Omnichannel is More than a Pipe Dream

Omnichannel has become somewhat of a buzzword in the retail world in the last couple of years. In fact, so many companies have adopted an omnichannel strategy, that it becomes difficult to compete with the established players in the market without going the omnichannel route yourself.

One of the main reasons for this trend is that customers are expecting a much more sophisticated experience from online retailers than ever before. This trend has been driven by the relentless pursuit of companies like Amazon to snatch consumer dollars away from brick-and-mortar stores.

So where omnichannel was previously relegated to flashy marketing campaigns, it has become somewhat of a necessity if you want to compete in the eCommerce marketplace.

Omnichannel is impossible to ignore. It has to become a driving force that could propel your company to higher growth and market share—if you can pull it off successfully.

In this article we will discuss exactly what omnichannel retail is, as well as ways how your company can become part of the omnichannel revolution that is taking the global retail market by storm.

What is omnichannel retail?

First, we have to define Omnichannel before we can consider why it has become such a persistent trend in the online marketplace.

The fact is that the definition of omnichannel has changed meaning several times over the last couple of years as different technologies and trends became influential in eCommerce.

To define and truly understand omnichannel, we have to boil it down to its core principle: namely, giving customers a way to interact with a brand in the easiest way possible or in the way that will be the most convenient to them.

When a retailer offers an omnichannel service to customers, a consumer will be able to interact with the company in person by going to a physical store, or by picking up a phone, sending an email, or even through social media and live chat services. The customer will also be able to visit the retailer's online store to place an order or to browse their catalogue.

All the while, the retailer will closely track each customer's interactions with their brand so as to give them an experience that is both consistent and seamless. The goal is to give each customer the same level of service whether they interact with your company face-to-face or online.

At the same time, the customer isn't required to use any one particular service or portal to interact with you. They can choose the avenue most convenient to them at the moment—often the device or method that is closest at hand.

This is similar to cross-merchandising. When you put products on display in different areas of your store—or draw attention to them in different ways—you prod a customer repeatedly to make a sale. Obviously, you want to keep this type of branding tasteful and in line with your brand. You want to position products in multiple places to grab your customers' attention and increase sales.

Omnichannel is similar in that the focus is on the brand, instead of the delivery vehicle for the product. You want consumers to focus on the brand as they interact with it on a journey across channels and locations. Omnichannel strives to give customers the same brand message through different channels, and then allow them to buy the product through the channel they are using at that particular time.

Why you need to adopt omnichannel retail

True omnichannel retail is difficult to achieve. This is because you have to manage sales and inventory spread out over different platforms, different channels, and different physical locations.

The key to omnichannel is to manage all the disparate parts of your retail operations from a central location. In other words, orders have to be processed by a single hub, no matter where they originate. Inventory has to be managed by the same system to ensure that you never oversell products and make promises to customers that you cannot honour. In the same way, your suppliers need to be managed by the same system, to ensure that you have the right goods available, in the right location, to meet consumer demand.

Obviously, keeping track of all these channels manually would be a nightmare—if not downright impossible. You need an integrated system that runs all your channels, stores, and warehouses from one back office.

The benefits of such an centralised system are manifold:

You keep control of your data and ensure data integrity across platforms.
You will be able to keep track of inventory no matter where it's located globally.
Managing your taxes is simplified.
You will be able to track all orders across all channels from a centralised interface.
You would be able to coordinate your processing and shipment efforts in the most efficient way possible.
The system will allow you to keep your branding and customer experience consistent across channels.
Because everything is managed centrally, it becomes easier to keep customers happy and garner positive online reviews.
The omnichannel system will also improve your in-store experience. This is because the POS system is seamlessly integrated with your webstore and other channels.
With this type of system, it's possible to automate order management workflows. This will save time and improve fulfilment times.
The system will also open opportunities to expand your business, for example, it becomes easier to access foreign markets.

Managing multiple sales channels is challenging

When considering all the benefits of omnichannel, it's not surprising that so many companies have jumped on the omnichannel bandwagon—often with mixed results.

When surveyed, most retail executives admit that they find it difficult to make true omnichannel a seamless and integrated experience for their customers. Only about a fifth of executives said that they are confident that they will be able to achieve true omnichannel this year over last year. In other words, many retail executives have tried to implement omnichannel but found it more challenging than expected.

Why is that? Because many companies are still stuck using outdated and frankly, deficient technologies and systems to handle their order fulfilment. This includes using the humble spreadsheet for inventory control. This data then has to be input to separate programs to handle their bookkeeping and accounting. Then they run online stores that use a completely different technology—which in turn have to be manually reconciled with the company’s spreadsheets and bookkeeping software.

Often, these companies run separate systems to handle their order management and inventory control. When different parts of your order management workflow run in separate systems, omnichannel becomes so hard that for all practical purposes, it's nothing but a pipedream.

What is the answer? You need an integrated system if you want to open new channels to your customers and explore all the new and exciting ways it's possible these days to reach consumers.

The system that runs your back offices needs to be able to manage all of your orders from all your channels in one place. Then it needs to update and manage inventories automatically as orders come in and are processed. The system must also be able to manage different brands in the same location and ensure that pricing remains consistent across platforms.

Which means you need a system that is able to integrate all of your business units and automate the order fulfilment process across channels.

This is something that wasn't really necessary before omnichannel came on the scene. A few years ago for example, a physical store had a POS that ran locally and managed all the stock physically present at that location. Then the sales of those products were handled for that particular store only—processing payments and updating inventory levels locally for that physical location.

When inventory had to be restocked, the system only had to manage that particular store's stock levels. The products were stored in a nearby warehouse, and order fulfilment was relatively simple to track.

But this type of setup will never be sufficient for omnichannel.

When you want to run a business across different channels, your order management system needs to be aware of inventory levels at all your warehouses and stores. If a product is unavailable at one location, the system will then be able to ship the product from a different distribution centre or store. Then the system has to automatically arrange for that product to be picked, packed and shipped to the customer's preferred location—either to a store, or directly to their home. This is only possible if you have a centralized management system to run your back office.

Omnichannel puts extra demands on employees

It isn't only the technology infrastructure of a company that has to receive an upgrade to make omnichannel possible. Your retail staff and other personnel also need to improve their game if you want to make the dream of offering a seamless customer experience across different channels in your business a reality.

Your staff will have to learn new skill sets and adopt different behaviour to make omnichannel successful. Everyone has to work together to make it work.

For example, omnichannel often turns your local retailer into a mini-warehouse and shipping location. This allows the local store to process and fulfil orders placed on the company webstore. The store should also be able to process orders received through the company's call centre and ship the order directly from their own inventory.

There are many benefits to such a setup. Firstly, the local store might be the closest location to the customer's shipping address. Which means you would be able to cut delivery times and minimise shipping costs. It might also eliminate the need altogether for a centralised distribution centre or warehouse for the company as a whole. The network of brick-and-mortar stores would now be able to function as the company’s distribution centre.

This sounds good in theory, but is impossible to achieve without buy-in from the employees at those stores. Many employees won’t be happy if their employers suddenly expect them to take on the additional duties of picking, packing, and shipping orders while also running a physical store and selling goods to in-person customers.

When you expect your retail staff to become part of the fulfilment team, they will need additional training. You will also have to provide them with the packing materials and facilities to run additional shipping duties.

The fact is that if your retail staff isn't up to the task of taking care of order fulfilment, you will never be able to satisfy shopper's demands for a true omnichannel experience.

Visit behance.net/cullandnguyen for more of our work. — Photo by Korie Cull / Unsplash

Conclusion

These days, customers expect to be able to shop anywhere and pick up those goods at a location that is most convenient to them. They would also like to return goods to their preferred location.

This is the dream of omnichannel. The goal of omnichannel is to give more opportunities to customers to interact with your brand and purchase your goods. You want to give them a seamless shopping experience, no matter which channel they use to interact with your company.

Delivering that kind of experience is easier said than done. Omnichannel will put demands and expectations on your retail infrastructure that is simply impossible to achieve without the right technology and processes behind the scenes. You need a centralised, integrated system in your back office to achieve this level of customer experience.

There are several omnichannel order management systems that bring omnichannel within the reach of even smaller, mid-market businesses. You don’t need the clout and capital outlay of large retailers to achieve omnichannel. When you have the right technology running your order management, the system will do the hard work for you.

An Omnichannel OMS will manage your order management processes across channels, prevent errors, speed up your services, and allow you to take charge of your customer experience no matter where they shop.

The system is also scalable, allowing you to add or remove channels when it seems most beneficial to your business to do so. You will be able to successfully manage your business regardless of how many channels you employ at any one part of your journey.

With the right technology in place, omnichannel will no longer be just a pipedream, but a workable reality. It will allow you to truly master omnichannel and give you an edge over the competition.The system will simplify your administration and management tasks, allowing you to focus on growing your business and making the most profit out of your current operations.