Old Channels Never Die

If history has taught us anything, it's that the importance of channel development and integration can't be underestimated. While many experts have suggested the impending doom of non-digital retail, one need only look at a month's worth of direct mail catalogs and the percentage of sales taking place in-store at the POS to be reminded that old channels don't die—they're simply modified to complement new ones and to satisfy today's shoppers.
Therefore, an omnichannel strategy isn't predicated on a question of which channel. Progressive omnichannel retailers don't ask that question—they let the customer decide, and then they determine how to best accommodate customer preferences. As mobile technology adoption continues to fuel double-digit growth in digital channels, competitive differentiation won't be determined by which channels retailers operate in, but by how well those channels are connected.
The consumer expectation of an omnichannel retailer is that ordering, fulfillment and returns should be enabled freely and that any step of the process should be executable in the channel of their choice. Merchandise advertised in stores should be available for purchase online. It should be fulfilled at the shopper's discretion—to a store, to their home, to their workplace. That merchandise should be returnable to a store, or via parcel post. To the consumer, none of this should be cumbersome.
Meeting consumer expectations requires process communication between department and channel-specific associates, channel systems connectivity to enable access to real-time and accurate inventory data, and cross-channel visibility of the customer. In a single-platform, cross-channel commerce environment, everyone in the company must have access to the same data—a single version of the truth.
That's a tall order in a legacy systems environment. The omnichannel journey starts with the recognition that, to remain competitive, some things will have to change, such as:
  • Instead of focusing on the product and how it moves in each channel, focus on the customer's demand for, and interaction with, that product across every sales channel.
  • Instead of pushing merchandise on shoppers, pay attention to what merchandise they're pulling from and where.
  • Instead of populating the Sunday circular and watching what sells, present personal and highly targeted promotions to segmented populations of shoppers.
  • Instead of worrying about one channel cannibalizing the next and who gets credit for the sale, create a corporate culture that celebrates the increased sales activity that can be generated when an omnichannel reality is achieved.
In summary, rather than running several sales and distribution channels in siloes, manage a single, yet multi-touch channel—an omnichannel—connecting every customer interaction that happens therein from one central location.
If all this sounds easier said than done, it's because to date, it's not been easily done at all. Today, however, integrated commerce technology is making these changes much more achievable than in the past, and the greatest benefits are being realized by the earliest adopters.
Branden Jenkins is the General Manager of Etail/Retail products for NetSuite.
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