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Retailers Strive To Complete The Channel Challenge

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All-channel retailing is essential for surviving and thriving in today’s vacillating retail environment.

As consumer behavior, spending and demographic profiles continue to change rapidly, “it is absolutely critical that companies take an omnichannel approach to engage consumers,” said Mark Larson, Global Retail Leader for KPMG. This process requires retailers to utilize “all the platforms at their disposal, including brick and mortar, online and mobile.” 

Successful retailers “put the needs of their customers first,” Aberdeen Group noted in a report, titled: Omni-Channel Retailing 2013. This customer-centric approach requires retailers to ensure product availability across channels, which demands “the sharing of real-time order, fulfillment and product information across channels and departments.” Increased collaboration and visibility allow retailers to satisfy an “‘anytime, anywhere’ retail philosophy, and … break down the siloed nature of traditional retail operations.” This strategy helps lead to “higher customer satisfaction scores, increased average basket size and increased revenue.”

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As retailers pursue enhanced collaboration, visibility and customer-first dedication, many are implementing new tactics that advance their omnichannel positioning. For example, Best Buy Canada, Saks Fifth Avenue and Newegg are entrenched in strategies such as dedicated in-store multichannel customer service; mobile POS; flexible buy/pick up/delivery models; and sophisticated pop-up venues.

Best Buy Canada Engages “Reserve And Pick-Up” And Mobile POS

At Best Buy Canada, several multichannel efforts are “leading to an increasingly seamless experience for our customers,” said Robert Pearson, VP of E-Commerce for the consumer technology retailer, in an interview with Retail TouchPoints. Among them is the retailer’s newly re-launched Reserve and Pick-Up program, which grew “from 10% to 50% of our direct-to-store pickup orders, while corresponding customer satisfaction scores rose by 15%. We see the brick-and-mortar channel as a tremendous asset now and in the future. Training our associates to support the multichannel consumer and having a destination at the front of the store with dedicated multichannel associates available to facilitate the experience for our multichannel customers have changed the dynamic of our in-store experience.”

Best Buy Canada, which operates more than 70 stores, also embarked this year on an mPOS initiative that is “an important piece of our multichannel experience,” Pearson reported. The retailer is implementing up to 25 mobile devices per store, including smartphones for line-busting and grab-and-go items, and tablets for full-service departments. In addition to enhancing customer service, the mobile technologies provide store associates with access to key departmental information and a variety of tools to encourage seamless product comparisons, as reported by Retail TouchPoints. The devices also offer a price analysis function that helps associates verify that customers are getting the best price for selected items. The retailer plans to bring the mPOS strategy to other retail models such as mall kiosks and Best Buy Mobile stores.

“Mobile POS is just one part of our multichannel offering that allows for a flawless experience, in-store and online, supported by an expanding network of fulfillment locations,” said Pearson. “Our focus is on creating a seamless shopping experience for our customers and we have invested in building out both our multichannel and fulfillment capabilities to support this vision.”  

Saks Invests In One View Of The Omni-Retail Enterprise

Saks Fifth Avenue has made “some pretty significant changes” in order to deliver “a single view of the omni-retail enterprise on a modern and nimble technology platform,” said Mike Rodgers, CIO of Saks Fifth Avenue, at an Oracle user conference in June 2013. “We’re looking at a single view of everything so we can offer customers an omnichannel view.”

The iconic retailer now is leveraging the single view of inventory to enable a buy online/ship from store capability. Since Saks doesn’t carry the same homogenous inventory online as in stores, said Rodgers, buy online/ship from store “allows us to get the merchandise that was purchased for full-line stores only up on [the online site] to leverage that inventory. This has been a big success for us and it is driving higher sales, better inventory productivity and gross margin.”

Saks customers want to buy as well as return from any channel they want, Rodgers explained. “Our best customers shop across all channels and all devices, with mobile by far the fastest growing device.” In the last half of 2012, Saks saw “a dramatic shift in customer behavior to more online activity.” Today more than 50% of top-tier Saks customers are omnichannel consumers.

Smartphone showrooming ? 41% of Saks consumers use their phones while shopping in stores ? is “influencing everything from media consumption all the way through the entire supply chain,” noted Rodgers. In addition, “60% of our customers are on social media each day. It’s an enormous game changer.”

Looking ahead at the digital impact during 2014, “we estimate that 53% of all sales will be informed or actually purchased online,” Rodgers stated. “But here’s why brick-and-mortar is not going away: When we send out an email and generate one dollar in sales [online], it generates five dollars in store. [That email] is much more effective for the store than it is online.”

This finding caused Saks to “rethink everything, including our organization,” according to Rodgers. “When we built Saks dot-com 13 years ago, we intentionally made it separate. I don’t think the dot-com people even talked to the store people until around 2006. Today they are totally integrated, with common goals and objectives,” such as delivering one view of the omni-retail Saks enterprise.

 Newegg Opens First Pop-Up

Newegg_Pop-UpNewegg, an online-only electronics eTailer established in 2001, opened its first pop-up store in August 2013, allowing three days of hands-on testing of back-to-school merchandise. The sophisticated yet temporary mall-based store resembled an established retail location. Inside, PCs, laptops, tablets, hard drives, personal cloud storage devices and other technologies were available for “showrooming,” according to a company press release.

“Showrooming is a reality today, so this back-to-school season, we wanted to give our customers a chance to interact with some of our most popular products, in person, in a traditional in-store environment,” said Soren Mills, CMO of Newegg, in the announcement. All purchases made during the three-day event were delivered free via next-day shipping.

“As a pure-play e-Commerce company, Newegg has the agility to quickly and cost-effectively test offline initiatives to better understand how our customers behave both offline and online,” Mills said in an interview with Retail TouchPoints. “We plan to continue testing a variety of offline/online retail experiences with ambitions of getting orders in the hands of customers as quickly as possible across the nation.”

For more information about pop-ups, click here for a current feature story and here for a TouchPoints TV interview, both posted August 2013 on Retail TouchPoints.  

Omnichannel Recommendations

Following are recommendations for those retailers embarking upon or updating their omnichannel strategies, as noted in the Omni-Channel Retailing 2013 report from Aberdeen:

  • Share order management information across channels to increase visibility throughout the entire order process, from the transaction through fulfillment;
  • Ensure real-time collection, centralization and publication of product data across channels;
  • Incorporate customer data and insights into business operations plans, including supply, pricing and promotions;
  • Establish customer data collection guidelines for all channels to enable a 360-degree view of the customer; and
  • Establish executive-level buy-in for an omnichannel customer experience management strategy.

For more information about omnichannel retailing, click here for a recent 2-part feature story from Retail TouchPoints, and here to access an on-demand webinar, titled: Omni-Channel Marketing – Bridging the Gap between Insight & Execution, hosted August 29, 2013, by Retail TouchPoints.

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