big data” – large, unstructured, and constantly changing sets of data and that organizations can use to yield accurate insights.
Although many retailers approach each big data source as a separate “silo”, capturing and standardising the information in a single business-wide platform is the best way to use it.
As customers become more accustomed to interacting with businesses across traditional and digital channels, retailers will need to evolve so their own operational ecosystems meet these expectations. The question for many retailers is not when they will respond and adapt their value chains to support omni- channel retail, but rather how they will approach the challenge.
Integrated IT system will present retailers with the most efficient and cost-effective option for turning these challenges into opportunities. We encourage retailers to never lose sight of the benefits of omni-channel operations. With the ability to process and analyze big data to extract customer insights and the tools to tailor internal processes accordingly, today’s retailers are well equipped to realize the potential inherent in omni-channel retail.