How to Survive in an Omnichannel World: Best Practices for Omnichannel Retailing

October 2016

The global retail landscape is quickly evolving in the midst of the rise of omnichannel retailing. As retailers seek to integrate and align various channels to provide shoppers with a seamless shopping experience, omnichannel retailing is at different phases in different geographic regions. The demand for omnichannel shopping is unlikely to slow down, and retailers operating in different regions of the world will need to overcome various challenges to achieve omnichannel proficiency.

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Retailers must continue to invest in various platforms to achieve omnichannel proficiency

Key platforms that retailers must be present on to achieve omnichannel proficiency include physical stores, web, mobile, IoT and other emerging platforms. Retailers must be aware of these platforms and continue to invest in them as they are the channels through which shoppers seek to access their brands. The ultimate aim is to provide seamless shopping experiences anytime, anywhere, through any platform, and therefore retailers will need to provide consistency through all channels.

Achieving omnichannel proficiency yields benefits to both shoppers and retailers

Omnichannel is increasingly becoming the way in which retail customers want to shop. Current customer expectations are that retailers and brands are accessible through all devices at their convenience, and offering this shopping experience is therefore no longer optional for retailers to remain relevant. From retailers’ perspective, operating omnichannel yields increased sales opportunities.

Priorities to achieve omnichannel proficiency include offering consistency across all channels, proper inventory management, and various fulfilment options

Retailers must offer a consistent shopping experience across all channels, including consistency in prices and services. The price of a product should not vary significantly depending on where the shopper chooses to shop, and service types offered by a retailer should be integrated across all of its channels. Furthermore, shoppers should have access to view all of a given retailer’s available inventory across all platforms, and be able to choose from various fulfilment options such as delivery and click-and-collect.

Retailers must overcome a variety of barriers to achieve omnichannel proficiency

Current challenges that retailers face in achieving omnichannel proficiency include changing the way they track sales, managing inventory, overcoming organisational barriers including legacy technology, solving the issue of last mile delivery, offering a secure method of payment and appropriately evolving the role of their brick-and-mortar stores. Retailers are attacking these challenges in different ways, and the race to omnichannel proficiency is still on.

Omnichannel retailing currently varies by geographic region

Retailers in different geographic regions are at different phases of achieving omnichannel proficiency. Retailers in Western European and North American countries are leading the journey and are quickly adapting to the rising shopper demand for omnichannel shopping experiences. Meanwhile, retailers in Asia Pacific and Latin America are working to improve their omnichannel offerings by working around the issue of secure payments, and largely trying to convince shoppers of the benefits of shopping through multiple channels.

Introduction

Scope
Key findings: Omnichannel is the future
Key findings: Omnichannel has its challenges
What is omnichannel retailing?
Shoppers are increasingly utilising multiple channels to shop
Shoppers are channel hopping
Being omnichannel yields increased opportunities for retailers

Omnichannel Platforms

Platforms for omnichannel retailing
Physical stores
Retailers can leverage physical stores to transact and fulfil
Physical stores play a key role in building retailers’ brands
Web
Online channels offer benefits not offered by physical stores
Mobile
Mobile commerce is projected to grow quickly in the near term
Mobile may be the key to unlocking omnichannel proficiency
IoT
IoT commerce is quickly developing
Case study: Amazon
Amazon offers Dash devices to facilitate frictionless shopping
Amazon Echo leads voice-controlled IoT commerce
Amazon DRS enables others to offer IoT commerce
Emerging platforms
Smart appliances further facilitate frictionless shopping
Wearables will create new retail opportunities in the future
Alibaba leads in developing connected cars
Amazon integrates Alexa with Ford passenger vehicles

Priorities for Omnichannel

Prioritise pricing, service and transparency
Customer expectations for fulfilment are higher than ever before

Challenges of Becoming Omnichannel

Retailers must rethink how to track sales
Retailers must rethink logistics and organisational barriers
Retailers must overcome fulfilment and payment barriers
Retailers must rethink their brick-and-mortar strategies

State of Omnichannel by Region

Asia Pacific
Major retailers in China work towards omnichannel proficiency
Mobile is leading omnichannel efforts in China
Alibaba prioritises O2O: Online-to-offline efforts
Alibaba leverages secure payments and logistics for O2O initiatives
JD.com prioritises delivery to advance omnichannel proficiency
Omnichannel is currently most relevant retailing strategy in India
Retailers in India experiment to overcome challenges
Latin America
Omnichannel initiatives in LATAM are slow to take off
Omnichannel retailing is in its developing stages in Mexico
Walmart leads omnichannel retailing in Mexico
Western Europe
Advances in omnichannel retailing bring challenges for retailers
Retailers in Western European markets continue to innovate
North America
Nordstrom is a leader of omnichannel retailing in the US
Home Depot is another best-in-class omnichannel retailer in the US
Home Depot continues to make digital investments

Recommendations

Focus on shifting organisational mindset and prioritise essentials
I nvest in necessary platforms and be mindful of regional differences
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