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Retail Online Integration
by Mark Treschl

The arrival of omnichannel has the retail industry drawing new battle lines in the sand. Pundits predicted e-commerce would eventually crush brick-and-mortar, with Amazon.com as the big gun and other popular pure-plays falling in line behind. Omnichannel commerce is retail’s direct answer to the Amazon era. If traditional retailers can leverage their core strength — their brick-and-mortar stores — and master the integrated online and offline experience, they may indeed have the upper hand. 

Wal-Mart is the current poster child for the omnichannel movement, and its recent sales reports offer a glimpse into its potential to outpace Amazon. The mega retailer recently announced that its global e-commerce sales were up approximately 27 percent in the company’s fiscal first quarterOpens in a new window. Compare that to Amazon, which only saw a 23 percent increase for the same period.

There’s little dispute that omnichannel is the evolution of commerce and the brightest path to continued growth, but not every omnichannel retailer will enjoy the same level of success. Some have shot ahead of the pack and are quickly executing against their master plan, while others are making the wrong moves or moving much too slow.

Disrupt or Be Disrupted
To really understand where the industry stands and needs to go, we must first assess the current situation. There’s a theory in biology called punctuated equilibrium that, in general terms, says the evolution of a species proceeds with long periods of relative stability that are punctuated with rapid bursts of change. It’s not a jump to draw parallels to what’s taking place with omnichannel. Retailers that are responding to this fundamental shift and connecting every piece of their business will be the survivors in the new omnichannel world, while those that are complacent in their actions or old school in their thinking will inevitably fail.

True vs. Wannabe Omni  
True and “wannabe” omnis are already carving out their place in retail’s future, and it’s a given that only one camp will win. Although definitions vary, I characterize true omnichannel retailers as those offering these five fulfillment types: ship to store, buy online and pick up in-store, ship from store, buy online and return in-store, and buy in-store and ship to home. They may not have every single one of these mechanisms in place today, but they at least have three of the five and plans to execute on the others.

Wannabe omnis, on the other hand, have an e-commerce presence and may have implemented one of the next-generation fulfillment methods, but are widely missing the mark in using the store as an asset to grow their performance online and offline. Many are being pulled kicking and screaming into the new omnichannel era, and their trepidation is causing them to fall behind as their more progressive cousins grow stronger. For every Staples that succeeds, there will be an OfficeMax that succumbs.

Comparing and Contrasting
Fulfillment is one of the largest pieces of the omnichannel equation, but it doesn’t stand alone in differentiating the true players and the wannabes. Retailers must also excel in delivering a consistent and exceptional consumer experience where every channel is connected, customer service is informed and delightful, and their brand is cohesively presented.

Let’s drill down a little further into the operational and strategic attributes that define these two camps.

Fulfillment: The physical collection of goods is one of the most vital parts of the omnichannel retail experience. Shoppers want to order and receive merchandise through the channel(s) of their choice, which requires specialized supply chain operations that connect all of the inventory data and make it visible to customers and sales associates alike. The logistical challenges are immense.

True omnis like Wal-Mart are well on their way, offering several of the prevalent fulfillment methods, as well as implementing the technology to support this new breed of supply chain. Wal-Mart is filling and shipping orders from stores, offering in-store pickup and investing millions in its distributed order management platformOpens in a new window. Macy’s is also fulfilling orders in multiple ways, and has turned 500 of its 840 stores into additional shipping facilitiesOpens in a new window.

Wannabe omnis are far behind on the technology and integration curve. They’ve failed to invest or act early, and lack a strategy to recast their stores to account for all of the new customer touchpoints and technologies. Whether they’re resistant to change or unsure where to begin, their inertia is already costing them.

Customer experience: Omnichannel requires the delivery of an omniscient customer experience. Consumers want to start their shopping experience in one channel and continue it in another, and they expect customer service to offer the same continuity. True omnis are enabling a universal customer experience by integrating all of their customer intelligence data and making it available to the customer and sales team. Sales associates can access a shopper’s purchase history on a tablet, tailor their interaction based on the shopper’s recent actions in other channels, and walk them through all available product options on an in-store kiosk.

True omnis are also training their associates in customer experience because they realize that highly informed and highly personalized sales staff is their key advantage over online competitors. Macy’s, for example, has created a chief omnichannel position and introduced a training program called Magic SellingOpens in a new window strategies to help associates better serve the more educated shopper.

In contrast, wannabe omnis use legacy service models and technologies that make it difficult for associates to engage with demanding customers and meet their expectations. They’re unable to personalize their interactions because customer data is siloed across the organization. And because wannabe omnis don’t have inventory information readily available, their frustrated shoppers are defecting to nearby stores to find what they want.

Branding: Retailers can’t afford to let any moment of their customer brand experience be less than consistent, cohesive and reliable. Customers will be quick to recognize the disconnect if a retailer offers a killer store experience but a lame web experience, and vice versa. True omnis are passionate and unfailing in their approach to branding across every channel. Their digital presence — whether it’s their website, Facebook page, mobile app, etc. — radiates the same design and feel as their physical stores. The level of creative execution that they put into the lighting, music, layout and mood of its stores is also translated online. From product reviews to cool content, true omnis are creating experiences online that are on par with some of the hottest and most innovative e-commerce companies.

On the flipside, wannabe omnis believe that simply matching colors and content is enough to comprise a unified branding strategy. Their websites come off as an afterthought and something they felt obligated to do, rather than a part of their brand that they genuinely love and cultivate. Because their branding is fragmented and impersonal, wannabe omnis are jeopardizing their customer loyalty and failing to position themselves for long-term success.

And the Winner is … 
As we sprint into the omnichannel era, some will be left behind and some will emerge as a new breed of retailers that are as strong as Amazon. Those that invest in their infrastructure and talent, and have the conviction to deliver a true omni experience will be victorious. Will it be Wal-Mart, Macy’s, Gap? The race is neck-in-neck, but one thing is for sure: it will be really fun to watch.

Mark Treschl is the president and CTO of OpinionLabOpens in a new window, a provider of omnichannel voice-of-customer feedback solutions.

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