Omnichannel Retailing: A vision of utopia or a realistic proposition?
Posted on behalf of : Atanu Nath
In an era driven by the digital revolution, the concept of omnichannel retailing is becoming increasingly relevant. Not very long ago, the idea of ubiquitous presence across all available shopping channels would seem far-fetched & difficult to envision strategically & implement operationally. However, with the increasing proliferation of the internet, both in developed & developing economies, omnichannel retailing no longer seems a utopic proposition but more of a reality.
There are various changes, which we are witness to lately, that necessitate the adoption of an approach aligned towards e-commerce. A few interesting changes are as follows:
On-line vs. In-line: On-line retailing has ushered in new dimensions of convenience & simplicity of transactions. A customer can browse through a plethora of choices available, and at the same time validate whether his need will be adequately met by the purchase that he is about to make, courtesy of reviews & endorsements. There is a flip side created by the absence of instant gratification or ownership however the fact that he no longer needs to be in-line (brick-and-mortar stores) and can complete the activity from the comforts of his home is a big win proposition.
Mobility & Apps: We are now part of an app driven world characterized by "true" mobility & sophistication which have revolutionized how a purchase decision or a purchase event happens. There are many retailers who now provide gift coupons in a QR code format for a specific amount of in-store purchase. These coupons can be scanned onto a mobile device & redeemed via a mobile app on the online store. Now when such offerings are coupled with access to exclusive merchandise, sometimes targeted for specific customer groups, it creates incentive enough for the buyers to indulge in a never ending cycle of repeat purchases in-store & subsequently on-line.
The Power of Social: It is widely believed that most of the buying decisions today are being completed before actual engagement with a retailer. The need evaluation to decision making cycle is being strongly fed by information available in the social media. Peer endorsements & discussions in known social circles are playing the role of opinion makers. e-influence, as it is popularly known, is changing the dynamics of consumer purchasing in the retail space.
Disruptive Technologies: The arrival of a number of new technology capabilities in recent times has resulted in unsettling changes to how "value" customers are identified, communicated with & finally serviced. Big-data analytics for e.g. will allow retailers to create customer segments based on well structured & actionable business rules. This in turn will ensure the delivery of highly personalized communications to the target group addressing their core need & thus eliciting a more favorable response towards the retailer.
Notwithstanding the obvious impact that e-commerce can bring into a retailer's business, it is always important to tread with caution while embracing new channels of distribution. A retailer needs to make a careful assessment of his offerings portfolio & evaluate the best channel fit. For e.g. products that are bought often & consumed routinely may not be an immediate choice to be sold online. Staples, as they are more commonly referred to, offer minimal or nil differentiation and usually compete on the price factor alone. Hence it might make more sense to leverage the in-store channel option for such cases.
In addition, there needs to be a close examination of whether the choice of channel is in alignment with the overall organizational vision & business goals. More importantly, if the organization is equipped & sufficiently enabled to deliver over the chosen channel. A simple encapsulation of the discussion is, in order to achieve long term profitability & be the preferred choice of the consumer; channel selection is a key strategic decision for any retailer. Having said that, the power of digitization & mobility can't simply be overlooked in today's age.