Omnichannel Paradigms: Why Some Retail Brands Aren’t Getting it Right

MediaPost recently featured this article by Paul Elliott, Executive Vice President of Innovation & Thought Leadership at Rosetta. The original piece can be found here.

As retailers scramble to adapt to the new omnichannel customer paradigm, many are experimenting with the deployment of innovative in-store technologies, introducing new fulfillment options and modifying store footprints and layouts to accommodate new shopping behaviors. Staples, Target, Lowes, Best Buy and Sears are just a handful of the retailers that have begun to roll out changes to their brick-and-mortar stores.

But, as we approach the busy holiday season, will these changes deliver the desired business impact? The answer is … it depends. It depends on how well brands truly understand their customers’ needs and how they want to shop.

For an increasing number of brands, the brick-and-mortar “store of the future” trades square footage for technological advancement. While reducing in-store options can streamline operations and reduce costs, without a clear understanding of the customer journey, it’s a high-stakes gamble that can cost short-term sales and long-term standing as a go-to option for immediate needs. Unfortunately (for the consumers) some of the most significant omnichannel “enhancements” to date have been focused on driving down costs for retailers, not improving the consumer experience.

Take Sears, for example, which is frequently touted for its omnichannel leadership and innovation. However, from the consumer perspective, Sears has taken the omnichannel directive way too far. Have they forgotten (or just chosen to ignore) that many consumers still want to see and purchase products in a store, the same day they actually have the need for the product? It seems they have. They now stock only a fraction of their traditional inventory, in an effort to control costs by pushing shoppers into the endless aisles of their eCommerce channel.

The access to an endless assortment is great, unless you actually need the item now. At that point, it makes no difference if you can order the product in 1000 different colors and sizes. The countless options do not matter to the consumer who needs the product immediately.

Have a flat tire and need a can of Fix-A-Flat?  The product used to be available in stores, but not anymore. Need to finish hooking up your new stereo speakers? Well, I am sorry to report that this retailer who sells stereos and speakers has no speaker wire in the store (but they do have 500 options available online).

Retailers considering a dramatic shift from in-store options to digital channels should consider the following:

  • What does my customer need now? Do you order 9-volt batteries online and wait two days to get them or pop over to Lowes because the chirping smoke detector is driving you crazy?
  • What are they willing to wait for? Large items such as furniture or appliances are typically delivered even if the store has them in stock. This is an area in which retailers like Sears can easily expect customers to rely on digital channels for greater variety.
  • How important is selection? For certain items such as clothing, bedding and home decor, a wide variety is crucial to accommodate different tastes and color schemes. In this case, having a few options in-stock to examine and touch, coupled with a clienteling solution that displays the many variations can help strike the balance.
  • What do they buy together? Make sure that anything customers need to complete their in-store purchase is stocked on site. If you sell dishwashers, you had better stock the hoses your customer needs to install one.

I could go on and on with examples of the everyday, “need-it-now” items that no longer have a place in large retail stores because they have allowed the pendulum to swing too far toward cost control at the expense of consumer experience. For these stores, it’s only a matter of time before the consumer mass exodus begins as they seek new solutions for satisfying their immediate needs. Sears recently announced the closure of 100 more stores before Christmas, including the one in my neighborhood, to which I used to be a loyal customer. If only they’d had that speaker wire …

View the Rosetta Consulting white papers “Customer Engagement from the Marketer’s Perspective” and “Customer Engagement from the Consumer’s Perspective.”

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