The March to Omnichannel
By Agile SCS
June 17, 2020 | Ecommerce Fulfillment

The classic shopping trip, going from store to store to comparison shop, has been replaced by going from screen to screen and getting what you want at the click of a key. The days of retailers sending out the yearly 1200 pound catalog with an order form inside have been replaced by multichannel selling options and sanity.

 

Customer Expectations

The customer is king. The customer is always right. These used to be good business practices and mottos to frame and hang on the wall by the cash register, making the customer feel important when they came into the store to purchase. They still are good business practices but now, with technology, they have become amped up.

Customers now have more choices which gives them more control. They shop in stores or on their smartphone, online, on tablets and they now demand instant access to reviews, details, and the best deals that are most relevant to them.

Multi-channel selling has changed the customer’s mindset and made them more demanding than ever. If a customer cannot get what they want the next day or even the same day, they are going to click off your site and never even give your brick and mortar store a second glance.

With the enhanced choices of channels or touchpoints, the chances of your customer loyalty eroding has increased exponentially. How will you grow your business, maintain customer loyalty, and push your brand forward? A lot of that really depends on how you’re selling but more depends on how you preserve your customer relationships.

 

Preserve Your Relationships

two men shaking hands

There are a good number of retailers who view online shopping in this way; they see each new channel, touchpoint, network, and device as simply a revenue opportunity. Which is fine, because, technically, they are.

However, the retailers who lead the pack are the ones who see beyond just revenue and view all the changes as potential relationship strengtheners. Having a presence for more customers on more channels is the chance to grow your customer relationships, better serve them in a multichannel format, and grow brand loyalty.

Revenue is good and retailers are certainly seeking it. However, if the focus is on relationships, the revenue is going to be there.

 

The New Landscape

The customer and their updated expectations present a new list of challenges in the present and, most likely, far into the future of the supply chain. Some of these are:

  • Eroding customer loyalty. Now, you have literally seconds to hold them and it takes only one mistake to lose them.

  • Customer’s changing demand. If you don’t have the ability to react quickly enough to the new landscape, you will lose your customers.

  • Shipping challenges, getting people what they want, where they want it and still being profitable.

  • With all the changing demand, there also comes an increase in inventory costs, if you’re not managing your inventory well.

Now, these problems are not new to the supply chain, but what is new is how they change, seemingly, hour to hour. Customers have always been demanding, have always seen themselves as being right and retailers have always done their best to keep them satisfied.

But now, hurdles have been removed. A customer doesn’t, as we said before, have to go from store to store to compare. They don’t have to wait for a sale to get the best price. And they don’t have to pay exorbitant shipping costs any longer. 

In this new landscape, consistency of going to be a key factor in keeping and building customer loyalty and thereby, increasing revenue. The most successful retailers are the ones who focus on creating consistent customer experiences, no matter which device or channel they use to purchase.

For this reason, retailers are looking at the benefits of single, multi, and omnichannel selling.

 

Single Channel

In the abridged image of the illustration called “The March of Progress”, which depicts a monkey and the changes evolving to an upright, walking modern man, single-channel selling, sad to say, is about the third from the left. No longer a crouching ape, but certainly not a fully upright and evolved man. 

It’s also interesting to note that, using this chart as a metaphor, multichannel selling is not the final image. Keep that in mind.

At this point in our online retail development, the question becomes; is single-channel even a viable route any longer? Most likely not. The days of escaping your cubicle to sell on eBay alone and making a fortune are pretty much over.

There are too many problems with single-channel that don’t make it a truly viable option for the serious retailer any longer. It’s impossible to diversify customer base, you are overly exposed to risk or changes in seller rules. Your account can be suspended for long periods of time where you lose business and money trying to get that straightened out. And it’s much, much harder to grow a business and push a brand when you’re single-channeling.

The thinking is very narrow; “this is one of the biggest marketplaces and this is where my customer base is and I’m going to focus my time, energy, and money only here.”  It shows a refusal to expand beyond the tried and true and, apart from not being able to get what they need when they need it, customers will see that mindset as outdated and they will move on.

Single-channel really only works for legacy shops that offer highly bespoke products and have a long, long history. The ones who have an established brand within a niche market and don’t feel the need to move away from their comfort zones. They have built their relationships with the people they have targeted and that is enough for them.

 

Multichannel

white remote pointed at tv

Multichannel sellers can still have a singular focus on building and strengthening customer relationships, but they don’t have that singular focus of the market.

The multichannel is about selling where the customers are, not selling where you hope they will be. So multichannel sellers establish a presence in the large marketplaces and they also allow for direct, onsite sales.

This is important to note. The multichannel seller is not looking to redirect traffic to the ‘home marketplace’ or website, they are treating each marketplace equally and allowing their products to sell and interact organically with the “local shoppers”, the shoppers on all different markets. When the customer is happy with their experience in a particular marketplace, this is going to inspire them to find out more about your brand and that’s when they go to your website.

Unlike the single market sellers who are happy and successful with staying within the tried and true, multichannel sellers are willing to explore.

Smart multichannel sellers understand the power of connecting mobile with online retail as well as with the brick and mortar shops. As long as you make sure that customers are getting the same experience across multiple channels, you’re customer relationships and thus your revenue should get stronger.

Where it falls apart is the level or the variation of the experience. If the channels are not integrated and information isn’t being shared then a brand can appear siloed. The brick and mortar touchpoint will have its own stock that may differ from the online touchpoint. And items purchased in stores can only be returned to that store or items purchased online cannot be returned in stores.

This degrades the customer’s experience across multiple channels and the poor experience is going to drive customers somewhere else.

Integrating your channels and sharing information constantly is going to give the customer what they want, a seamless experience no matter where they enter the purchasing process.

 

Thinking Omnichannel

Many retailers are already multichannel but the truth is, few are actually omnichannel.

Both involve selling across multiple physical and digital channels however, the key difference is how the customer experience is joined up across those channels. In the previous section we talked about the customer’s experience and now, we see that the experience and the connection between touchpoints, is going to be the difference between multi and omni when it comes to selling.

A traditional multichannel seller may have a brick and mortar shop and a website. But, you’ll find that these two channels are usually very siloed and have little communication between them. As we pointed out before, the stock in one touchpoint may not be the same as in another. Return policies may differ and return locales may differ as well.

In a customer’s mind, the brand is NOT siloed. They believe, and rightly so really, that one touchpoint is the same as the rest. They may have different interactions with different associates on different points along their purchasing journey, but they don’t want the experience to feel different with every new touchpoint.

For a true omnichannel experience, a customer expects to interact with the brand in online market places and retailers, big box stores, or directly with the company either online or in-person and have the experience, the merchandise, the return policy, and all other interactions unified across the board.

If during the customer’s journey, they are forced to switch channels to get something they want or they have to start over again when they enter a new channel, they will become frustrated and this is going to have a very negative impact on the customer experience. Again, it’s not just about a loss of sales, it’s about the loss of a customer relationship. 

Remember what we said at the beginning; retailers who focus on the revenue will always lag behind those that focus on the relationship.

So, what we see here is that the main difference between multichannel selling and omnichannel selling is the joining of all touchpoints together so that whatever journey to purchase your customer takes, the entire experience is consistent and unified.

 

Getting to Omnichannel

Some retailers have elements of omnichannel setup, like click and collect or reserve in-store options. Some even have an “endless aisle” option that allows customers to make purchases of items that are available online but not in-store. 

Also, they are making stock that is available in-store available online as well. These are great addendums to the regular multichannel experience. But is it true omnichannel selling?

There are a few difficulties with implementing an omnichannel system and those are cost and complexity.

An established retailer is likely to already have a legacy in-store point of sale (POS) system that has been highly customized to their needs. Changing that involves time, money, and everyone in the company, from the top down, being onboard.

Likewise, their order management system and ERP are likely to be bespoke and deeply integrated into their internal business systems.

A change to true omnichannel is going to require a significant investment in technology and business change. Some retailers will need to find a more versatile, knowledgeable, and up to date SCM company.

 

Culture Changes

two men talking about golf clubs

Apart from the financial burden of making a company fully omnichannel, retailers will have to face a few cultural problems as well. For the switch over to being truly omnichannel to work, every single member of the company has to embrace and adopt the new rules. And this is where culture shock can happen.

In-store staff are likely to see the online, the digital business, as a completely separate entity and therefore, view them as competition. The in-store staff will get a commission from selling goods in-store so they will have little incentive to encourage customers to purchase online.

A retailer can overcome this obstacle by unifying and synchronizing technology. This is going to stop the company feeling so siloed and help staff to see the unity of the entire operation.

Retailers can make sure that the technology they employ allows them to track and log in-store interactions with customers who ultimately make their purchase online.

This works well for big-ticket items like furnishings. A customer purchasing a sofa or dining room set may have multiple interactions with multiple people across several touchpoints; in-store, online, on the phone, or even on the website via live chat. If all this data is tracked, logged, and joined together, retailers could create an incentive plan that rewards a staff member for a sale no matter where the purchase is placed.

This is going to cut down on any cultural problems and make the staff feel less siloed. Also, it will give the customer the feeling that every touchpoint along the way is fully connected and their purchase experience is seamless.

This is an important step toward moving from multichannel to true omnichannel selling.

 

Not for EVERYONE

Just a caution here. There is a tendency in business to grab onto the new, brightest thing and make it work for the company. Although omnichannel may appear as the golden egg, it’s important to know that it may not be for everyone and every business.

There is going to be a cost with switching any company over to omnichannel and it would be wise to think carefully and talk with people to be sure that the cost is going to be advantageous for your business.

If things are running well now and you’re working on a multi or even single-channel system, the old adage of if it ain’t broke, don’t fix it, may be applicable. Don’t buy into the hype and don’t commit funds that may not pay off in the long run.

 

The Future

In the single-channel section of this piece, we talked about the image of The March of Progress and we mentioned that, in the metaphor, multichannel selling is not the final image. What we will evolve to, and what retailers must have their eyes on, is the progress to true omnichannel selling.

With adjustments in technology happening so quickly, to stay ahead of the curve and keep the strongest customer relationships you can, switching your company over to true omnichannel is going to be the only way to thrive and move forward with your brand and your business.

With good omnichannel selling, you have a better chance of unifying the customer experience and building stronger relationships. Again, that’s the focus of the most successful companies, relationships that last and lead to fostering other relationships.