February 28, 2014
Retail industry is looking at Omni-Channel in a big way in 2014 so that connected customers can shop for and purchase the same items across different channels. GrowthPraxis, a consulting and research firm focused on Payments and Commerce has come up with a report that talks about the evolution from single channel to multi-channel retail and now to Omni-channel retail. And this revolution is all about making sure the consumer experience with a brand is consistent.
To overcome drop in sales and to compete with the ecommerce industry; traditional retailers started launching their own online stores in last few years – Multi-channel sales strategy. In this process, many retailers attempted ecommerce, by setting up online operations as standalone businesses with separate technology. The channels available to businesses were created through Internet and mobile. This drastically changed the retail landscape. For example, email, text messages, e-commerce services and technology have created new opportunities for business. These multiple channels have helped in creating a reliable distribution channel that concentrate on different demographic populations. Multichannel contributes to the rapid growth of revenue, branding, loyalty and positive word of mouth.
On the flip side server crashes, lack of inventory, data leakage and software updates played the role of a spoiler. Additionally, while shopping through those systems customers witnessed price anomaly between online portal and offline formats. There were also issues of stock out and payment failures.
The poor experiences of the customer lead to decrease in sales and jeopardized the traditional retail’s brand image. The fear of failure still lingers in the minds of many retailers. However in recent times, the advantages of ecommerce/mobile commerce have made it absolute necessary for traditional retails to open their own websites.
The present objective of retailers is to remove the drawback in multi channel sales channel and build a robust sales channel which will help in boosting sales and gaining of lost market share. As a result, retailers are moving towards what is called Omni-Channel retailing. In its most basic terms, Omni-channel retailing means connected customers can shop for and purchase the same items across different channels. It can be in a retail store, through computer, through smartphones at any place and time. Omni channel will be an integration of technology and retail where the customer experience will be same while shopping through online or offline system.
However, Omni Channel retailing is not easily achievable. Systems will become more complex with the expansion of technology, as a result of which retailers will have problem in managing. Moreover retailers face issues in ramping required skills to analyze the enormous amount of data generate through traditional POS, mobile POS, self-serving kiosks, and online shopping to name a few. As a result, large numbers of technology companies have popped up to help retailers in building Omni-channel sales. In cases, we have also seen retailers planning to acquire technology startups to overcome the challenges associated in building an Omni-channel.
Nordstrom is a very good example of a retailer who has achieved major milestone when it comes to Omni-channel retailing. Nordstrom is a leading specialty retailer offering clothes, shoes, and accessories for men, women and children. It has presence in 44 countries. Nordstrom has created a seamless experience for Nordstrom customers. Customers are able to buy in store, buy online – ship to home, buy online – pick up in stores and return through any channel. The retailer achieved this success through a drop ship process. Customers have started loving the experience and in this process, the company has increased its profitability.
It will be prudent for a retailer who is still looking to develop a mobile wallet and looking to have an omni-channel system to combine the two things right from the strategic level. Look at them in a cohesive fashion for building the plan and implementing the technology. Following is the scope of the GrowthPraxis study:
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