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Will omnichannel become omnipresent in 2014?

14th Jan 2014
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Towards the end of the year, I always take some time to look back at the last 12 months and try to summarise the three to four big changes in multichannel retail. In 2013, however, there was no single event that stood out to me – there was more of a shift in our thinking about how multichannel is impacting many facets of our industry. Where in other years it was the visible, outward change that grabbed the attention, I think 2013 was characterised by the often invisible change for the consumer that made - and will make - the difference in the multichannel retail space.

It is clear: cross-channel, multichannel, omnichannel, whatever term you’d like to use, is no longer an option for retailers, it is now a must. It is no longer a competitive advantage; no longer would you start any company, supplying goods or service, in any other way. It is the only way to do business. Stronger still, it is the only way to survive.

Multichannel comes of age

During 2013, multi/omnichannel really came of age. ‘Click and collect’, for example, is more or less a standard feature now, and is part and parcel of the shopping experience – both online and offline. In-store, we now find ‘collection points’ for items reserved or bought online, and outside the store you’ll find dedicated parking spots in front of the main entrance for ‘collect’ customers, or even a collection drive through, such as the one recently launched by Selfridges in London, UK.

Mobile devices are an integral part of our shopping experience these days, whether it’s finding your way to a store, comparing prices in-store on your mobile device, or sitting on the sofa with the iPad on your lap ready to find out more about that product or promotion you just spotted on TV. Retailers have even launched their own brand tablet to get a larger piece of the tablet pie.

Social is finding its place in the commerce space as well. After the initial (over)hype that ‘social’ was going to be at the centre of everything, transactional features have taken a back seat, for now, and social has matured as an integral way to find the products you need, sharing ideas and opinions about products either before, during or after your purchase, regardless of your location (on or off-line).

In 2013, it is clear that our digital and physical worlds have become fully interwoven with each other which will have to be reflected in the way we set ourselves up as retailers in the future. It is encouraging to see the rise of the multichannel director and chief digital officer in the board room and cross-channel teams being set up across the organisation. But more is required to become fully multichannel enabled or to take multichannel retail to the enterprise level.

The next steps

Retailers have been traditionally reluctant to invest in new enterprise systems, with the lifespan of Point of Sale (POS) or back-end systems easily exceeding ten, sometimes twenty years. The last few years of economic downturn have certainly not helped. The relatively new, multichannel initiatives are typically delivered through multiple bolt-on platforms which result in each platform performing part of the multichannel journey, creating islands of business process and data scattered around the organisation. Although sufficient for several years, the demand on these systems is now evolving and some fundamental changes need to take place. Some wholesale systems replacements need to happen – systems that will allow the entire organisation to work as a multichannel business, adapt quickly to changes in the market, innovate to outpace its competitors, and increasingly go back to where retailers have traditionally focused their efforts – optimising business processes, mainly their supply chains, to grow margin.

Fundamental to this optimisation will be data. Although product data management is a challenge that many have already tackled, and creating a ‘single view of the customer’ is on top of everyone’s agenda, an overview of the product inventory and orders across the entire enterprise will be an important differentiator for retailers going forward. Getting it right will enable them to optimise their merchandising, pricing and fulfillment strategies, and reduce costs whilst maximising customer satisfaction. This change has already started, but will gather further pace in 2014.

Looking ahead to 2014

Of course, we will see the outward change as well. The role of the store will continue to evolve, with it now being an integral part of the multichannel journey, rather than existing alongside the ‘traditional’ digital channels. This will be reflected by the ongoing digitisation of the in-store experience and an overall change to a more ‘experience based’ in-store journey. However, it is not just technology that will drive this transformation; the store staff will also need be on board. Their role needs to be re-calibrated to be more service focused as they are being equipped with the tools to do so.  

Barriers between ‘channels’ will continue to be lowered, with the concept of the channel ultimately disappearing and the shopping experience becoming completely seamless. With points to buy, inform or interact woven into our lives, into the devices that we use – our mobile devices, our TVs, the day to day electronic items we use, even our clothes - the decision to buy will be made easier and easier. Better, personalised information will help us make our decisions and sometimes our decisions will even be made for us with machine-to-machine communication the newest channel on the block.

Innovation needs to become part of the retailer’s genetic make-up. It’s no longer just for ‘leaders’, it’s no longer ‘too far away’. The right platforms are geared towards innovation, encourage it even – multichannel has gone way past the point of being a differentiator, now you have to go back to stand out from the crowd with solutions designed to meet the consumer’s desire for convenience.

In brief, 2014 will focus on two keywords: innovation and optimisation. Driven by data availability and agility, it is, in effect, going back to our retail roots.

Kees de Vos is chief customer officer at hybris software.

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