The retail industry has seen so much change over the years that it’s hard to keep up. To meet the changing demands of customers, brands have moved to omnichannel retailing to serve online and offline buyers. According to IDC, omnichannel brands witness a 15-35% increase in average transaction size, a 5-10% increase in profitability, and a 30% higher lifetime value compared to single-channel sellers.
A buyer’s omnichannel journey might look like this. Say Tara, who is 35 years old, has to buy food for her cat. A few years ago, she would go straight to the mall. Today, she starts shopping from her couch by chatting with her personal concierge at Heads Up For Tails (HUFT), a retailer from whom she has been purchasing cat care essentials. The Concierge greets her by name and recommends items based on dietary preferences and restrictions. Tara declines some products and toggles to the next tab to check reviews and prices, find better offers for some items at another retailer, and order them right away. She orders two items from HUFT and opts for in-store pick-up as the items are available at her nearest local store.
Enabling such a seamless brand experience requires synchronization of supply chain strategies, inventory transparency, technology infrastructure and marketing efforts. Adapting to an omnipresent supply chain is challenging, but marketers who respond to the changing market landscape will remain competitive. let’s take a closer look.
Inventory visibility: Decentralized inventory is critical to an omnichannel approach. Most single-channel and multichannel models operate in silos and have virtually no cross-channel inventory visibility. This hinders fulfillment when orders come in through different channels. To solve this problem, retailers need a warehouse management system that syncs with their point of sale platform, keeps stock levels transparent and minimizes the risk of accepting incorrect orders.
Inventory Accuracy: Most omnichannel retailers use physical stores as distribution centers for faster order fulfillment. While this solves the problem of speed, it reduces the inventory accuracy level. Warehouses have an 89-90% higher inventory accuracy rate than stores. An automated inventory management system, RFID tags, cycle counting, designated bins and pallets, and regular inventory audits are some of the ways to increase efficiency.
Delivery speed: Delivery speed is both a strength and a weakness for omnichannel companies. As mentioned, most physical stores double as dark stores for omnichannel fulfillment, meaning orders can actually be delivered the same day or next day. The problem is, most brick-and-mortar stores aren’t equipped for fulfillment. These are not as large and cater to store staff trained to sell, and they do not have the technology to support the complex process. The solution is not as straightforward as we would like. First, retailers need to identify the areas where speed matters most. The quick commerce sector requires fast delivery of healthcare and pharma, and food and beverages as well. Next, retailers must invest in network expansion to get closer to their target audience, and finally, rely on automated logistics solutions for increased speed and efficiency.
Ease of Returns: A truly consumer-centric ubiquitous supply chain must focus on customer convenience above all else. According to Ixtenso, 89% of customers consider the ease of returns to be a significant influence on their purchasing preferences. Customers who buy products from your store online should be able to return or exchange them from their home, at drop-off centers or at a physical store. The option to return products goes a long way in building trust and increasing conversion rates. Investing in a good return-management system can ensure seamless returns across all channels. Customers can use a self-service portal to choose their return method, share photos of items for evaluation and provide feedback, and a reason for the return.
Solve the omnichannel puzzle: The key lies in creating a consumer-centric supply chain where customer demands are met across all channels. This can happen only when retailers have a deep understanding of consumer behaviour.
An omnipresent supply chain cannot exist in a vacuum. It should be complemented with an overall omnichannel-retail strategy that includes marketing, data synchronization, user intent tracking, and customer engagement mapping. Next comes streamlining your network and supply chain ecosystem for short operations. Brands must rethink their distribution model as a faster distribution system means that information must travel faster throughout the value chain. If the transmission of information is not consistent across segments, the end customer will suffer and so will your bottom line.
Brands such as Nykaa, CaratLane, Pepperfry, and Lenskart have implemented omnichannel strategies to merge offline and online shopping experiences with augmented reality, guided selling, free try-at-home services, and user interactions across all touchpoints.
The future of hybrid experiences: Immersive retail experiences are the way forward. Today’s customers move quickly between online and offline platforms and expect brands to support a smooth omnichannel journey. Hybrid experiences offer greater opportunities for customer satisfaction. To stay ahead of the curve, retailers must not only reduce spend, but also solve the problems of hyper-connectivity and last-mile access.
Ankita Singh and Lokesh Kumar are Associate Director, Sales, North America and Founding Member, Clickpost, respectively
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