The term 'omnichannel' has been with us for some considerable time. It was hatched from the older, silo'ed 'multi-channel' concept of Retailers having to contend with more than a single route to the customer. It's been used, abused and generally kicked around and has finally fallen into the category of ordinary, everyday operations. Every Retailer functions in an omnichannel way these days. Or do they?
It seems many are still struggling to do so. Pureplay online operators established business models on customer order fulfilment capabilities from scratch and were able to create (or outsource) profitable distribution and logistics functions from Day 1. More traditional Bricks-and-Mortar players didn't have that luxury and as a result, many are struggling to provide a compelling Customer Experience (CX) which is only adding to their woes of high-street rent and rate increases, online competition and falling revenue/margins/profits. So how will they possibly contend with having to undergo Digital Transformation to simply remain relevant?
The statistics in this BI Intelligence Report are stark. Whilst US-based, the trend is wholly transferable to the European theatre - the profit margin per $100 order for US Apparel Retailers is:
Purchased in-store: 32%
Purchased online - home delivery: 30%
Purchased online, shipped from store: 12%
Given this wide-ranging disparity it behoves Retailers to maintain a focus on the most profitable channel - the one which everyone is predicting the end of: Bricks-and-Mortar...
To do this, it's vital that the Digital Transformation message encompasses strategy, the criticality of data as a rich vein of insight, technical innovation and the continued pursuit of the Customer Experience holy grail: a cohesive, workable O2O strategy to ensure consistency of that experience in-store as well as online. The mixed messages projected by the mish-mash of ill-conceived, poorly-executed omnichannel operations do nothing to help customer retention. On the contrary, they are helping to drive away otherwise previously loyal shoppers.
Have a look at the UK high street...
Bricks-and-mortar retailers must cut delivery times and costs to meet online shoppers’ expectations of free and fast shippin