Don’t Undermine Omnichannel Efforts With Siloed Solutions

By Gregg Aamoth, CEO and Co-founder, POPcodes — January 06, 2015

Today’s consumers are always connected, interacting with companies using an array of devices and across multiple channels. Consumers’ ability to shop at any time and on any Internet-connected device gives them the freedom to choose when and where to browse.  They can access pricing, inventory, and reviews from multiple sources. They can compare pricing with shipping from multiple online retailers. And many of them do this when they’re walking around in your store.

Omnichannel shopping is the new norm and moving from online to in-store shopping continues to increase in popularity. Many consumers are researching online and purchasing offline, what some in the industry call “webrooming.” While not getting as much attention as “showrooming,” where consumers shop in a store but then buy online, webrooming is actually a much bigger omnichannel trend. In fact, according to AT Kearney, nearly 85 percent of shoppers begin their purchasing process by researching online, and 95 percent actually make their purchase in a physical store. Most shoppers still prefer to bypass the delays, inconvenience, and expenses that come with shipping, opting for the quick satisfaction of in-store pickup.

Benefits of the omnichannel shopping revolution
Retailers reap huge benefits when they invest resources into creating a seamless omnichannel experience for customers. More retailers continue to bridge the gap between online and in-store. By doing so they:

Create in-store traffic that provides the opportunity to sell complementary items;
Improve customer satisfaction through online to in-store pickup models;
Gain insight into who their customers are and what they prefer; and
Reduce costly distribution centers, as well as the cost of shipping to and from those centers.
At a recent investor conference, Terry Lundgren, CEO of Macy’s, had this to say about in-store pickups: “We love this kind of sale, because she already made her decision, she knows where to go in the store, and when she gets there, she almost always buys something else — spending about 125 percent of her intended order. And she doesn’t require a delivery fee.”

Challenges retailers face in an omnichannel environment
Today’s shopper demands a system in which all channels work as one. Her identity and status with the brand must be seamlessly recognized everywhere. This is a huge challenge for retailers with antiquated systems. Many were initially designed for a single channel, either virtual or physical. When e-retailing first began, retailers didn’t know exactly where to fit online sales under their existing retail umbrellas. It was new and unproven, yet was expected to quickly destroy brick-and-mortar businesses. We now know that e-commerce is important and here to stay, but it’s still a small fraction of the total consumer spend. Perhaps what’s most surprising is that several successful pure-play e-retailers now see opening brick-and-mortar locations as key to their survival.

Unfortunately, too many retailers had already mired themselves in a dual silo system and have invested so much, it’s difficult to turn back.  As a result, the online and brick-and-mortar systems are incompatible, out of sync, or require complex and costly integration. 

All of which directly impacts retailers and the consumer through:
A lack of integration in brand synergy, supply chain management, payments, promotions, and customer experience across all channels;
Unintentional online and in-store pricing discrepancies;
Direct competition between two channels;
Limitations in the channels that don’t accept gifts cards and promotions; and
Difficulties in issuing refunds online for in-store returns.
Everyone has something to lose in this model. Online retailers surrender valuable customer data when the purchasing cycle ends in-store. Brick-and-mortar teams are unaware of the consumer’s online behavior and unable to deliver a high-quality in-store customer experience. The consequences of the silo are widespread: Customer loyalty suffers, and ultimately, the entire brand suffers.

Breaking down silos
Retailers need to adopt a solution that integrates all channels in a seamless and uniform system because this is the way people shop today. Customers seamlessly move between a retailer’s online store, brick-and-mortar stores, Twitter and Facebook pages, review websites, advertisements, and email campaigns.

As consumers increasingly expect a streamlined omnichannel experience, retailers cannot afford to have two or more silos. Market share will be won by retailers who possess the right solutions and technology to make the consumer shopping experience easy, enjoyable and satisfying. True omnichannel success is the name of the game, and retailers will only achieve it when every sales avenue – whether online or in a physical store – is part of a streamlined system that eliminates internal competition and integrates all channels.

Gregg Aamoth is the co-founder of POPcodes, a cloud-based retail redemption solution that bridges the gap between the virtual and physical shopping experience.