Modern Retail

Omnichannel Thinking is Jeopardising Retail Success

Customers are channel blind – they just want a good retail experience. Yet retailers persisting with fragmented, omnichannel strategies are damaging consumer experiences, undermining retail respect and actively encouraging consumer behaviours – from discount-only buying to more frequent returns – that are destroying retail profitability. Craig Summers, Managing Director UK, Manhattan Associates, asks why so many retailers are failing to focus on delivering a single, perfect customer experience?

Brand First

After a decade of omnichannel retailing, it should not be news to retailers that customers buy from a brand, not a channel. And yet, channel-specific policies persist; policies that not only undermine the quality of the customer experience but actively jeopardise brand perception.

How, for example, can any retailer justify an ‘online only’ price when it also has bricks and mortar stores? Just consider the experience endured by the customer who has seen a price online but prefers to pop into the nearest store, only to discover the price is 20% higher. The retailer generously offering to ‘price match’ its own website – only when the difference is pointed out by a somewhat miffed customer – is a clear example of the way omnichannel retail strategies are damaging customer perception and experience.

Similarly, consider the customer receiving marketing emails promoting specific products at a low cost – click through and every single promotional item is out of stock. This is, plain and simple, bad retail thinking. While the retail strategy may appear to be ‘customer first’, the customer experience is completely at odds with this pledge. Where is the respect for the customer? How do fragmented pricing and dated promotions demonstrate that the retailer values the customer in any way?

Customer Confidence

This confused and confusing retail behaviour is undermining already fragile customer confidence and, even worse, encouraging customers to buy only on price. Enticing customers with an online-only price promise doesn’t simply drive customers away from the store; it prompts them to price compare with the competition. It also encourages new behaviours that are further jeopardising retail profitability – such as ordering ten items with a view to returning nine.

Fragmenting the retail experience has only one outcome: it devalues the experience and that retail brand for the customer. Without loyalty or respect, customers will simply escalate those behaviours that fundamentally undermine retail profitability. Buying only on discount and increasing returns is devastating retail performance – and, to an extent, it is retailers’ inability to provide a consistent, end-to-end experience that is contributing to this behaviour.

So what is the answer? How can retailers reflect customers’ desire for a consistent brand experience irrespective of channel? The key has to be information visibility: with complete and up to date insight into the location of every piece of inventory, from store to warehouse, even in transit, retailers can ensure the divide between channels is breached – and avoid that dangerous omnichannel fragmentation.

Combining this inventory accuracy with effective order management also ensures the customer can gain access to the product irrespective of location – whether ordered online, purchased in-store, or ordered by a staff member for home delivery. In addition, this single source of information provides an essential platform for understanding the complete cost of retail sale – rather than the channel specific costs that can be both inaccurate and misleading. With this transparency and deep insight, retailers can fine tune the overall offer to match both customer behaviour and expectation, at the same time as ensuring every sales transaction is a profitable one.

Conclusion

Customers may behave in an omnichannel fashion – checking prices via a mobile while standing instore, for example; but they don’t think channel, and they certainly don’t think omnichannel. Retailers need to reflect and support this customer sentiment: success is not about giving customers a strong omnichannel experience; it is about giving customers a good retail experience, every time.

Craig Summers

Craig Summers

Craig Summers is Managing Director, UK at Manhattan Associates. Prior to this he spent time in a variety of senior leadership roles such as Senior Director at Oracle and Enterprise Sales Director at IBM. Craig is an expert in all things customer experience and drove significant change in the Oracle CRM / CX business, transforming its traditional ‘on-premise’ software business into a dynamic, transactional Cloud / SaaS business.

Summers is also an advocate of ‘Authentic Leadership’ and enjoys spending time actively leading people to realise their potential and exceed their goals with a focus on business performance, customer success and operational excellence.