I’ve met with almost 100 retail companies this spring, and the issues raised by the RSR study are very much on their minds. There are still persistent discussions about how to credit an online sale made in a store, or the return of an online sale item to a store. Those retailers who see the channel as more important than the brand will always play catch-up to the visionaries who’ve moved ahead.

From our experience it’s like many things; all strategy sounds good until you try to implement it. It’s easy to say that cross channel is how customers shop now, but the reality is that most retailers are not set up that way. Just look at Walmart. Their .com is in SF and their retail is in Bentonville. That alone tells you a lot: set up wrong from the get go . .. .which is the struggle retailers are faced with – re-doing their organizations towards an integrated experience. This will not happen overnight.

Aligning and maintaining common objectives across traditionally disparate departments remains a tremendous challenge. Often the overall cross-channel shopping objective conflicts with the traditional departmental success criteria and their remuneration programs. Technological issues can always be addressed by throwing more money at the problem. Organizational issues are far more complex as they deal with emotions and status quo workflows. Change management and new workflows are often the most difficult obstacles to overcome.

Top management needs to talk the talk and walk the walk if cross-channel shopping is going to become a reality for many retailers. Silos need to come down and rewards for creating and implementing cross-channel strategies need to be established. Management must be ready to spend what it takes to put the systems and processes in place to make the plan a reality. Cross-channel is what consumers want. Management needs to deliver.

It largely depends on who we are talking about here – pure plays or traditional retailers trying to tackle the omnichannel conundrum with a bricks and mortar mindset still stored away in the backs of their minds. For the traditional retailers moving into omnichannel, one of the biggest hurdles tends to be structure of the organization. You have a bricks and mortar store manager responsible for her P&L and the head of eCommerce responsible for his P&L. Battles ensue and omnichannel becomes a difficult beast to tackle without fully-fledged cooperation between these channels. As a result, customer experience is what suffers as the retailer loses its cutting edge and the consistency of how its brand is represented. So, yes, incentives are a large part of the problem. From a technology standpoint, the eCommerce ecosystem is vast and fast-moving. It’s not feasible for CIOs and IT heads to rip out technology for the latest and greatest. That calls for cloud technology,SaaS payment models, robust API plug-ins to existing infrastructure, and for the different technology vendors to… Read more »

My experience is that legacy systems are the biggest obstacles to creating a seamless omni-channel shopping experience. A real employee issue is how does the bricks & mortar store get credit for the on-line transaction that occurs at the store. Without this in place, the store employees will kill any on-line sales at the store even though they may be losing customers.

My advice is to get the system infrastructure right first. Then the organizational issues can be addressed.

The incentives to evolve are there. However, the business operating models have not embraced this changing marketplace. Business model innovation, to capture the process models, the technology models, the strategy models, and business partner models (for CPG partners) has to take top priority.

The next challenge is the “how” to innovate. I have always heard, “I have worked with this company for decades, what can you tell me that I don’t already know?” Well, how about holding a round table-style discussion with non-competing retailers, CPGs, even execs from other businesses, like hospitality or airlines? Find out how they are mastering omnichannel, and building TRUE loyalty while they’re at it?

Bottom line, if you continue to try to get new ideas from the same people who are struggling to master the omnichannel challenge, you’ll continue to get the same results.

The problem doesn’t reside in “Technology.” It is a cultural one that falls in the execution capabilities of the organization(s).

Making changes is difficult in the omni-channel, BIG data, allocation, merchandising, or numerous other systems of any organization. Companies have to recognize the benefit—that starts at the top in the C-suite—and then prioritize the plan, and offer it support.

If the retailer can’t add the omni-channel platform to the mix, step aside and muddle through on the items that are priority projects. A poor solution. But it’s the reality of what is likely to happen in an environment where that high speed train is looking to shift gears to 230 kilometers per hour.

Many retailers in the food industry are typically and singularly driven by the issues that are impacting them currently, and some still do not see the light at the end of the tunnel when it comes to e-commerce, social media, and other emerging customer touch points.

But despite this myopia, it is a mistake for them not to think their businesses need a comprehensive omni-channel strategy, and even further, a senior leader that leads this charge internally. Consumers are moving away from conventional communications such as paper, TV, radio and the like, towards a more personalized, mobile application-based world. There should be no mistake on behalf of retailers in all channels that move lethargically into the future that they do so at their own peril.

As the author of today’s post indicates, barriers to adoption are both organizational and technical. Of the two, retailers should first address the organization issues as part of their comprehensive strategy. The technology will likely flow more intelligently from this new structure. One last word of advice; HURRY!

Fiefdoms are extremely valuable management tools, giving individuals limited purview so that they will optimize within their own boundaries. This of course often leads to strong leaders seeking to expand their own boundaries. Bringing together distinct modalities (online-mobile-bricks) into a unified whole (convergence) isn’t a lot different, management-wise, from selling cheese in three departments in the bricks store: dairy, grocery deli and service deli. In that case, the problem is alleviated by selling different brands in the different departments of the same store. This is NOT going to work for multi-modal/channel retail. It’s the same problem, on steroids, with the convergence of multi-modal/channel retail. The resolution is in the mind of the single individual to whom ALL three modes/channels report. Weakening the natural tendency of individual managers to optimize their own fiefdoms isn’t going to work. The beginning of the solution is properly recognizing the problem. “Selfishness” is a powerful force for creating great organizations. But the cooperation needed lies in top management building mutual benefits, whether competitive or otherwise, that drive the enterprise. Table… Read more »

I would suggest that many retailers are likely caught up in omnidirectional tactical initiatives. Thus, they haven’t fully decided who they want to be and for whom they would like to be it.

When you know that, all of your strategies naturally align. Everything becomes focused and all move in one direction towards one clearly defined objective.

If it is not clear, there is simply churn as they fall further and further behind.

Legacy systems or getting it done isn’t the issue. The issue is what to do and for whom. Most are busy doing everything and getting nothing.

Technology and, in particular, legacy systems are an age old problem for retail. Systems have been cobbled together over the years often leaving the retailer with redundancy and multiple versions of the truth.

But alas, in today’s world and especially with the cloud, there are ways to address the technological issues. The more difficult issues are in the mindset of the organization from the top down.

I suggest a few minutes with Terry Lundgren for some mind expanding then roll up the sleeves and rethink what’s possible. Oops did i just steal that from AT&T? 🙂

Some companies are slow to adopt the cross-channel shopping experience. They aren’t sure what to do. Early adopters are showing that it works and it may be the future of retail. Beyond any technical issues, it is a choice of where to spend or shift marketing/advertising dollars. And now you have brand managers as well as channel managers. Retail is in a transitional stage. It’s not business as usual, or the way it used to be. Retailers must keep up or they may eventually be playing catch up.

What’s holding back progress is investing in terms like “omni-channel” and “cross-channel” and even worse—creating titles and departments with those names. Those are marketers’ terms—created so vendors can sell their “omni-channel” prescriptions and solutions.

Giving something a name and a department causes execs to ask, “What about the omni-channel part of this promotion?” as an afterthought instead of embedding the concept deep into the organizational DNA.

The organizational challenges are numerous and multilevel; well-discussed by several panelists. There are the fundamental strategic issues, followed by implementation. Then there are supply chain issues and logistics with very large numbers of vendors to work with multi-site forecasts, creating another challenging hurdle with cost constraints and lead times to control inventory costs.

This whole thing reminds me of the quote from Anna Karenina: “Happy families are all alike, unhappy families are unhappy in their own unique ways.” Look, retail isn’t failing the omnichannel problem, retail is failing the retail problem—and so are all of the folks in the ecosystem who have a stake in the game. But that’s cool, because we’ll figure it out. Our way is to collaborate with our customers, suppliers and ecosystem partners to figure out how to be relevant and add value. what’s the point of solving questions of demand planning when the way customers shop is such a moving target? And do enterprise vendors really do things incrementally? No, they wait until things are baked. Can we afford that kind of delay? So the answer to your question is, I don’t know, how do we figure out an industry-wide, demand-side, unknown? If Amazon innovates by putting together teams that are no larger than a size that can eat two pizzas, as an industry, do we need to think in these terms? And… Read more »

People, process, technology … it sounds like a cliche but it’s as true as ever; all 3 have to be in place in order to transform a business. Another key is to drive the transformation toward a clear strategic vision. Going omni-channel because “everyone’s doing it” or “we have to compete with Amazon” are not sufficient as rallying cries to get an entire company lined up behind major change. Set your vision for your brand and your customer experience, clearly articulate how omnichannel will support that, and then rally and align your business behind that.