One of the biggest retail buzzwords in recent years is Omni-channel strategy, or otherwise known as sales approach that cohesively integrates multiple shopping "channels", which includes physical stores as well as smartphones, tablets, wearables and laptops, rather than keeping them in separate elements.
“The most sophisticated retailers are ensuring their marketing strategies are geared toward enabling customers to convert on any channel"
“Why? Because they realise that a shopper who buys from them in-store and online is their most valuable kind of customer.”
Google cited a 2015 study by market intelligence firm IDC finding that omni-channel shoppers have a 30% higher lifetime value than those who do their shopping only in physical stores or only by mouse or finger tap.
Big data comes into play here because when all channels come together, this means that inventory and shipping information can be captured across the entire business, as opposed to retailers' maintaining separate inventory records for store branches, warehouses and franchisees.
“Getting inventory to the right place at the right time is crucial to optimising sales,” found a recently released survey by retail management consulting firm Boston Retail Partners, or BRP. “With enterprise-wide inventory visibility and accessibility, retailers will have the flexibility to re-allocate inventory from one store or channel to another where it is most likely to sell.”
In a survey by Mckinsey, most consumer companies recognise that the core of the problem—and of the solution—lies in the supply chain. But while plenty of companies are striving to create an omnichannel supply capability, few have succeeded. When they asked a group of senior CPG executives in Europe about their organization’s approach to omnichannel, 80 percent said they had efforts under way, but less than 25 percent believed they were on the right track. They also agreed that building the right supply-chain capabilities seems to be the most difficult part.
Improving e-commerce operations through the use of brick-and-mortar stores -- and through a more unified approach to inventory -- is helping BestBuy become competitive with Amazon.
Before Hubert Joly became CEO in 2012, products were listed as out of stock if they weren’t in one of the company’s warehouses, even if they were sitting on store shelves. It described the transformation that has occurred since then: BestBuy stores now “do double duty as e-commerce warehouses,” with half of online orders picked up in a store or shipped from a store.
The result? As the article reported, BestBuy’s operating margins have rebounded, same-store sales are up, and more than 88% of the retailer's $36.3 billion in U.S. sales in the fiscal year that ended in January were in-store.
Home Depot, whose e-commerce sales rose 17% in the third quarter, has also been working on integrating e-commerce with in-store shopping. The retailer said that many e-commerce shoppers end up picking up about 40% of online orders from brick-and-mortar stores.
Retailers, it seems, should be thinking not just about how to make the most of this holiday shopping season but also about the bigger picture: how to use big data to ensure their entire enterprise functions as one seamless unit.
We can look to our food delivery colleagues for inspiration.