Omnichannel path to success for retailers, says report
It’s no longer bricks-and-mortar versus e-commerce — omnichannel is the path to success. Consumers have myriad ways to shop, and retailers are scrambling to keep up with them, says a report by Kantar Retail.
“New (technology) tools … are transforming the way consumers want to shop,” says Anne Zybowski, vice president of retail insights at Kantar Retail. In response, retailers are re-thinking their operations, from infrastructure and inventory systems to delivery and marketing.
As measured by Stores’ annual Top 100 Retailers report, compiled by Kantar, the evolution of the retail industry displays the fitness and survival skills of some long-time inhabitants. For the most part, chart-topping stalwarts — Wal-Mart, Kroger, Costco, The Home Depot, Walgreen, Target and CVS — have maintained dominance through an ability to meet consumers’ changing desires, including their appetites for online shopping and digital interaction.
“The notion of omnichannel remains aspirational. Today’s demanding omni-shoppers know what they want,” Zybowski says. “They want retailers to offer whatever, wherever, whenever they want. And when it comes to value, they want (to have) their cake and eat it too — they don’t expect to pay more for convenience.”
The challenge for retailers is meeting consumer’s new expectations. “Retailers must figure out how to fundamentally transform their business models, ones that have been built for maximum efficiency and scale, and transform them into more nimble, effective ones,” Zybowski says. This transformation primarily focuses on two key retail functions: selling and marketing. Retailers must sell across all channels, what Zybowski calls being “channel-agnostic or channel-agile,” while the marketing transformation involves personalization and shopper engagement.
Many successful omnichannel retailers are broadline general merchandise sellers such as Macy’s, Nordstrom and Wal-Mart, though Zybowski says that specialists such as The Home Depot have made great omnichannel strides. Tom Cole, a partner at Kurt Salmon Associates, observes that mobile is a major driver of omnichannel’s push toward seamless consumer experiences, though the volume of transactions conducted via mobile is still low. He says the challenge for retailers is building toward omnichannel via legacy systems already in place.
“Omnichannel is the new reality for all retailers whether they engage or not. If you’re available where and when consumers look for you, great. If not, you lose to someone who is,” says Marge Laney, president of Alert Technologies. “Online-only retailers lack the high-engagement fidelity that only the instore experience can deliver. Offline-only retailers don’t deliver the comfortable and information-browsing experience that consumers utilize to make their shopping itineraries.”