3 Business Must-Haves for Omni-Channel Success
Before we talk about the Omni-Channel success, let’s talk about the biggest challenge faced by retailers today that is how to meet the consumer’s desire for a seamless, consistent buying experience, regardless of how they decide to make a purchase.
Take this scenario for example:
A senior citizen wants to buy a new pair of sneakers. They are texted a recommendation by a grandchild, and then they drive to the physical store to make a purchase. On the other hand, that same grandchild might spend weeks perusing online reviews, via a smartphone and desktop computer, adding and abandoning various styles in their cart, only to buy the same pair of sneakers solely based on an enticing email offer.
As technology advances, the amount of available sales channels increases. Consider all the ways that you, as a consumer, can make a purchase today. From brick-and-mortar stores, to mobile apps, to phone orders, the options are endless. In many circumstances, consumers will interact with multiple sales channels in order to make just one purchase. In order to satisfy this customer habit, today’s retailers must be equipped to sell across all retail touchpoints.
This is what’s referred to as omni-channel retail.
What is Omni-Channel?
The omni-channel retail approach aims to provide a unified and seamless customer experience across all sales channels. It enables customers to have consistent brand interactions whenever, wherever, and however they want. The “IDC FutureScape: Worldwide Retail 2018 Predictions” report states that 50 percent of retailers will adopt an omni-channel strategy by the end of 2019. Although an omni-channel strategy promises improvements in customer satisfaction, engagement, and revenue dollars, it certainly doesn’t come without stress on a retailer’s back-office operations. Omni-channel marketing, if approached incorrectly, can put serious strain on a business’s total cost of ownership (TCO), inventory management, operations, and product-promotion strategies.
As HighJump Software’s Guadalupe Pagalday states, “Consumers demand and depend on omni-channel options, which likely have put a lot of pressure on your distribution center (DC) and fulfillment operations.”
Despite those pressures, businesses need a proactive omni-channel strategy to land sales with the modern consumer. Here are the three critical components that are necessary for the success of omni-channel retail strategy:
Inventory Visibility
Inventory and supply chain visibility are foundational elements for success of the omni-channel. Today’s consumers desire a transparent view of their purchase’s progression throughout the supply chain. They want consistent guarantee that they items they desire are in stock, available for purchase, and, after completing the transaction, are en route to the desired location. In order to keep customers happy, retailers must be able to identify not only what items they have in their inventory, but also where in the facility, supply chain, or retail store it currently resides.
Many organizations have begun using radio frequency identification (RFID) tags to track products throughout the supply chain, from production to point-of-sale. RFID technology can be used to record the movement of inventory, while also yielding more accurate inventory data. It improves the exchange of information in the warehouse and to the customer. Having better insight to product demand helps businesses better understand customer behavior, which, in turn, helps retailers to forecast future inventory levels more accurately. Because omni-channel inventory is more difficult to manage, due to its greater amount of transaction sources and sales channels, an RFID tool for supply chain operations reduces errors in inventory management. Furthermore, improving inventory visibility can lead to better customer satisfaction by reducing “out of stock” situations and giving a more accurate depiction of a customer’s order status.
Reliable Shipping Strategy
Today’s customers, thanks to competitors like Amazon, expect a speedy delivery. According to a recent trend report by Kibo, 40 percent of shoppers say a company taking more than two days for delivery would prevent them from making a purchase, while 63 percent expect delivery within three days as the standard. If you’re not offering flexible fulfillment to meet the needs of customers, they’ll quickly look elsewhere.
To meet the needs of your customers, you need to manage your internal operations. An enterprise resource planning system, most commonly referred to as an ERP system, helps companies manage their various business lines and internal processes. To augment their ERP systems, businesses who produce goods often deploy cloud-based supply chain management (SCM) systems.
Businesses can use SCM systems to expedite fulfillment process by creating more efficient workflows at distribution centers. SCM systems can provide supply chain planning, procurement management, product lifecycle management, order management, and logistics. The system provides a central hub for customer shipments and delivery details to ensure items are delivered on time.
Predictive Customer Analytics
Because omni-channel strategies promise a better experience for customers and better results for businesses, their strategies require more data, analysis, and a better understanding of customer behavior in order to be successful. With the massive amounts of data that the additional sales channels bring about, managing and pulling insight from customer data is complex. In today’s digital society, customer buying habits can vary significantly. Think of the scenario described at the beginning of this article. Although two customers inevitably purchased the same item, they approached the buying process from completely different directions. The variety of virtual and in-person touchpoints available today means consumers can arrive at the same purchase in many different ways.
However, using business intelligence software, helps to eliminate information silos across sales channels. It removes the walls between different sales channels or retail touchpoints, so companies can create holistic customer profiles. The software can draw on the many sources of information to make relevant recommendations for marketing, inventory management, and other functions based on the aggregate and interpretation of customer profiles. Halo Business Intelligence advises,“Warehouse managers need to take a predictive analytics mindset in all decisions and focus on how they can understand the possible issues that may or may not occur in the future.” Retailers that listen, analyze, and take action gain better insight, forge better customer relationships, and increase their share of wallet from that customer.
Omni-channel retail strategy is flexible enough to manage sales in multiple channels and integrate those channels to offer customers a consistent purchase experience, regardless of their buyer journey. Though omni-channel retail has its challenges, creating a fulfillment strategy that’s efficient, transparent, and forward-thinking can prove to be pivotal in customer experience and sales success.
