Omnichannel – It’s actually working for some retailers

Discussion
Jan 26, 2015
Al McClain

By now, we’re well acquainted with many of the difficulties of implementing a working omnichannel strategy at retail. Perhaps the biggest are structure and technology that keep employees and inventory silo’d. Even with the best of intentions, it is difficult for many chain retailers to provide a seamless shopping experience across brick and mortar and digital.

So, it was refreshing to hear, at a recent panel discussion at NRF moderated by Tom Cole, a partner at Kurt Salmon, that three big name retailers are having omnichannel success. The participants in the panel included Diane Ellis, president & CEO of The Limited; Robert "RB" Harrison, chief omnichannel officer, Macy’s; and Brent Kirby, chief omnichannel officer, Lowe’s.

[Image: Omnichannel highlights]

Mr. Cole noted that the ultimate goal of omnichannel is a seamless experience with products, engagement and levels of service. But, he cautioned, while much current focus is on mobile, and the mobile industry is driving shopping changes and growing rapidly, the percentage of transactions actually completed on mobile devices is still low.

The mobile challenge, Cole said in a follow up interview with RetailWire, is for retailers to implement change while still using legacy systems. Retailers are in a race to keep up with change and help consumers use their smartphones for everything leading up to the transaction, but not always for the transaction itself.

Ms. Ellis of The Limited said that omnichannel is a tactic for them, not necessarily a strategy. The Limited’s target is the sophisticated professional, so they stay laser focused on them. They find many customers reserve items online but come to the store to try the items on and buy them. Associates help their customers purchase the items they have reserved and ideally upsell them into complete outfits while in-store. For The Limited, associates are seen as trusted advisors, and use technology and social media to extend the relationship with customers beyond the store.

Mr. Harrison said for Macy’s customers, BOPIS (by online, pick up in-store) is being adopted rapidly. Mobile is a driving force, making it essential that digital blends with in-store activities. Harrison also said that mobile is now viewed as "primary" for tech development, that it is critical to have a single view of online and in-store inventory, and that interactive fitting rooms are the way of the future.

Lowe’s Kirby noted his customers are more educated and deal-seeking than in the past, so pricing transparency across channels is key. Lowe’s uses their website to provide "how to" videos, along with product specs and reviews. Mr. Kirby noted that many customers are now using their smartphones even while talking with associates. For him it is all about how you do more, faster — there is a need for speed, convenience and a good price. He also touted a single supply chain view in order to "unlock" the true value of inventory.

Do you think omnichannel is becoming a reality for chain retailers? What do you see as the key(s) to omnichannel success?

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19 Comments on "Omnichannel – It’s actually working for some retailers"


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Dick Seesel
Guest
5 years 29 days ago

Omni-channel is a reality whether retailers are ready for it or not. The “early adopters” on the retail side (such as Macy’s) are raising the bar so rapidly for functions like BOPIS and ship-from-store that their competitors are scrambling to catch up. (And not always smoothly.) Macy’s in particular continues to expand in this area, having just announced some restructuring of store functions and manpower planning to leverage its lead even faster.

It’s not so much about whether consumers are shopping and paying for goods using mobile devices instead of PCs (although that will continue to grow). It’s more important for retailers to break down the organizational silos that prevent the brick-and-mortar merchants and operations management from functioning smoothly alongside their e-commerce partners.

Chris Petersen, PhD.
Guest
5 years 29 days ago

For retailers, omni-channel is about strategies, tactics and overcoming legacy systems built for product merchandising in stores.

For today’s consumers, omni-channel is a behavioral lifestyle of shopping anytime, everywhere, for everything.

It will be interesting to see how the retailer success long-term correlates with reaching more touch points in the omni-channel consumer journey.

Marge Laney
Guest
5 years 29 days ago

Omni-channel is the new reality for all retailers whether they engage or not. If you’re available where and when consumers look for you, great. If not, you lose to someone who is.

Online-only retailers lack the high-engagement fidelity that only the in-store experience can deliver. Offline-only retailers don’t deliver the comfortable and informative browsing experience that consumers utilize to make their shopping itineraries. Either way, the retailer is missing an important piece of the shopper’s buying journey.

For apparel retailers the omni-channel focus should be to get the customer to engage online with the ultimate goal of getting them into the store and into the fitting room. For customer engagement, loyalty and profit opportunities nothing beats the fitting room.

Max Goldberg
Guest
5 years 29 days ago

Omni-channel is a reality at too few chain retailers. Many talk about implementing it, but few have succeeded to-date. Macy’s is the best example of launching a successful omni-channel strategy.

Omni-channel should be a strategy, not a tactic, a strategy that should pervade all aspects of a retailer’s thinking: inventory, pricing and promotion.

Successful omni-channel strategies put consumers first and ask how consumers want to shop, how they want to receive goods, how they perceive value and how they want to save time.

Gordon Arnold
Guest
5 years 29 days ago
I see Omni-channel as three separate energies contiguously supporting a corporate message and plan in the market. These divisions will be constructed to offer the market a path to purchase any and all products and services without interference caused by separate issues in the company’s point of sale system, inventory control, product availability and pricing or general accounting system. Or for that matter any other aspect restricting or refusing the need to cross channels by consumers for order tracking, support or open order editing. This is in no way an attempt to define or minimize the problems in present day Omni-channel building. It is a demonstration of how this goal may be seen as insurmountable yet for the sake of the client and company is necessary, simply because the customer community feels highly confident that is is possible and what they are due as investment purchases are made. Many of the solution offerings to date are limited in scope and content due to the range of difficulties existing in companies with self-made or multiple-vendor IT… Read more »
Dan Frechtling
Guest
5 years 29 days ago

There’s a difference between “doing” omni-channel and excelling at omni-channel. Those that excel are working back from the customer, not just working forward from the technology stack.

Working back from the customer includes documenting the customer journey. This includes the motivations that begin with researching and buying online, culminating with the instant gratification of picking up in-store—and getting human help from associates.

Working forward from the stack focuses on fulfilling specific plays like ROBI and BOPIS. The importance of supply chain capabilities and inventory transparency can’t be understated. But a retailer declaring itself a technology company and creating a Chief Omni-channel Officer is only a start.

Bill Davis
Guest
5 years 29 days ago

I believe we are in the first inning of a nine-inning game. It’s early, but some retailers have made significant progress. That being said, trying to address the underlying system issues that took 20-plus years to develop isn’t going to disappear in a year or two. And the technology landscape is maturing.

The key is to be able to reflect the customer’s interactions and relationship with the retailer in (near) real-time across all channels. That’s not possible today, regardless of what any retailer or technology provider claims, but the journey to get there should have started.

Matt Schmitt
Guest
5 years 29 days ago

The big wins show up when retailers are able to lower the hurdles for customers and to make brand interaction and the path to transactions as frictionless and flexible as possible.

BOPIS and inventory transparency are key in removing friction, but they require having new systems (web, social, mobile) to be integrated with legacy systems. That’s where the rubber meets the road.

Doug Garnett
Guest
Doug Garnett
5 years 29 days ago

It is a reality. One key to success is keeping it all in context. Online revenue is quite small (in general). So while it’s important within the total mix, it shouldn’t distract focus from doing other things right, and, as noted here, mobile’s role is unusual—influence but not transactions.

The key is to build business without getting distracted by the shiny baubles with vast sums of PR/hype/money behind them.

James Tenser
Guest
5 years 29 days ago
Some of us tend to make wisecracks about the “O” word, but we all know it means at least two things: A seamless experience for the shopper across all points of interaction with the retailer and a unified view of inventory for the retailer across all points of interaction with the shopper. I tend to focus on part two—the unified view of inventory—because I see it as a prerequisite for part one. The systems that enable this are fairly well recognized now, and market leaders like Macy’s and Lowe’s leverage these capabilities for competitive advantages. Here are two tests I like to apply for determine if a retailer is truly “O”: Search an item on the website or mobile site and check its availability at your closest store. Then go to the store and find it there as promised. Or call the local store and ask the department clerk if they can check if a certain item is presently available in a certain size or color. They should check the POS terminal for this information… Read more »
Kai Clarke
Guest
5 years 29 days ago

No. Mobile shopping is still not a reality for most retailers. The key for omnichannel success is confirmed, sustained growth over an extended period of time, which can be directly traced back to an omnichannel position and set of programs.

Peter Charness
Guest
5 years 29 days ago

Omnichannel = Customer Service. It’s mandatory. As some retailers wrestle their legacy systems into shape, the expectation of the customer to receive this same service everywhere just grows. Reality, and inevitable.

Arie Shpanya
Guest
5 years 29 days ago

Omnichannel is already a reality that chain retailers have to provide or risk getting left behind. Even if mobile is still mainly a browsing medium, this could change with time and retailers have to be ready for that. Here are the top 3 things I see as key to omnichannel retail:

  1. Pricing: Prices should be consistent across channels.
  2. Discounts: While pricing should be the same, mobile-only discounts could be the way to boost those mobile checkout rates.
  3. Images: Several high quality images are a must for each product. Smartphones and tablets are much smaller than desktops, but shoppers must still feel like they’re getting the full shopping experience to complete a purchase.
Craig Sundstrom
Guest
5 years 29 days ago

The (cranky) Finance Guy in me responds “No, Mr. Cole, the ‘ultimate goal’ of omnichannel is—or at least should be—to increase a company’s profitability.” Amazon (and others…many of them on longer in business) has (have) shown us time and time again that it’s not hard to claim success when you don’t pay any attention to the cost side of things. Admittedly, you have to solve the many logistics and marketing issues involved, and I applaud those who are making progress on that front, but it’s only half the story.

Joel Rubinson
Guest
5 years 29 days ago

I would like to add that omnichannel is also about understanding how to compete on data. When a retailer learns how to attract massive first-party audiences who interact using a persistent log-in, the data dividend will be enormous.

Jeff Berry
Guest
Jeff Berry
5 years 29 days ago

In the 2015 COLLOQUY Loyalty Census, to be published in February, we predict that leading retailers will continue to differentiate themselves by investing in innovative technologies. We see technology integration that enhances the customer experience, gives customers choice and keeps them engaged as the key to omnichannel success.

In the case of mobile technology, thinking of mobile as separate and distinct from your overall approach to your loyalty program is short-sighted and does not leverage the advantages of the technology itself, namely real-time interaction and relevant dialogue. Nor does it leverage the customer insights or motivation mechanism of your loyalty program.

David Coleman
Guest
David Coleman
5 years 29 days ago
There is no question that omnichannel is a reality. The bigger question is whether its success is measured using the right metrics When all the appropriate costs are considered, does OC strategy improve profitability? The retail bankruptcy pleadings are littered with stories of retailers who were very successful among a number of metrics, with the notable exception being profitability. The longer term OC strategy has to overcome two major obstacles. First, maintaining accurate in-store inventory location integrity. This will always be a challenge, as long as consumers (including myself) pick up an item, change their mind about the item, and subsequently leave the item on the first open shelf they see. When a customer drives to the store to pick up their BOPIS order for this item, and this item is not in the location it’s supposed to be in, there will definitely be a “customer experience” but not the desired one. (RFID technology will hopefully advance enough in the future to identify mis-shelved items in an efficient manner). The second challenge is making the… Read more »
Mark Price
Guest
Mark Price
5 years 28 days ago

The most critical part of ecommerce today is BOPIS (buy online, pickup in store). The combination of online research and offline real-time delivery makes a compelling case.

To achieve this, retailers must be able to track inventory online by store and then sync pricing and product offerings between channels—which are difficult tasks.

Indhu PAvul
Guest

Omnichannel is no longer a luxury, it is a necessity. Retail banks are gaining lot of customer engagement from their branch transformation strategy because of deploying an omnichannel solution.

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