What is Omnichannel Retail?Charlie Hankers | May 4th 2017
For the best part of 20 years online marketers and eCommerce developers have been encouraging consumers to shop online as if their careers depended up on it. Town centre shops, with their attendant overheads, were obsolete nods to a bygone age when there was no alternative but to take your physical self through the doors and swap your paper and metal tokens for products.
But these super marketers have only half succeeded in luring customers away from the supermarkets. Yes, retailers report reduced footfalls seemingly every year, and online retail can claim to be the largest causal factor, but have you tried finding a parking space in a city centre, shopping mall or out of town retail park on a Saturday afternoon recently? Unless you believe they’re full of window shoppers and showroomers, you’ll probably concede that people actually like shopping. In shops.
British Home Stores was in the news last week after the distressing announcement that it would go into receivership, putting 11,000 staff and their pension pots at risk. Predictably, many commentators are asking whether this is evidence that the old way of doing things is dying and attempts to revive it are futile. There have also been plenty of vox pops on the street, with reporters asking selected passers-by the question that they already knew the answer to – “Do you shop at BHS?” – and receiving the same shrug of the shoulders and maybe a comment about their mum buying a nightie from there in 1998 that she still wears. While the company’s ex-owner might be laughing all the way to Monaco, ultimately it had huge amounts of floor space in prime locations selling things that nobody really wanted to buy, at least for the asking price.
But it’s too early to write off the town centre as a whole and blaming its demise on the internet. Shopping in the town and the city has draws that online will always struggle to emulate or replace. You can hold, feel, try, sample and stroke your potential purchases. You can buy them straight away without waiting for delivery – or having to take a day off work to receive them. You can take in a coffee, a glass of wine, a movie or an exhibition while you’re downtown. You can ask an assistant for advice. You can make complaints to a human being and return unwanted goods for an instant refund or exchange. You can meet friends and share the experience. There’s nobody tracking your every move.
Despite a regular stream of reports suggesting street retail is still suffering, swanky shopping areas are still being built all over the world, and private and public bodies are throwing billions at building new malls and regenerating tired town centres. Apart from a few upstart startups that have thrived – the Amazons, Netflixes, eBays, Laterooms and Asoses of the world – the high street name still brings with it kudos, credibility and familiarity that make it difficult for other upstarts to trickle through. Name me a web developer who wouldn’t want an M&S or a Sainsbury’s in its portfolio.
So taken together, the pros and cons of online and downtown shopping balance out. People want the convenience of home shopping, but most of all they want the option to shop how the hell they like. And that’s why the scene is set for the omnichannel retail revolution.
Is omnichannel just a buzzword?
“Omnichannel” has all the hallmarks of a buzzword. It prefaces something marketers and retailers understand – the sales channel – with something that suggests an all-seeing, all-knowing entity influencing it. It sounds too perfect.
And if anything, omnichannel’s buzzword credentials might be confirmed by its sinking into oblivion through omnipresence, along with the information superhighway and electronic mail. In other words, omnichannel marketing will simply be called marketing, because that’s how retailers will do it.
In defining omnichannel, it’s good to start with its parent, “multi-channel”, last seen dad-dancing the night away in a suburban outlet. Multi-channel is a bricks-and-mortar store with a bell on the door reckoning it also has to have a website and getting one built to extent its brand. Importantly for the definition, however, it’s not particularly connected to the shop, and as such a whole separate marketing effort needs to be put into promoting it as it’s reaching two separate audiences. It is leveraging neither its familiar name nor its online presence to get footfall or full shopping carts in both domains.
But once the realisation dawns that things would be much better if the customers were put at the centre of the equation, and if the whole operation was set up to make their shopping experience simpler, the retailer is on the path to omniscience – and an omnichannel mindset will follow.
What omnichannel isn’t
Omnichannel is often simplified to mean a unified appearance across all customer touch-points – responsive sites, everything branded the same and the corporate message being consistent throughout the sales journey. But this is a characteristic of omnichannel rather than the concept itself. Going omnichannel involves making the online and the offline shopping experience a whole, rather than a fragmented, experience.
A living example
Here’s another example of an omni characteristic: clothing store Gant has implemented a service whereby customers who are browsing their store online can check whether a garment they’re interested in is available in a chosen store. As a retailer you’ll understand the challenge behind this concept: each individual store’s stock must be shared in real time to the single website (as each store doesn’t have its own site) and if a purchase is made or a delivery arrives the site’s database must be updated. A customer being told there’s a size M sweater instore and making a special trip into town to buy it won’t be happy if the store has none in stock when they get there.
The concept above bears a resemblance in principle to the “click and collect” system used by Tesco, John Lewis and others, the only difference being that stock of an individual size of a garment is probably numbered in the single digits rather than the dozens in a mid-range fashion outlet. But click and collect is not of itself omnichannel.
Click and Neglect
A leading technology retailer, for example, sells its products at two different prices: one for online customers and one for in-store customers – the latter of which will invariably be considerably higher. To complicate matters, the click and collect experience often sells goods at the online price even if they are being reserved and physically paid for in-store. Staff have been known to whisper to customers presenting at the checkout that they could save thirty quid by going outside, ordering the item on their phones then walking back in and buying it from the collection counter.
This shakes the company’s omnichannel credentials to the core, as it is not treating the offline and the online as a seamless, consistent entity. It’s as if it’s two different companies operating under the same name. Displaying items on shelves, renting floor space and employing staff may indeed incur overheads that a website, a warehouse and a delivery guy don’t, but that shouldn’t be the customer’s problem.
It’s no mystery why a company would offer its products at a more competitive price online; customers can compare prices on identical items, and unless they have extraordinary loyalty to one brand (which isn’t something that can be ignored), they’re going to go with the one that’s cheaper – and if they want it right away they might pop instore to pick it up. Instore customers are more of a captive audience and with retail outlets always mysteriously devoid of 3G and 4G coverage, they’re less well equipped to compare prices. And, it has to be said, if people are ignorant of the fact that the same items could be bought cheaper by stepping outside, the store can argue that they are not obliged to tell them.
It would seem probable that as retailers truly embrace omnichannel commerce, examples of such jiggery-pokery will become harder to find. As the power of review sites and social media continues to grow for consumers, the trust brands earn from consumers can be affected in a measurable way, and subliminal negative points accumulate and matter. But also, it’s probably simpler and more efficient to have a single set of prices across all channels than to get sales staff to go through the theatrics of “looking for a better deal for you” when a customer challenges them on price. Consumers will start to expect prices to be consistent across all channels and will start to do their online research with that assumption in mind.
Omnichannel retail = retail
Omnichannel retail is being facilitated by enhanced technology and connectivity, and that’s a one-way street. But in essence it’s not a technology, it’s a philosophy, an acceptance that your retail business is a single thing whether it’s based on a high street, online, both or inhabiting the next domain to come along.
Instead of seeking to compartmentalise your retail business, you should be looking for ways to break down the walls, smooth the paths between the online and the retail space, and let each element benefit from the other.