How to be an Omnichannel Superhero
It’s a bird! It’s a plane! It’s the super-charged, light-speed-traveling omnichannel retailer. Able to reach customers across multiple devices and meet demand across every dimension, the omnichannel retailer has more avenues to capture more market share than ever before. From mobile to virtual payment to shopping cart to brick-and-mortar, winning at retail is no longer shop versus virtual shopping cart. In fact, 30% of consumers use more than three channels to research an item and make a purchase.1
Defining omnichannel retail
The distinction between multi-channel and omnichannel retail relates to the level of integration between the channels. In multi-channel retailing, companies sell through several sales channels—brick-and-mortar, catalog, ecommerce, contact center, mobile—but each channel is siloed, with independent goals and strategies. Consumers can purchase goods in any of the channels, but with little data sharing between siloes, understanding consumer behavior is often left wanting.
In omnichannel retailing, a customer can use more than one sales channel to shop from a retailer for any given transaction. They can buy online and pick up in-store for example, or use mobile in-store to research or make a purchase, or they can buy in-store and initiate a return online. Multi-channel retail offers customers a suite of options for finding and purchasing goods and services. Omnichannel offers the same options, but with greater fluidity and integration of information across channels. Omnichannel also offers the retailer sophisticated insight into customer behavior and preferences, all while offering greater consumer choice and cutting-edge shopping technology.2
From Clark Kent to Superman
Today’s consumer wants more options more of the time. And the reasons behind each choice allow retailers to increasingly customize options for individual consumers. Shoppers using multiple channels buy more goods; by some accounts, more than four times that of the single-channel shopper. This kind of growth opportunity simply cannot be ignored. And this means big business. According to industry experts, there will be 448 million mobile payment users in a market worth $617 billion in 2014.3
Understanding consumer behavior requires sophisticated data analysis tools, mature social networks, and identifying key factors to improve customer loyalty and retention. The endgame is meeting the buyer in whatever space they occupy and understanding why they’re there.
Keeping up with lightning-fast changes in technology and rising customer expectations means retailers don’t have time to rest on their two- or three-channel laurels. Yesterday’s features may have been disruptive, but today they’re outdated and commonplace. As a result, retailers must continually revisit their omnichannel strategy to stay current. In other words, Clark Kent may report the facts, but Superman knows what to do about them.
Tablet users are four times more likely to purchase and spend 50% more per purchase than smartphone users. (Source: Adobe, The Impact of Tablet Visitors on Retail Websites)
Lack of customer engagement is Kryptonite to your company’s success
In today’s hyper-competitive market, increased customer satisfaction and loyalty can differentiate a brand. Failing to capture the shifting attention of intelligent consumers is Kryptonite. Online shoppers come to the table more informed than their predecessors. Savvy multi-channel shoppers don’t just look for good deals, they look for customer and editorial ratings, popular items, social media rankings, and real-time offers. Whether virtual or brick-and-mortar, customers enter stores either armed with knowledge about specific product features and pricing or prepared to uncover that information.
Omnichannel retail creates seamless consumer experiences across all channels with the ultimate goal of engaging customers on all fronts—from desktop to laptop, tablet to smartphone, brick-and-mortar to web store, social media outreach to print. The integrated omnichannel retailer utilizes a host of offers across multiple mediums to engage more consumers more of the time.
Unlocking your company’s Spidey-sense
Savvy customers require super-powered response times and wraparound customer relationship management, as well as an array of touch points to increase loyalty and decrease abandoned shopping carts. From flash sales to member discounts to tell-a-friend programs to the traditional importance of delivering goods on time and as ordered, intelligent data around consumer behavior is a superpower for retailers.
Today’s customers understand products in a way yesterday’s never did. No longer relying only on word of mouth and retailer reputation, customers are more aware of products (including price, quality, and shipping costs).
As a result, any errors at checkout are more likely to be detected. For example, while experts don’t agree on the causes of abandoned shopping carts, “unexpected costs” are a contributing factor.4 Shipping costs are one culprit, so are tax calculations. For customers accustomed to assuming online shopping is tax free, seeing tax calculations at checkout can be a shock. For omnichannel retailers, shopping and payment technology are inextricably linked. It’s no longer a question of “Visa or MasterCard?” Consumers pay with everything from digital wallets to mobile coupons to Bitcoin.5
Mobile point of sales (mPoS) is no more a “nice-to-do,” but rather a “must-have” technology:
In-store pickup tied to free shipping or other discounts.Social shopping apps that enable consumers to “like” and manage products over time.Vicinity-based mobile notifications that pulls info from shopping apps. Location-based technology that communicates with consumers and tracks consumer behavior for browsing, liking, and purchasing.
Join the Justice League
Retailers have a lot to consider when implementing an omnichannel strategy and may ask questions along several vectors: 6
How will my supply chain management be affected?How do I address the compliance challenges of excess inventory, shipping, distribution, and location of customers?How will my customer relationship incentive and rewards programs be impacted?
By meeting customer demand across all channels, the potential to build greater brand loyalty and longer term relationships is there–but only if the engagement efforts are usable and worthwhile.
Bring Superpowers to Sales Tax Management
More channels mean more sales tax requirements. Doing sales tax manually can undermine omnichannel retail efforts.
Sales tax compliance isn’t exactly on the top of every retailer’s to-do list. Given that compliance across channels increases the likelihood of error and even, proactive strategies are an omnichannel must-have.
Business leaders may consistently identify adherence to government regulations as a significant barrier to growth, but few realize the importance of sales tax accuracy unless they’ve been on the wrong end of an audit.
Tax requirements touch all channels. As the days of tax-free online shopping recede into the mist, the taxman is emerging from the shadows. Finding a sales tax solution that integrates with multiple channels is no easy task, especially one that integrates with each core business function: address verification, calculating sales tax and shipping, handling tax exempt transactions and so forth. Rules regarding sales tax, reporting, shipping, receiving and payroll, can undermine omnichannel efforts unless proactively addressed.
In the U.S. alone there are over 12,000 taxing jurisdictions, many of which (e.g., Florida, Texas, California) are requiring out of state ecommerce companies to collect sales tax for the first time. If the national effort to effectively end sales tax-free online shopping succeeds, the already difficult risk-prone sales tax problem will worsen. The solution? Automating the process with a cloud-based sales tax solution that resides within your ecommerce system or shopping cart.
In the new world of brick meets click, the retail superhero is one who plans and executes a compliance strategy that is robust, responsive, and leaps between channels in a single seamless bound.
1 Oracle, Cross-Channel Commerce: A Consumer Research Study.
2 Defining Omnichannel Retail, Bill Davis founder M&G consulting.
3 Gartner, Forecast: Mobile Payment, Worldwide, 2009-2016.
4 The Definitive Guide to Shopping Cart Abandonment.
5 Retail Touchpoints: The Evolution of Retail 2014.
6 Cohn Reznick: What Retail CFOs Should Be Thinking About Now.(877) 780-4848