The retail industry is changing rapidly with the rise of e-commerce and shifting towards omnichannel retail. Some of the emerging indicators of its adoption are seamless online and in-store shopping experience and tracking customers across multiple touchpoints. The technology intends to assist retailers in improving customer experience, data collection, sales volume & traffic.
The strategy has backfired for many retailers as a survey says that about 45% of merchants and suppliers have lost more than $1 million in revenue due to their inability to understand the value of cross-channel capabilities.
Retail firms continue to face many significant hurdles as they work toward a successful omnichannel implementation.
Here are some costly mistakes of omnichannel retail and how to overcome it:
1. Inventory management is not optimized
Managing inventory in omnichannel retail is becoming increasingly complex, particularly with new channels and products. Retailers have to ensure that they do not run out of stock while keeping the prices competitive.
The supply-demand mismatch can be highly costly in terms of missed orders and client loss due to sudden product unavailability. Retailers must prioritize inventory management to leverage inventory visibility across channels to the fullest extent possible.
Some great ways to optimize inventory:
A. Seamless integration
The chosen inventory management solution must be compatible with additional software solutions such as channel management, shipping, and accounting for seamless integration to work smoothly. By connecting the inventory software to a centralized system, retailers can view real-time inventory across seamlessly integrated channels.
To ease the complications of retailers there are omnichannel solutions for seamless inventory management. For example, brands using Fynd Platform save the hassle of managing inventory across several marketplaces. The real-time inventory system gives merchants clear visibility into stock levels across all channels, allowing them to generate sales more efficiently. The Fynd Order Management System (OMS) enables retailers to monitor orders according to their current status, such as new, confirmed, packed, and shipped, allowing them to manage the retail business efficiently.
B. True visibility
Retailers miss out on nearly $1 trillion in sales due to stockouts. All inventory data should be located centrally for proper visibility. Automation software can ensure that all data between sales channels are updated in real-time, eliminating the risk of out-of-stock inventory.
2. Keeping online & offline channels siloed
Having superior products is inadequate to retain clients. Retail customers want hands at the product at their own will, time & convenience. It may happen that in-store customers find out-of-stock products in the online store, but are unable to purchase or take product delivery from the store as both the channels are siloed.
In multichannel retailing, often one channel takes priority over the others & receives the fullest attention. However, in omnichannel retailing, ignoring a channel can be a deadly mistake leading to customer engagement, sales, and loyalty loss.
To succeed in omnichannel retailing, merchants must personalize everything, from the look and feel of the online store to the artwork on the walls of the brick-and-mortar stores. To make a major impact on the customer base, online & offline platforms should be combined to provide a seamless shopping experience using emerging AI, AR, QR codes & IoT technologies. The strategy should be channel-agnostic and provide a consistent brand experience across all touchpoints.
Brands often keep a limited stock of some unique products, just for the physical store. But with Fynd omnichannel solutions, retailers can put them up for online sales and expose the product to a massive customer base who may be looking for it on online channels.
3. Failure to unify customer engagement on all channels
There is a massive customer engagement problem in omnichannel retail if there is no unified view of the customers. There may be different channels that still do not talk to each other. Customers expect to get personalized product recommendations based on previous purchases and preferences along with the best offers across channels - all at the same time.
Here is how to improve customer engagement in omnichannel retail:
Integrate in-store & online experience: Sephora, the cosmetics industry behemoth, provides an omnichannel experience that integrates in-store visits and online purchases. Shoppers can use the 'Beauty bag' features to browse for goods and virtually try them on. They can use the app to make purchases or add goods to a wish list.
Make channels work with each other: 82% of customers consult their smartphones when purchasing from a brick & mortar shop. It is not a great customer experience when the app says that the product is available online but unavailable in-store.
REI’s omnichannel aim is to provide consistent, exact, up-to-date, and accurate product information. Internal communication of this kind keeps the clients content, happy, and recurrent.
4. Lagging in implementing cross channel commerce
53% of merchants and suppliers experience a knowledge gap within their organization to understand the value of cross-channel capabilities. Besides, 51% of merchants cannot support mobile commerce, and 80% don't integrate product information management across the web, mobile, applications, and physical stores.
While many surveyed merchants & suppliers struggle with omnichannel experience, they can learn excellent lessons from market leaders & upgrade their eCommerce capabilities:
Migrate to the cloud: 95% of supplier market leaders leverage cloud-based solutions to streamline the online sales process, extend channel support and increase supply chain efficiency.
Invest in cross-channel capabilities: 65% of market leaders have allocated more than 30% of their commerce budget on digital and mobile commerce initiatives. Today, 73% of merchant market leaders can completely implement mobile commerce, about 20% more than market laggards.
5. Inefficient data management
Data is the new oil used by forward-thinking retailers to get a single view of the customers, improve customer experience, forecast sales and revenue accurately.
There is abundant user data in a retail organization but with unclear objectives often leading to confusion & questions:
How to use it? Where to use it? How to handle massive user data? How to utilize & secure user data?
Omnichannel retail strategy gives businesses more opportunities to capture 360-degree data from different platforms and make it convenient for brands to assess customer behaviour, shopping patterns, preferences, & attitudes based on historical customer activity. The data helps curate strategies that assure a personalized customer experience.
Now brands can focus on capturing all available data and use it strategically to strengthen their omnichannel strategy.
Ways to improve data management:
- Identify & fix obsolete, redundant, and incomplete user data
- Develop master data to reduce errors & improve data usability
- Ensure user data is stored in a centralized system for other teams to access
- Establish a unified data management workflow for efficient & effective data management
Numerous retailers are discovering how difficult it may be to implement omnichannel retail the right way. Understanding these challenges might assist them in addressing them effectively.
Have you encountered similar challenges in your omnichannel commerce? Do you have questions on how to resolve challenges and execute efficient omnichannel strategy for your retail business? Connect with the experts.