Five omnichannel underpinnings of profitable commerce

Ian JindalIan Jindal, editor-in-chief of Internet Retailing, goes back to basics to consider the essentials that underpin omnichannel commerce. Whilst many of us are busy selling online and some of us also have retail outlets or trade counters, it’s often easy to forget the big picture. Today Ian takes a step back to look at how ecommerce is shaping up for the second half of 2014.

There’s a revolution underway in the way that we sell. Retailers are reevaluating the way they do business as a result. Underpinning this is a recognition that customers have, quite simply, changed. They no longer expect to go to the shop during set opening hours to choose from the limited range of goods on offer. Instead, the development of ecommerce and related technologies over the last 20 years means that today’s connected customers can, and will, buy whatever, wherever, whenever and however they want to. In this new world of omnichannel commerce, the rulebook of how to run a retail business is cast aside, and merchants must adapt to survive.

That sounds challenging. But what’s required is both simple and transforming: it’s a new way of thinking. Retailers, brands and service providers can cut through complication by refocusing their organisations on the new essentials of omnichannel retail. Start with these foundation stones and the technology and structure built on top will make much more sense to the digitally-enabled inhabitants of the world of new retail.

The customer

It all starts with the customer. Retail, in an omnichannel world, is about enabling the customer to shop in the way that is most convenient to them at any given moment. That extends way beyond enabling the transaction itself to take place online. Rather it’s about browsing that works across channels, so that, for example, an item placed in a shopping basket on a PC will be just as visible from another device, whether that’s a smartphone or even an instore kiosk.

It’s about recognising customers when they revisit a website, and offering relevant help. It’s also about offering delivery and collection options, from free economy delivery to next day or through click-and-collect, that work for each individual customer, depending on where they are and how urgent their need.

Retailers, brands and service providers best plan omnichannel by first establishing how their customers would like to shop with them, how that can be done profitably, and, only then, which partners or technology, from personalisation and web analytics to delivery management solutions, can help them to realise that vision.

Mobile

In a world where more people have mobile devices – and, according to the most recent Ofcom figures, 61% of UK adults had a smartphone in the first quarter of this year – online shoppers are now more likely to use them to browse and buy. Recent figures from the IMRG Capgemini Quarterly Benchmarking Report suggested that an m-commerce tipping point was reached when 52% of traffic to ecommerce websites came from smartphones or tablet devices in the second quarter of this year.

Today, customers see mobile as the remote control for the brands they trust. They expect to use their smartphones and tablet computers to manage information and check stock, whether they’re in a store, on the move or at home. Retailers such as department store House of Fraser are responding: they’re designing for mobile first and using responsive design to ensure ecommerce websites can be seen and used via touchscreen mobile devices as a priority. In a very real sense, mobile is driving the business.

The store

Shoppers and retailers alike are now using mobile to get the most out of the store. While shoppers are using their devices to carry out research, scan in-store codes for more product information and check prices, retailers are using tablet computers and kiosks for in-store clientelling that extends the range available to shoppers well beyond the limits of the store, and they’re using smartphones for in-store payments.

In its connected stores, TUI Travel-owned Thomson is putting devices from large interactive world maps to small self-service computers at the service of customers, while also providing the wi-fi that enables them to reach on their own device. Thomas Cook, meanwhile, has an advice bar app in its stores that customers can use to shortlist holidays for discussion with a consultant, or to email their list direct to themselves at home. Elsewhere, the emerging use of beacons enables retailers to send personalised location-sensitive offers to shoppers as they approach a store.

Stores are also becoming important as collection points. Argos, for example, pledges 60 second pick-up of click and collect orders in its digital concept store. It does so knowing how vital it is that the connected store works to deliver a customer experience that operates as well in practice as in theory. Customer discontent, after all, is no longer private but shared widely on social media.

Shops are even important to those online retailers who don’t have their own high street presence. Most notably, eBay shoppers can now pick up their online orders from Argos stores, while thousands of third-party collection points are now enabling customers to take delivery of – and return, conveniently – their online orders at locations including the corner shop and both mainline and London Underground stations.

Payments

Ecomerce only works when payment is easy and trustworthy. A host of payment options have sprung up in recognition of the varied ways that shoppers now buy. Retailers and brands must enable shoppers to buy in the way that’s most convenient for them, using the options they recognise. That means moving beyond the obvious: not all shoppers want to pay via credit or debit card. Alternative payment methods from Paypal to bank transfer are also popular, particularly in international markets.

One study, from The PPRO Group, suggested this summer that 45 per cent of 1,000 adult online shoppers questioned preferred to pay using Paypal, while 22 per cent opted for credit cards and 23 per cent for debit cards. Critically, the study also showed that 68 per cent had abandoned retailer websites because of the payment process: of those, 57 per cent said they’d left it because the process was too complicated and 46 per cent because they didn’t offer their payment option of choice.

But payment goes beyond the choices on offer: it’s also important that retailers offer methods that suit the device shoppers use to pay, whether that’s a PC, a mobile phone or, in the future, wearable technology.

The commerce platform

Digital now lies at the centre of most retail businesses. Many traders are managing that by putting ecommerce platforms at the centre of their businesses, connecting transactions and customer activity that takes place in the store, online, on via mobile with product availability in the warehouse.

It’s not surprising that platform providers are now starting to see their products not as pure ecommerce platforms, but as broad-based commerce platforms. Using platforms across sales channels gives retailers, brands and service providers a broad view of customer behaviour in order to be able to serve them better at each point. But both retail and technology are developing fast and each business is different. It’s likely most traders, by choosing technology that best serves their business’ strategy, will customise, augment and adapt platforms to provide exactly the experience they want.

Internet Retailing Conference 2014

This year’s Internet Retailing Conference 2014 on the 14th of October takes refoundationing as its theme. Speakers including Andy Harding, executive director, multichannel at House of Fraser, Mark Lewis, online director, John Lewis, John Straw, chairman of the digital advisory board at Thomas Cook, and Harriet Williams, group multichannel director at Labelux, owner of brands including Jimmy Choo, Belstaff and Bally, will consider ways in which retailers, brands and service providers can establish new basics for their business as they build for the future.