Retailers Ramp Up Investments in Omnichannel
Retailers have been working for years to connect their different shopping platforms to boost customer satisfaction and thrive in the face of industrywide disruption, but there’s a world of difference between recognizing value in the goals of omnichannel sales and actually achieving them.
“Retailers have been talking about omnichannel investments for over a decade,” writes Forrester retail analyst Sucharita Kodali in a recent report, “but many retailers still don’t have basic omnichannel capabilities in place.”
According to the report, titled “The State Of Retailing Online 2019: Omnichannel, Marketing, And Personalization,” retailers are still struggling to overcome a number of challenges related to omnichannel sales, but are making investments to overcome these hurdles and create a more streamlined, personalized shopping experience.
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Focus on Inventory for Successful Omnichannel Implementation
Among the report’s findings:
C-level support is critical. One of the challenges holding back omnichannel efforts is lackluster commitment on the part of leadership.
“The success of any cross-channel initiative depends on the senior-most team members endorsing such programs,” Kodali writes. “Several senior executives whom Forrester interviewed in 2018 still don’t prioritize digital channels enough and focus instead on their core businesses and historic capabilities.”
According to the report, 39 percent of surveyed retail sources strongly agreed that their company’s CEO has a “clear vision for omnichannel fulfillment in our business,” while 20 percent disagreed with the statement.
Inventory visibility and accuracy remain challenging. “The most important investment for any omnichannel program is to ensure that shoppers, store associates, and suppliers know which products are where in every store,” Kodali writes. “Many retailers surveyed have still not achieved that vision.”
Fifty-six percent of retail respondents said that inventory accuracy was a problem for their omnichannel efforts, and 65 percent said that forecasting cross-channel demand with inventory planning systems presented a challenge.
More than half (53 percent) of surveyed retailers said they planned to invest in order management systems this year, which should improve inventory accuracy and order routing.
Stores Are Stepping Up Omnichannel Investment
Personalization also remains a challenge. The report notes that retailers are still seeking solutions to measure customer behavior across channels, which would help to better personalize the shopping experience. Currently, personalization efforts tend to center on web channels, with 67 percent of surveyed retailers personalizing recommendations for shoppers, and another 60 percent segmenting emails.
Operational improvements are needed. “At the most basic level, retailers appear stymied by the metrics they should hold stores accountable to, underscoring that incrementality is often difficult to measure,” the report states.
“Stores have had problems with allocating space to stage omnichannel pickups and to handle fundamental offerings like online returns in stores. Furthermore, retailers need to train customer service teams to manage complaints when customers request information that touches multiple channels.”
While many stores have made significant progress in implementing omnichannel systems and processes, others are just now beginning to make these investments. For instance, 66 percent of surveyed retailers had ship-from-store capabilities by 2018, with another 17 percent saying they planned to introduce such a program this year.
Similarly, 67 percent said they had introduced buy online, return in-store, or BORIS, by 2018, with 14 percent planning to implement the feature in 2019. Just under half (44 percent) of retailers offered buy online, pick up in-store by 2018, while 30 percent said they planned to introduce BOPIS in 2019, making it the most common area of fulfillment investment this year.
