Cross-channel consistency
The digital and physical selling environments are converging. Whether this phenomenon is called “cross-channel”, “omnichannel”, or given some other label, consumers now routinely use their Internet-enabled (and frequently mobile) devices to find information about potential purchases, even when they are in the store. So as far as consumers are concerned, the selling channels have already converged. As a result, retailers are now forced to catch up.
RSR’s latest benchmark study on cross-channel retailing entitled Omni-Channel 2015: Taking Time, Money, Commitment and Technology, sponsored by hybris, an SAP company, reveals that in just three years, the number of retailers reporting that multichannel customers are significantly more profitable has dropped by 50%.
That’s a staggering statistic implying that consumers now use the digital and physical selling environments in harmony to make a single purchase decision. Consumers don’t see “channels”. For them, it’s “just shopping,” redefined.
The question is, how well do retailers meet the expectations of today’s digitally-enabled consumers?
The influence of the digital channels on store sales is guided by what retailers believe their primary role to be. For example, more than half of apparel retailers believe that the primary role of digital channels is to “sell stuff,” compared to one-quarter of fast moving consumer goods (FMCG) & general merchandise (GM) retailers. Those attitudes influence how retailers present their digital offerings.
Assuming that the original digital channel was the desktop-based e-commerce site, RSR found that in general, European and U.K. respondents have been engaged in multi-channel selling longer. But it appears that U.S. retailers are further advanced in their omni-channel retailing efforts than their peers in the U.K. and Europe.
RSR believes that the very age of their portfolios in rapidly changing times is working to E.U. and U.K. retailers’ disadvantage. They don’t have the flexibility and nimbleness to add features and functions quickly, with a minimum of cost and pain.
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Retailers that did not make the leap to omnichannel, and those who stopped after taking early measures, have been rushing to re-align their organizations, implement new technologies, and generally do what early adopters did: “brute their way” to cross-channel consistency.
Although the degree to which retailers are challenged by consumers’ digitally-enabled shopping behaviors may differ between geographies or verticals, there is no question that all are affected. Whether the approach is to deliver in-aisle information via customer smartphones or content-rich websites that focus on the brand image, retailers now recognize that most roads lead to the store.
In that context, cross-channel convergence becomes the strategy to bring the stores – along with the entire shopping experience – into the 21st century.
When it comes to technologies that enable a consistent cross-channel experience, “customer visibility across channels” is considered the most important enabler - and the hardest goal to achieve. Many non-“Winners” (retailers who consistently outperform industry norms) are ambivalent about consolidating customer information into one place where it can be more easily analyzed.
Winners have no such qualms, and want to do more than simply fill an order. In fact, they seek to understand customers’ omnichannel shopping behaviors so that they can anticipate their needs better, and that means an entirely different view of the role technology can – and most certainly will – play.
Finally, even though retailers have spent time and money focusing on cross-channel fulfillment, the customer experience across channels still remains somewhat fragmented.
Brian Kilcourse is managing partner of RSR Research