The first issue I see is the definition of “omni-channel” itself. If retailers simply use it as a buzzword indicating that they operate both brick-and-mortar stores and e-commerce, then they really don’t get it. The idea behind omni-channel is to integrate all of the retailer’s shopping channels into a more holistic experience. (Sorry about more buzzwords.)

Investments in both systems and logistics are critical. Macy’s is probably the leading example of a store that has taken the lead on initiatives like BOPIS, order fulfillment from store inventories and so forth. So if a large number of stores describe themselves as “lagging,” that’s probably an accurate assessment.

Maybe an obvious one is not fixating on the term “omni-channel” and instead thinking about the customer experience and how each functional area affects it. It’s not just about channels, as in sales or interactions, but the whole experience that includes a lot of people who don’t necessarily line up with a sales or service channel. A less obvious challenge may be how to go about better leveraging supplier partners beyond the supply chain to include collaboration around consumer engagement inside and beyond the store. You would think the “whole” would be more effective than the sum of the parts, with retailers and suppliers working mostly independently to influence consumers.

In the eyes of today’s consumers, there is no “go slow.” Omni-channel options for consumers are increasing and getting better everyday.

To execute omni-channel in ways that fulfill consumer expectations requires substantial infrastructure and systems investment. The obvious challenge traditional retailers are facing is building the supply chain side of being able to manage virtual inventory, and fulfill a consumer purchase from anywhere, to anywhere.

The less obvious and most important challenge facing retailers is creating a “seamless” consumer experience. Consumers expect to start shopping online and then continue that experience in-store.

The greatest challenge for traditional brick-and-mortar retailers is that the consumer experience is not just about a sale of an item today, but is also about creating an on-going relationship with consumers across channels.

On the front-end of omni-channel there is a new world of marketing which no one has completely deciphered, and retailers have co-opted the bulk of their past marketing energies to suppliers. Retailers are the merchants, right? So, that is the big nut, in my opinion, but not just for retailers of course.

On the back-end of omni-channel, retailers have a distinct advantage with a catch-22. We enjoy one of the most efficient product distribution systems in the world. The current focus on rapid fulfillment to individual consumers runs counter to that model and is a bit confounding to distributors. I think the “slow-go approach” is smart, especially for grocers who operate with the lowest margins in the retail world. Everyone will always eat, but how many will make this behavior a habit in the long term?

I’m actually surprised that 11 percent of retailers say they can handle cross-channel fulfillment.

Omni-channel is the burning platform facing nearly every retail company, particularly those who carry commodity merchandise. Whatever you call it, frictionless commerce across channels is a must, and the most compelling threat to some retailers’ existence. Let’s hope that executives get the budget they need to make this happen.

Traditional brick-and-mortar retailers built their business processes, supply chains, etc., towards optimized product and service delivery. When they add channels and then merge them, it goes outside of their culture and what made them successful as retailers. Inertia is something all retailers face, and more so for traditional retailers versus the ones born of e-commerce’s first age. Most obvious challenge? Communicating with shoppers across all the channels proactively rather than waiting for them to hit the stores/websites/social media sites.

Absolutely no surprise! The more concerning part about this is that there seems to be very little movement to change this. Upgrades to their legacy back-end systems should have happened a decade ago, at which time retailers should have put a more flexible system in place capable of changing easily over time.

The task is so massive that it will interrupt retail operations and require process changes and training.

The NRF needs an omni-channel czar.

Every day, I encounter retailers who struggle to build omni-channel fulfillment capabilities. The enormous gap between what retailers do and say they need to do has not shrunk.

The reason?

It’s NOT that retailers are not smart. They know they need to do this. That’s why the surveys always show their awareness.

It’s NOT that retailers are not hard-working. Retail is tough, and anyone in the business works super hard.

It’s because of money. Retailers are always under margin pressures, and they only have so much money to invest in technology. Until very recently, distributed-order management solutions have been expensive and complicated. Only tier one retail has been able to deploy them.

For the rest of retail, the only way out is to adopt lighter, less-expensive technologies. Cloud-based. Low up-front costs. Aligned to provide value for the long haul.

With the lighter, less-expensive distributed-order management solutions available today, retailers have no excuse to go slow anymore.

The gap will close rapidly in the next one to two years.

The biggest challenge retailers face is paying too much attention to hype and not enough attention to: 1.) Hiring and training correctly and 2.) Competitive activity. Every grocer in the U.S. seems to put out a weekly flyer saying, “look at me and see what I am doing for you.” When I get five of these in the mail and I compare one to the other I often find huge price swings. Why? If my retailer is intent on doing his best for me then why so much difference in pricing for the very same item? That is the challenge retailers face! You don’t need omni-channel or any other hyphenated word to correct this problem. You need to know what is going on in the marketplace in addition to knowing what is going on in your store. I mostly see retailers who don’t know what is going on in their stores and have even less of an idea as to what is going on in the marketplace. What I have observed is that the really… Read more »

Today’s consumers have significant influence over one another. Retailers must learn how they can capitalize upon this to impact consumer loyalty and deepen their relationships with the brand. We have seen merchants create a consistent and trustworthy brand experience in which consumers can research, buy, track, receive and return purchases wherever, whenever and however they please. Using e-commerce and mobile commerce capabilities, retailers can enable seamless consumer interactions across all channels. Then they can overcome cross-functional obstacles to implement order management processes to ensure that each consumer order is fulfilled via the most efficient and cost-effective path. Finally, when they use advanced web analytics to monitor how consumers are responding to personalized targeting so retailers can continually improve e-commerce processes. Benefits include: reduced consumer acquisition cost, greater order accuracy and profitability, and improved consumer satisfaction. I have seen consolidation of web infrastructure resulting in a 55% improvement in page load times and implementation of more targeted marketing to increase conversion rates, retention and revenue. The current industry apprehension need not be so prevalent, in my… Read more »

I’ve met with quite a few retailers who have built a nice eCommerce business and also have a legacy (brick and mortar) business that is still comping up, but I have met very few who have done anything substantive to connect the two and deliver omnichannel. Two challenges I’m hearing that are not emphasized in the article: 1. Incentives and behavior of front line employees – Mall-based specialty and other retailers with a heavy reliance on commissioned sales people have a front line that is not incented to redirect business to eCommerce when a particular item that the customer wants is not on the shop floor. This is a surmountable challenge, but it requires a cross functional project involving incentive design, IT, and change management with the staff. Hard to do if you are one of the retailers who answered “yes” to being “too distracted to prioritize and focus.” 2. Customer experience – Multi-channel returns and buy online, pick up in store are just the beginning here. The long-term opportunity is to develop the seamless… Read more »

Minimum wage. Cannot have it both ways of having a minimum wage labor force and trying to implement an omni-channel experience that involves employees with a knack for technology and multitasking.

The point of sale and ordering system are outdated and rely on vendors who yet to build bridge solutions or rollout new POS systems that can accommodate omni-channel. Using a second screen such as a tablet to view BOPIS orders is fine for a small business, but not an enterprise rollout. That is the major roadblock right now in terms of infrastructure.

McDonald’s is the perfect example—they cannot rely on the minimum wage labor and their 20th century outdated order fulfillment system to compete with gourmet burger establishments that allow customers to order from their mobile phone and the burgers are nearly the same price.

The number one obstacle to omni-channel support is having an accurate electronic inventory. Until either serial number tracking is in place or fulfillment is segregated from customer in-store sales, the veracity of the inventory in the computer will always be suspect.

I had the classic experience when I went skiing in Utah a couple years ago. The canyons required snow tires or chains, so we bought a set of chains for the rental car in the local Walmart. Fortunately we didn’t have to use them so we returned them at the end of the week. I can’t believe we were the first to do this.

I really think the best answer is to separate the consumer fulfillment process from the retail store consumer sales. It might make sense for retailers to embrace showrooming by putting into place a business model that allows consumers to have items delivered directly to their homes. By acknowledging the store is really just a showroom, the only dynamic inventory is in the fulfillment center.

Companies attempting to implement omni-channel competencies now find that re-balancing across channels and the necessary coordination of customer touch points (assortment, pricing, promotions) is complicated by the fact that the different channel applications that support these features do not always have the same capabilities. In some cases, entire business processes are still replicated and customized in the individual channels. At the same time, the Information Technology teams for the applications supporting these retail channels are struggling to maintain the independent, and sometimes competing, support models for their respective application sets and architectures. Particularly in the mid-sized retail market where resources are already at a premium, the challenge of maintaining technology currency across multiple platforms can be daunting. The resulting infrastructure supporting multi-channel retailing has become a hodge-podge of middleware components patched together to create the illusion of integration. Software and service components have been implemented (sometimes independently) to ensure that each channel “appears” to have a full set of information. While the software industry has been unable to resolve these issues at an architectural level,… Read more »