Retailers who have successfully implemented omnichannel commerce in their e-commerce strategy not only set themselves apart from the competition, but also gain an additional competitive advantage over pure online shops through the use of branch stocks.
Online commerce is growing steadily and enjoys annual growth rates of more than ten percent. Changing customer demands mean that brick-and-mortar retailers are also selling more and more online. The central challenge for many retailers: How can balance be achieved between online and brick-and-mortar retail. After all, the aim is not to destroy the old sales structures, but to complement them in a meaningful way. Although many retail companies use various channels in parallel, they do not link them. This means that customers cannot act in a cross-channel way. Does this (still) meet the expectations of today’s customers? Clearly: No.
Omnichannel services often still poor
In the recent EHI study “Omnichannel Commerce 2018”, 274 of the top 1000 online shops in Germany surveyed stated that they pursue an omnichannel concept. In contrast to cross-channel, where the buyer can act across channels, omnichannel commerce also creates the incentive that customers can access the entire product range and corresponding services at any time across all sales channels. An omnichannel strategy is based on the idea of ensuring a seamless shopping experience in brick-and-mortar stores as well as across a variety of digital channels. The customer can make a purchase irrespective of the channel. This improves the shopping experience and, at the same time, customer satisfaction as a whole.
The services made possible by omnichannel concepts are diverse and range from order online and pick up in store (click & collect) to order in store and have delivered to your home (in-store online shopping).
It is astonishing that the distribution of these services is still very low. Only click & collect is offered by 250 of the 274 omnichannel shops, but that only applies to online payment. 152 shops offer their customers this service with combined payment in store. The option of placing an order in the online shop via, for example, an employee tablet, is only offered by 41 of the 274 retailers. So there is still a lot of catching up to do when it comes to omnichannel commerce.
Gabor shows how it can work
With its omnichannel structure, the family company Gabor has created a solution that integrates the existing brick-and-mortar retailers in the best possible way and at the same time can hold its own against purely online players like Zalando and so on.
Using the marketplace approach, Gabor pursues a consistent “retailer first” strategy in which online orders are sent promptly to the nearest retailer using algorithms. Here, the customer can try on their goods, examine them physically and of course return them. If a product is not available from a retailer, it is shipped from the Gabor central warehouse.
This approach supports the still popular brick-and-mortar retail, which can generate additional sales without making its own IT investments. “Although this strategy increases complexity compared to a conventional online shop, it also offers us many advantages,” says Dr. Markus Reheis, Global Head of Marketing at Gabor. The retailers’ decentralized stocks ensure that the end consumer has the widest possible range of Gabor products available. And the strategy is a success: by integrating retailers, Gabor was able to merge online and offline. By the end of 2018, almost 400 branches are to be connected to the marketplace.
The in-store experience must also be good
Gabor is also thinking ahead in the in-store sector and is successively equipping retailers with terminals that offer access to the entire Gabor range and can query availability in the branch as well as in the central warehouse. The customer thus benefits from maximum retailer flexibility coupled with targeted advice. But the in-store experience is not so positive everywhere. The customer experience in shops is a weakness of many retailers. Although brick-and-mortar retail is currently on the upswing and is gaining in importance again, consumer satisfaction with the experience in stores is declining. According to the “Global Consumer Insights Survey 2018” by PwC, only just over 50 percent of German consumers believe that sales staff have sufficient knowledge of the product range.
The bottom line
The different channels must be brought together into a unified strategy – digital and physical communication should complement each other and create a unified customer experience. Advice and service must provide quality and added value for customers offline and online. The key to success lies in a holistic view of the sales channels. For customers to develop a long-term buying interest in a brand or a product, a concept is needed that guarantees a consistent customer experience.