Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research's weekly analysis on emerging issues facing retailers, presented here for discussion.
A few days ago I was talking with a former retail colleague about the industry and she issued an interesting challenge from another friend. This friend was baffled by one of her favorite retailers.
The retailer offers a broad assortment of turtlenecks in all colors and sizes in its stores. Sadly for her, the online offering was narrower, and she couldn't just order the ones she wanted. She was "required" to visit one of their stores. I was asked, "Why is the online selection of relaxed turtlenecks online so small? Isn't it cheaper to fill an online order?"
I said, "Likely they've decided they don't want to keep extra inventory dedicated in their distribution centers. They feel it's more efficient to send people to the stores and they don't have the technology to fulfill from stores efficiently."
Well kids, this is a really unfortunate answer and bad decision-making on the part of the retailer. Even though we found in this year's omni-channel retail benchmark that, in aggregate, cross-channel shoppers are no more profitable than single channel shoppers, apparel was the big outlier. Thirty-six percent report their multi-channel shoppers are significantly more profitable. And here's a lady just waiting for them to pull the trigger. Who knows how many colors she'd have of those turtlenecks if the company could do it for her?
I mean, we've all been there, right? And sometimes, we simply give up on the retailer. For me it wasn't apparel, it was pet food. My three cats are fussy eaters. They like three flavors of Fancy Feast cat food. Because there are three, I buy by the case. I spent months (not exaggerating) trying to find a way to get the local pet supply superstore to keep them in stock for me. I finally gave up and now get them from ... yup ... Amazon.com. If this retailer had found a way to get this product into their stores (in my case), I would have been happy to buy there. If they'd done "endless aisle" and shipped to my house, I would have been good with that too.
Instead, I never go there anymore.
So far, the apparel retailer hasn't lost the shopper. If the retailer has something she wants, she'll get it from the stores, just not as often, or as many. The pet supply retailer really did lose me.
This omni-channel thing (or whatever you want to call it) is real, and is table stakes at worst and a profit driver at best. In more official sounding terms, it's a retailer imperative.