Why Are $1B Retailers Leaving $100M on the Table?
The cost of not being commerce-centric, according to just published RIS/EKN research, is 10% in lost revenue. For a billion dollar retailer this is $100 million left on the table. Find out what retailers need to do to recover this lost revenue in the new 2015 Customer Engagement Tech Trends Study, which makes the case that investing in projects that begin and end with the shopper are critical to success.
First, it is important to understand that "omnichannel" is just a useful shorthand term in retail. You can't go anywhere in the retail today without hearing the term, but it is loosely applied and poorly understood. And for that reason…
Forget about Omnichannel, Customer Engagement Is the Goal
Let's define omnichannel and then forget about it to focus on the shopper. Omnichannel is largely synonymous with systems integration and seamless customer experiences.
It consists of taking three big steps that retailers are working on either in sequence or in parallel: 1. Integration or de-channeling of core retail IT systems; 2. Corporate realignment with omnichannel goals that gets the entire company working to deliver a seamless experience to shoppers (which may be the hardest step of all); and 3. Personalization across channels, which is actually omnichannel retailing in action and execution.
According to the First Annual RIS/EKN Customer Engagement Tech Trends Study, which has just published, the cost of not being omnichannel today (see the three steps that define it above) is 10% in lost revenue. For a multi-million dollar retailer this is hundreds of thousands of dollars. For a billion dollar retailer it is $100 million. For every retailer it is a lot of money.
If this weren't reason enough to make omnichannel a priority, here are more reasons taken out of the just-published report, which was written by EKN SVP research and principal analyst, Gaurav Pant:
- Multi-channel shoppers are 23% more profitable than those who shop in a single channel.
- However, 76% of retailers say they can't identify multi-channel shoppers, which means they don't know who their best customers are.
- Only 10% of retailers say they will be omnichannel-ready (See three-part definition above).
- And only 50% of retailers say they will be omnichannel ready in three years, which means there is a huge gap that fast-moving retailers can gain by accelerating their omnichannel plans.
- 75% of retailers will use their stores as delivery hubs for online orders by 2015.
- 58.6% will allow customers to view inventory availability by store using mobile devices in 12 months.
- Only 8% of retailers believe they are better than Amazon using customer analytics.
- Today retailers devote 14.7% of their technology budgets to omnichannel execution. In 2017 it will rise to 22.6%. At some point after 2020 the trend line indicates it will reach 100% and we will forget about channels entirely.
- Today 18% of retailers have a customer experience job title and person in charge of the shopper. This is a big jump from 2% in 2013.