There’s no doubt that being able to meet shoppers across any channel at any point in their shopping journey is important, but that doesn’t make going down the omnichannel path any easier.
If fact, just because a merchant is omnichannel doesn’t necessarily mean it’s doing omni well.
Tobias Hartmann, president of Radial, also made it clear that for merchants struggling with execution, omnichannel can become their worst nightmare.
“The theme has not changed, but the avor, the ingredients and obviously the recipe for success has changed slightly,” Hartmann explained.
Though many merchants recognize that they need to deliver on omnichannel in order to keep up with the big-box retailers, it’s an undertaking that can’t be taken too lightly.
“There’s no doubt that omnichannel is a great volume driver and differentiator, but it can become your worst enemy if it’s not executed well,” Hartmann added. “Now that everybody has adopted to it, consumers actually feel the difference and are getting very savvy about who is in a position to execute well and live up to the consumer experience and who’s not.”
Hartmann shared four major insights Radial has observed as retailers prepare their omnichannel offerings for this year’s holiday season.
1 – Omnichannel is off to new heights.
The omnichannel formula for success, Hartmann explained, comes down to bringing together infrastructure and assets, combining that with technology and being able to scale that with a data-driven approach.
This holiday season, Radial has observed some key trends when it comes to omnicommerce and retail.
Hartmann noted that there’s been a 30 percent increase in store-fulfilled volume year over year. Though there is slightly less growth on ship-from-store volume, there’s been tremendous growth of in-store pickup, and Radial recorded an increase of more than 46 percent in volume and 91 percent in dollars.
“That tells you a lot about what’s happening out there. It tells you that retailers are getting more sophisticated with supply chain management, which means they’re getting better at inventory allocation and synchronized store operations,” Hartmann added.
Tremendous growth of in-store pickup: Radial recorded an increase of more than 46 percent in volume and 91 percent in dollars.
The latest data shows that mature players have about 60 to 70 percent of their total eCommerce sales generated and fulfilled through the store network, which is a combination of ship-from-store, ship-through-store, buy-online-pick-up-in-store or drop-ship services.
2 – Personalization and regionalization takes off.
Part of what Hartmann called the logical evolution of omnichannel is that retailers are pushing for better consumer experiences by localizing their effort.
According to Radial, there’s been a 45 percent higher volume year over year through regional networks and distributed inventory allocation. Hartmann said that more of Radial’s customers and clients are pursuing a dual-hub strategy or multinode fulfillment system strategy, which is more in line with what Amazon is doing.
Merchants have also seen 21 percent more personalized orders year over year, which Hartmann said includes embroidery services, personalized gift wrapping, custom packaging and personalized notes.
Product is key, and you can’t overcome a poor product.
Omnichannel has transformed the way both merchant and consumers view the brick-and-mortar experience. Physical stores are no longer just a place to purchase products. They now also serve as fulfillment centers and distribution hubs that serve omnichannel consumers.
“In the past, if you had a great brand and a great product, you just opened up stores, and it was almost on autopilot. That doesn’t work anymore because again, focus only works if you’re in the relevant geographic location,” he said.
But the decision of where and when to open a store is now deeply linked to how that location will impact a merchant’s entire network, meaning retailers have to think more broadly about how a physical store will impact its core operations and competencies.
At the end of the day, stores want to make sales to consumers by offering interesting merchandise that consumers want to buy from them.
Ultimately, that’s what differentiates a good retailer and what Hartmann said merchants should focus on the most.
“Product is key, and you can’t overcome a poor product. You have to make sure you have a really great product out the door and a great merchandising strategy,” he added.
Millennials prefer to access the information they need by pushing buttons through their own command and control, rather than speaking to an agent.
3 – Fraud isn’t getting any better.
It isn’t a surprise that as retailers execute more sophisticated omnichannel strategies, fraudsters are ready to launch even more sophisticated attacks on their systems.
Radial has seen a 30.5 percent jump in fraud attacks year over year, which is why Hartmann said retailers today need even more data to help combat the increasing threat that cybercriminals pose. The data-driven insights that merchants use to scale their businesses are also just as important in their efforts to detect and mitigate fraud.
He confirmed that despite the growing number of attacks, Radial has been able to approve 99.84 percent of demand orders throughout its network of merchant clients. The largest categories of these orders are electronics, games and high-end cosmetics.
4 – Customer service has changed.
“Choice and chat are key,” Hartmann noted.
Millennials, in particular, he explained, don’t want to speak to an agent when they need customer service. In fact, they don’t really want to speak at all. Hartmann said millennials prefer to access the information they need by pushing buttons through their own command and control, which has a significant impact on how merchants interact with their consumers.
As a result, a 35 to 40 percent increase in chat volume, depending on retail verticals, has been observed. In most cases, those chats are specific to questions about deeper product knowledge versus more general customer service requests about pricing or order status.
One new and interesting offering to which retailers are moving is Visual IVR. It’s an interactive support platform that guides customers through a web-based support experience that they can access on their mobile phone. Hartmann said there is a higher solution rate with offerings such as these because customers can be guided through and helped while they are doing other things.
Millennials are also shifting to mobile chat when in need of customer service support.
“It used to be that you were at your desktop at home or somewhere at the office to do a [customer service] chat, but now it’s mobile. [Millennials] push the chat button because they want to know now and dig deeper, and [retailers] have got to be ready for that,” Hartmann said.
“That adds up to what we call confident commerce — you have got to be able to live up to the consumer experience and really bring everything together in a very data-driven and process-driven meaningful way to scale operations,” he noted.
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