Why is Omnichannel Retail so Hard?
The retail industry has been evolving rapidly to keep up with new technology and consumer patterns. While the chief concern previously was about how traditional retailers could prevent the loss of market share to online retailers, now all retailers compete on all fronts in an omnichannel setting. In brief, omnichannel retail is about creating one cohesive retail environment across many different physical and online platforms; recognizing it may require multiple touch points from initial consumer exposure to eventual purchase; and offering an individually-tailored and consistent user experience.
While we have previously blogged about the benefits of omnichannel, creating a successful omnichannel environment is a complex process that requires targeted investments to ensure all platforms function smoothly with each other. For a successful online presence, retailers must understand how to use social media, mobile, computer and other technologies, all of which must be fully integrated with legacy environments. In stores, employees must be trained to operate in a sophisticated environment where consumers expect seamless integration between browsing in stores and shopping on their phones and other devices.
Retailers face many challenges in playing in this complex environment. Without a coherent strategy, dealing simultaneously with warehouses and shipping, increased IT and security infrastructure, research and analytics, and brick and mortar stores can lead to disorganization and decreased margins. Underperformance in one area affects all other areas. For higher end retailers, any inconsistency in consumer experience, such as price discrepancies caused by currency fluctuations or tariffs and disjointed back-end operations may tarnish the exclusivity of the brand reputation. In an omnichannel environment, it is important to have integrated brand control that keeps the brand messaging, pricing and shopping experience the same across all platforms and locations.
In such an interconnected space where consumers make purchases after several rounds of engagement, it is difficult to pinpoint cause and effect and, therefore, which investments are worthwhile. That is why the effective use of data analytics and detailed customer tracking mechanisms are crucial for a successful omnichannel strategy. Moreover, consumers also want consistent personalization across all platforms. Tracking consumers across channels helps in both these areas and also creates significant new market opportunities by giving consumers product suggestions based on their past purchases or browsing history, reminding consumers about shopping cart items, and turning loyal consumers into brand representatives via social media engagement. There is no doubt that omnichannel retail is ripe for experimentation and will only become more sophisticated. While challenging, successful omnichannel retail offers many more possibilities for engaging with and selling to consumers.