Omnichannel Retails Comes Front and Center

Stephen DeAngelis

May 28, 2020

Even before the COVID-19 pandemic shuttered physical stores, retailers were adopting omnichannel strategies to take advantage of the increasingly important consumer digital path to purchase. When the pandemic descended on the economy like a curtain at the end of Broadway play, retailers were only left with online sales involving home delivery or curbside pickup. Petr Svoboda (@petrsvob), CEO of Shopsys, has been urging retailers to focus more sharply on online sales for nearly twenty years. He now predicts, “The coronavirus pandemic will accelerate the digitalization of the world at all levels, from trade and education to government and work habits.”[1] He adds, “I firmly believe that the effects of this pandemic will fundamentally alter customers’ buying habits, and even after this has passed customers will prefer online shopping significantly more than they did before.” He believes this change in consumer behavior will be the result of convenience rather than fear. He explains, “Throughout history, humans have been looking for tools to simplify their lives and save time. Nowadays, online stores are have become one of those tools. Online sales experiences will likely be highly valued as the economy tries to recover from a new recession, even though it will predictably come at the expense of traditional retail stores.”

Changing consumer behavior

Imogen Wethered (@Imogenkw), CEO and Co-Founder of Qudini, reports a survey conducted by her company found, “The coronavirus pandemic has had a major impact on the shopping behaviors of U.S. consumers, with 30 percent fully eliminating non-essential trips to stores and other public places, and an additional 52 percent heavily reducing trips. … Instead of visiting a store and placing themselves at risk, many consumers want access to virtual service by phone or video from retailers during the coronavirus outbreak.”[2] From other survey responses, Wethered concludes consumers are unlikely to rush back into stores once the pandemic has passed. She explains, “As the lockdown restrictions ease, these insights suggest consumers will still be cautious about visiting stores. To build customer confidence, retailers will need to enhance their customer management processes.” Many analysts believe the COVID-19 pandemic has accelerated consumer online shopping patterns by decades and, like Svoboda, some predict these shopping habits will be permanent.

Alex Haines, National Accounts Manager at Bastian Solutions Systems, writes, “I believe as the national shutdown persists, customers who are already accustomed to purchasing online will increase their online spending even further and customers who have traditionally spent little to nothing online will be forced to increase or start.”[3] According to Haines, “It’s important to understand customer buying behavior for these channels prior to the pandemic. If we know what customers expected prior, we can assume these will increase after the pandemic subsides as customers become even more accustomed to multiple purchasing channels with a higher reliance on ecommerce and at-home delivery.” He asserts customers expect the following:

Free or low-cost shipping. Haines reports, “Fifty-four percent of shoppers abandoned their carts due to expensive shipping, while 39% abandoned their carts due to no free shipping. And 26% abandoned their carts due to slow shipping.”

Fast receipt of product. “Next day or two-day shipping means order fulfillment needs to happen same day or next upon order placement.” Although I agree this was a pre-pandemic expectation, the crisis required greater patience and lowered customer expectations. It’s unclear whether consumer patience will continue following the crisis.

Free, easy returns. Historically, e-commerce returns run as high as 30 percent whereas in-store returns are traditionally under 10 percent. Having a user-friendly returns policy could be a differentiator for retailers.

Buy Online Pick-Up In-Store (BOPIS): Haines notes, “If customers don’t want to pay for shipping or wait for product, they want the ability buy online and pick-up in-store QUICKLY.” The good news is that retailers opting to provide curbside pickup during the pandemic should be well-situated to continue the practice once the crisis ends. Wethered notes, “To help limit the time BOPIS customers need to spend in-store, a number of retailers are implementing initiatives such as curbside collection, virtual queueing, and time slot-allocated collection times.”

Traditional in-store sales: According to Haines, “Customers expect stores to have product in-stock and at the same price as online competitors.”

Taken together, Haines’ list of consumer expectations underscores the importance of omnichannel strategies now and in the future. Like Haines, Lauren Freedman believes pre-crisis shopper behavior will be enhanced following the crisis. She writes, “Mobile in many ways fuels omnichannel activities even more, and a few stats from our research showed the status before COVID-19: 45% have used a mobile app to buy a product; 30% had used a mobile app to locate a product in-store; 17% are making purchase on their phones while in-store. We would expect that all will see greater adoption in the weeks and months to come.”[4]

Omnichannel operations require visibility and customer focus

“Though omnichannel operations have been at the forefront of retail innovation for more than a decade,” writes Emma Cosgrove (@emmacos), “it is still a challenge for many retailers. Forrester analyst Sucharita Kodali described omnichannel programs … as ‘still a work in progress,’ with inventory accuracy and forecasting demand as top challenges. Inventory visibility and management are key to successful omnichannel operations because, by definition orders are fulfilled through multiple channels, meaning aggregate inventory can get lost in the shuffle if systems are not in place to track inventory levels and locations.”[5] Freedman writes, “Shoppers are asking themselves four basic questions and retailers must be in a position to respond. Is it in stock? Where is it available? What is the most convenient location? How fast can I get it?”[5]

Alexandra Tachalova (@AlexTachalova), founder of online digital marketing event DigitalOlympus.net, observes, “From a customer’s standpoint, every interaction with your company should be part of a singular experience — not a siloed, repetitive one. In fact, a smooth, seamless connection between the online and the offline worlds can provide a lifeline.”[6] She insists understanding your customers’ behavioral patterns is where successful omnichannel operations begin. She writes, “This is where everything begins. Because the omnichannel experience is all about creating a flawless customer journey, understanding this journey from the very beginning is crucial.” Cognitive computing solutions, like the Enterra Shopper Marketing and Consumer Insights Intelligence System™, are able to leverage all types of consumer data to provide high-dimensional consumer, retailer, and marketing insights. Redickaa Subrammanian (@redickas), co-founder and CEO of Resulticks, also believes successful omnichannel operations begins with customer insights. She writes, “Developing a complete view of each customer is the foundation for all successful omnichannel strategies.”[7] She insists two other steps are necessary: Plotting a roadmap and embracing new channels one step at a time. She notes, “When implemented well, omnichannel is about putting power behind the channels that work for you and your customers.”

Concluding thoughts

Svoboda concludes, “In the short term, for many companies, it will seem like a fight for survival. However, the medium-term outlook presents a huge opportunity. Which companies are able to successfully deal with this crisis and become eCommerce leaders is likely being decided now. Good fortune favors those who prepare themselves.” Subrammanian adds, “Beginning the journey toward true omnichannel can be daunting, but the immense value it creates for both customers and brands far outweighs the rethinking, reinvention, and innovations it demands.”

Footnotes
[1] Petr Svoboda, “Crisis as an Opportunity: The Omnichannel World After Covid-19,” Shopsys, 24 March 2020.
[2] Imogen Wethered, “Consumer Demand for BOPIS and Virtual Service Increases in Light of COVID-19,” Total Retail, 6 May 2020.
[3] Alex Haines, “How COVID-19 Will Permanently Change your Omni-Channel Supply Chain,” Bastian Solutions Blog, 19 March 2020.
[4] Lauren Freedman, “The Shopper Speaks: Omnichannel is omnipresent amid the coronavirus,” Digital Commerce 360, 18 March 2020.
[5] Emma Cosgrove, “Omnichannel comes to the fore as Texas launches plan to reopen retail,” Supply Chain Dive, 21 April 2020.
[6] Alexandra Tachalova, “What You Need to Know About Omni-Channel Customer Experiences,” Salesforce, 2020.
[7] Redickaa Subrammanian, “Three Essential Steps toward Omnichannel Success,” Street Fight, 21 January 2020.