Marketing & Advertising

5 Reasons Your Omnichannel Retail Strategy Is Failing

Even for established retailers with years of experience in one sales channel, providing a seamless shopping experience across multiple channels — brick-and-mortar, online, mobile, and beyond — can be challenging.

Omnichannel retailing recognizes that consumers control the buying process and seeks to remove the barriers between potential customers and the way in which they shop.

Thus effective omnichannel merchants deliver a consistent and good shopping experience regardless of the channel. If a shopper wants to buy from a mobile device, let her. If she wants to order online and pick up in store, let her. The idea is to meet shoppers where they want to be.

Consumers expect retailers to deliver a seamless and consistent shopping experience regardless of location or device.

Consumers expect retailers to deliver a seamless and consistent shopping experience regardless of location or device.

Simple in Theory, Not Execution

Unfortunately, while omnichannel commerce is simple in theory, is not necessarily easy to execute.

The chief executive of a mid-market retailer with hundreds of millions in annual sales expressed it like this: “Amazon is offering free next-day shipping to Mars and knows my wife’s favorite color, but we can’t even get basic product information on our site.”

The problem is, in part, that many of the merchants most interested in omnichannel retailing are traditional brick-and-mortar sellers who recognize that they have to get a lot better at ecommerce and selling through other channels if they are going to compete and grow.

These same companies, however, may not have the experience, personnel, or infrastructure to do what just about any Shopify merchant does in the evenings and weekends — collect orders online or via mobile and fulfill those orders.

While the omnichannel problems a retailer will face vary from business to business, here are five of the most likely reasons why omnichannel retailing fails

1. Lack of Investment

Brick-and-mortar retailers will invest millions of dollars to open a new store location. They buy or lease the building, pay for remodeling, purchase fixtures, and hire a small army of clerks and cashiers.

But ask them to hire one more person to update product descriptions on the website or invest in an extra developer, and the company’s leadership is likely to whine about tight budgets.

In fact, a 2017 PwC survey found that budget constraints were the most often reported omnichannel problem.

Traditional retailers understand physical stores. They are comfortable estimating how much a store opening will cost and how much they will get in return. But they are out of their element when they try to invest in other channels like ecommerce. So they don’t make the necessary investments for success.

2. Not Enough People

The failure to invest in omnichannel often means that businesses simply do not have enough people to deliver a good customer experience across devices and channels.

If you want to succeed at omnichannel retailing, you’re going to need to hire new employees with channel-specific skills and experience.

3. Software Is Incompatible

More than 40 percent of respondents to the aforementioned PwC survey said that either legacy systems (21 percent) or difficult-to-integrate systems (20 percent) were among the greatest challenges to omnichannel retail success.

This problem — incompatible software — is an extension of a failure to invest or at least a failure to invest properly.

Retailers need to stop choosing expensive, inflexible, proprietary software suites and invest in modern solutions that make it easy to share information from one system to another.

If a business cannot show real-time or nearly real-time in-store inventory on its website because of a legacy ERP, it should think about getting a new ERP.

4. Poor Mobile Experience

There is a significant gap between mobile device usage and mobile ecommerce sales. For example, in 2016 Business Insider reported that American adults spend 59 percent of their Internet time on mobile devices but only 15 percent of ecommerce sales are from those devices.

The reason for this gap is not that consumers don’t trust mobile or that mobile technology is somehow lagging. The problem is that too few retailers offer a good mobile experience.

Bottom line, your site is probably too slow and too hard to navigate from a mobile device. It is possible to have a responsive website that is still hard to use.

Find the top 20 items your store sells, and, over the next 10 days, try to purchase each of these items from your store’s website via a mobile device. Pay attention to how long pages take to load and how easy or difficult it was to find the items.

5. Channel Managers Have Conflicting Goals

Who is your company’s director of omnichannel sales?

If your company is similar to other traditional retailers, you probably have a director or vice president of store operations, of purchasing, of marketing, and maybe even of ecommerce. But which single individual is responsible for omnichannel?

For many companies, management teams have different goals. To succeed in omnichannel sales, companies need either a single leader or cross-silo goals and incentives that encourage omnichannel growth.

Armando Roggio
Armando Roggio
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