Omnichannel Experience Not Matching Up to Its Promise

In general the omnichannel experience for customers is not matching up to the promise of seamless anywhere/anytime/anyhow fulfillment, research firm L2 found in its annual Digital IQ Index.

Only four firms achieved L2’s “genius” rating across site and ecommerce – including delivery – digital marketing, social media and mobile. In order, they were Nordstrom, Macy’s, Kohl’s and JC Penney.

“Brands that consistently score high and do well across all these categories were early leaders who invested in digital back in 2008 and 2009, and who continue that high level of investment and push (performance) out further,” said Sam Lee, associate director of retail for L2.

[Get news like this delivered to your inbox every week. | Subscribe to O+F Advisor today!]

As for the omnichannel disconnect, Lee said many brands do a good job of putting the capabilities in place, but fall down on making customers aware of them. He said L2 found that of the 100 brands studied in 14 countries across North America, Europe and the Asia Pacific region, more than 75% could do a better job of educating consumers about how omnichannel can benefit them.

“It’s something the customer is interested in, but awareness is not there,” Lee said. “Brands need to do a good job of educating them so that (omnichannel offerings) are not a second option but a potential first option. Most brands have invested in adding capabilities to their websites and checkout, but it’s not really being advertised as, this is a really good option and here’s why.”

In terms of ecommerce fulfillment, L2 found more retailers offering faster service as they compete with Amazon Prime’s guaranteed two-day delivery. Next-day shipping among surveyed retailers increased from 58% in 2015 to 69% in 2016, while same-day shipping was up from 15% to 27%. Those offering a scheduled delivery date increased from 25% to 37%, while providing a scheduled delivery hour inched up from 21% to 23%.

While many retailers offer ship from store as a way to both provide consumer convenience and counter Amazon’s vast fulfillment network, more can be done in this regard, Lee said.

“Many of them have hundreds of stores, which are currently kind of liabilities, evidenced by the fact that every year they’re closing dozens or more,” Lee said. “So what are they going to do with them? They can maybe shrink down the selling area and transform part to be more like a fulfillment center, especially in major metro areas where it makes sense in terms of density and cost effectiveness. But the last mile is a problem even Amazon is having a hard time solving.”

Retailers that have instituted ship from store should “press their advantage” while they can, Lee said, by turning on more locations as mini FCs “although Amazon already seems to be moving ahead.”

In terms of same-day delivery, L2 found Amazon is the clear leader, offering the increasingly popular service in 27 markets, compared to 17 for Macy’s, 9 for Kohl’s (both with partner Deliv) and 2 for Nordstrom (with UberRUSH). Lee lauded those retailers for expanding the service, while noting it is an expensive proposition.

Another challenge for retailers vs. Amazon in an on-demand world is ease of checkout, with Prime’s one-click ordering vs. the average retail checkout taking four or five clicks, L2 found.

The in-store experience is a place where many brands are falling short of the omnichannel promise, Lee said L2 found. Much more can be done in terms of clear communication, he said, including prominent signage and dedicated pickup areas as well as digital notifications for customers.

“Ideally, once you enter the store, they should be able to detect with beacons that you’re there and make sure your order is ready,” Lee said. “Short of that, customers should be able to send a text saying they’re arriving in 30 minutes. Instead, they get to the store and don’t know how to find their order, and associates often don’t know either. They end up spending more time than they intended, when the whole purpose of omnichannel is to make things easier. Retailers need to invest more in heightening customer awareness and backend systems.”

Lee said it is possible to train and assign certain store associates to handle online orders, similar to what Best Buy does with its dedicated Geek Squad.

“It is happening with Argos in the UK,” Lee said. “They advertise on site that online orders will be ready for pickup in 60 seconds or less. We can’t measure that short of ordering and going to the store, but just the fact that they’re putting those kind of resources and emphasis behind click and collect shows way ahead of everyone else.” Argos was one of 17 firms listed in the “gifted” category below “genius” in L2’s Digital IQ index.

Argos was also one of only seven brands in L2’s index that offered both same-day delivery and date-and-time delivery scheduling. Using an interactive calendar during the checkout process, shoppers can choose one of four time slots during any day of the current week, input special instructions and complete the order in two more clicks.

One interesting note on the mobile side in L2’s research is that brands continue to invest heavily in mobile but are largely ignoring tablets as their usage has fallen off. Many consumers are replacing tablets with so-called “phablets,” larger smartphones like the Samsung Galaxy Note.

Mike O’Brien is Senior Editor of Multichannel Merchant

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.