The Long Road to Profitable Retail through Omni-Channel Marketing
Retailers overwhelmingly believe that shoppers who connect via multiple selling channels are more profitable than shoppers who buy in single channels.
This is a major finding by Retail Systems Research in a study called Omni-Channel 2013: The Long Road to Adoption.
47% of retailers indicate that multi-channel customers are significantly more profitable than single channel customers – a rise from 38% in 2012 and a sharp rise from 28% in 2009. 29% of retailers indicate that multi-channel retailers are slightly more profitable.
Retailers have responded to this pursuit of omni-channel shoppers. Retailers now employ more cross channel activities than ever. For example, retailers are currently using the following activities:
- Buy online/return in-store 71%
- Buy in-store/fulfill through online or direct 68%
- Buy online/direct and pick-up in-store 64%
- Buy online/direct and fulfill through any store 45%
- Buy via social commerce site 23%
- Buy via TV 7%
With 66% of retailers voicing the desirability of the multi-channel shopper, the path to retail profitability would seem to be nearing reality. But the path to omni-channel success is far from clear or certain.
So what are the issues?
Retailers indicate their biggest challenge remains merging the digital and physical retail worlds into an easily understood and executed system.
No consensus has emerged among retailers on what is the primary role of digital. Most retailers continue to feel their way along, as they test and experiment their way towards the ‘right ‘approach to utilizing digital in their retail environment.
Retailers also overwhelmingly see the need to create a consistent customer experience. But 54% of retailers indicate they do not have a consistent and singularly coherent view of their customers.
This lack of a coherent view creates problems in knowing what methods and means to reach shoppers. The need to discover meaningful customer and shopper insights remains an unfulfilled promise for many retailers, and a matter of trial and experimentation.
Retailers have spent the majority of their recent efforts on the “sell” side of the equation – how to sell more product in more ways. But this “sell” emphasis has raised a key question – do retailers truly understand the “buy” side of the equation?
Retailers are slowly moving from the perspective of “selling more stuff” to one of providing consumers “everything they need to know to buy” products and services. But much remains to be learned.
Retailers are also increasingly focused on fulfillment execution. Omni-channel fulfillment was rated ‘very important’ by 75% of respondents – a 27% increase from 2012. 80% indicate that inventory visibility across the organization is ‘very important.’ However, many retailers are struggling to achieve the needed visibility across departments and channels required for successful omni-channel execution.
Mobile is also a concern. Retailers willingly acknowledge the importance of mobile, as evidenced by the growth in mobile in retail. Retailers favor mobile-optimized web access as part of their e-commerce capabilities. However, retailers are less optimistic about their ability to manage complex mobile applications – particularly those that include geo-location based applications.
Amidst these challenges, the study recommends that retailers can stay focused on the Total Customer Experience by doing three things:
- Start by designing the Brand Experience across all channels
- Determine the role of digital in the total experience
- Align the organization to the Brand, not the channels.
The blending of digital and the physical has just begun. Retailers must continue to understand their customers’ increasingly complex paths-to-purchase in order to develop systems that are easily understood and executed.
Click on the following link to download a copy of the full report “Omni-Channel 2013: The Long Road to Adoption”. The report is free but you will need to register prior to downloading.