In a highly competitive retail environment facing relentless change, the promise of omnichannel is a better customer experience, barrier-free shopping and enhanced brand differentiation.
Only four years ago less than half of retailers pursued an omnichannel approach, but today nearly all have an omnichannel strategy or a plan to invest in one soon.
All good then, or is it? Brightpearl and Multichannel Merchant recently surveyed more than 350 leading retailers and brands to understand their omnichannel retail strategies. The findings were revealing.
While 91% of respondents said they have an omnichannel strategy or are planning to invest in the technology in the near term, only 8% feel they have mastered it. We explored this disconnect further to find that:
- 87% of retailers see omnichannel as critical or important to their business, but just 12% believe they have the right technology.
- 45% of retailers and brands say they either do not have the right omnichannel technology or feel they would benefit from additional platforms.
- Over half of retailers and brands consider their omnichannel approach a “work in progress,” while 19% say it’s a “struggle” or a “pipe dream.” Thus 74% of them are dissatisfied with their omnichannel strategy execution and progress.
While interest in omnichannel is high, execution needs significant improvement. Our findings suggest strategies and platforms are not used effectively or do not deliver on their promises. Many retailers, even after years of implementing omnichannel, still need the right software platform, process and education on how to be effective.
This is a BIG issue. It’s no longer enough for retailers to pay lip service to omnichannel without doing it well. The question remains: why is the gap so large?
Technology: The Challenge and Solution
The retail industry is undergoing massive transition. Technology is changing customer expectations, and barriers between sales channels have blurred.
Integrating various channels in a seamless, consistent manner and keeping up with the pace of change are significant challenges. This may help explain the large gap between implementation and execution.
If omnichannel is so important, why do 88% percent of retailers surveyed believe they do not have the right technology platforms in place?
The effort and cost of technology implementation is an understandable barrier to omnichannel excellence and was a key theme identified in our survey. Adoption of any new technology can create challenges; sometimes there is a seemingly huge gap that impedes progress. Barriers are often related to cost, proof of value or resistance to learning new technology.
Many retailers also told us a lack of management understanding and confusion about omnichannel capabilities held them back. There is a significant gap between visionaries and pragmatists.
With only 15% of CEOs actually executing a digital strategy, according to Forbes, it’s clear that many retailers either don’t support the technologies at their disposal or don’t understand what a true omnichannel business could look like with proper innovation.
Because the concept of omnichannel is relatively new, a lack of understanding of what it is and its value is understandable. But retailers don’t have the luxury of time to come to terms with it, unless they want to be left behind.
Technology can fill the gaps of the customer journey and support omnichannel efforts. There are gaps between offline and online and between front and back office which technology can close, such as ensuring a mobile-first web experience that aligns with messaging across other marketing channels.
Today’s customers also expect retailers to know them, but many spend too much time on cost-consuming processes and multiple engagement channels. Technology that automates back-office processes like order fulfillment, carrier integrations and integrated purchase ordering can drive efficiencies. This frees up retailers to focus on creating positive, personalized, consistent experiences across platforms.
Where Are We Heading?
Retailers understand the benefits of an effective omnichannel strategy. More than 66% of those surveyed said the key payoff from a successful omnichannel implementation is the ability to provide a better, more seamless customer experience across channels.
While the ambition is clear, challenges will continue to cause a disconnect between adoption and execution, including siloed data, legacy systems and over-reliance on cost and time-consuming processes.
Retailers understand the power of omnichannel, but most are playing catch-up. Those that use the right technology as the bedrock of their omnichannel strategy will set themselves apart with an authentic experience that will soon become expected as standard.
The full report is available for download here.
Derek O’Carroll is Chief Executive of Brightpearl