It's Simply 'Retail'
The O-word is over-used in the retail industry. The question is not whether brick-and-mortar retailers of the future need to be omnichannel. The question is will there be another kind? For the ideas central to the concept of omnichannel retailing to take hold, we must hasten change in the idea of retailing itself such that this preceding adjective is rendered superfluous.
Smartphones have given consumers great dexterity by combining e-commerce, social media and native mobility (location sensitivity, device features, app features) into a powerful, portable customer channel. Though consumers may not attach specific value or roles to channels, they move between them with ease and without warning. The consumer can buy from a competitor’s website while standing in the store. Are retailers equipped to build a truly rewarding and bi-directional relationship with such a consumer?
In EKN’s view, the tenets of retail haven’t changed: merchandise based on customer needs and preferences, be equipped to fulfill customer demand, make shopping an experience for the customer, engage with customers at a personal level, and reward them for loyalty.
What has changed are the capabilities retailers need in order to excel at each. Retailers’ organizational structure, systems, processes and culture are designed to sell products and are optimized for channel efficiency. The need to be customer centric is a challenge, and retailers need nothing short of a revolution to achieve this vision.
For instance, most retailers’ inventory systems are not integrated tightly enough to be able to maximize demand fulfillment. A retailer’s website may show a product as being out of stock while unsold inventory sits on a shelf or the backroom of one of the stores.
Now, imagine scaling such transformational initiatives to all areas of retail. Few retailers have the organizational alignment and investment appetite to realize the Utopian vision of the omnichannel retailer that occupies industry airwaves.
What is more likely is that individual retailers will focus energy on a few key areas to begin with, and even with a revolution brewing internally, gradually evolve into the type of retailer able to engage consumers across channels.
In EKN’s view, there are three critical enablers retailers will need to accelerate transformation:
Gaurav Pant is research director and Girijesh Agarwal is director of communities, both for EKN, a peer-driven, practitioner-reviewed approach to research and community.
Smartphones have given consumers great dexterity by combining e-commerce, social media and native mobility (location sensitivity, device features, app features) into a powerful, portable customer channel. Though consumers may not attach specific value or roles to channels, they move between them with ease and without warning. The consumer can buy from a competitor’s website while standing in the store. Are retailers equipped to build a truly rewarding and bi-directional relationship with such a consumer?
In EKN’s view, the tenets of retail haven’t changed: merchandise based on customer needs and preferences, be equipped to fulfill customer demand, make shopping an experience for the customer, engage with customers at a personal level, and reward them for loyalty.
What has changed are the capabilities retailers need in order to excel at each. Retailers’ organizational structure, systems, processes and culture are designed to sell products and are optimized for channel efficiency. The need to be customer centric is a challenge, and retailers need nothing short of a revolution to achieve this vision.
For instance, most retailers’ inventory systems are not integrated tightly enough to be able to maximize demand fulfillment. A retailer’s website may show a product as being out of stock while unsold inventory sits on a shelf or the backroom of one of the stores.
Now, imagine scaling such transformational initiatives to all areas of retail. Few retailers have the organizational alignment and investment appetite to realize the Utopian vision of the omnichannel retailer that occupies industry airwaves.
What is more likely is that individual retailers will focus energy on a few key areas to begin with, and even with a revolution brewing internally, gradually evolve into the type of retailer able to engage consumers across channels.
In EKN’s view, there are three critical enablers retailers will need to accelerate transformation:
- Organizational structure: The retailer can’t be customer-centric if its organizational structure and processes are product or channel centric.
- Customer analytics: When brick-and-mortar retailers combine human intuition with deep customer insight, they will have created a differentiator against online-only retailers who lack personal and physical access to customers and the richness of POS data.
- Technology and order platform: Three areas of technology integration retailers must focus on are customer, inventory and commerce systems.
Gaurav Pant is research director and Girijesh Agarwal is director of communities, both for EKN, a peer-driven, practitioner-reviewed approach to research and community.