Posted by Ellie August - 9 - 2013 0 Comment

The concept of ‘omnichannel’ has been discussed frequently and in the upcoming conference season it pops up on many  retail agendas - but what are the key challenges of this strategy?


As with several other retail terms, it can mean many things to many people. So what is the true definition of omnichannel? While some retailers discuss omnichannel in terms of devices, others talk of customer store behaviour or even shipping locationsBrand + Commercial’s recent discussion of the topic expressed that “the truly omnichannel retailer is still the stuff of legend”. Clearly this is a strategy worth chasing however, as retailers who appear to have successfully implemented an omnichannel approach report that multichannel customers spend around 3x more than single channel customers.

Multichannel customers spend around 3x more than single channel customers


A recent study by Smarthub began exploring this by benchmarking several retailers omnichannel efforts. The research involved over 225 leading retailers being measured across 81 data points to track the entire online shopping experience from a customer perspective. Key evaluation points included mobile shopping support, policies for purchasing online and returning in store, ship from store policies and the knowledge of customer service staff.


77% of retailers allowed online purchases to be returned in store, which is crucial for customers as ease of returns is often a key concern as is the number of return options. However, this does hold implications for the retailer. Reverse logistics procedures should be in place to get stock back on sale as quickly as possible to avoid any loss in margin - the longer stock is off the shop floor or out of the online stock pool, the more depreciated a product becomes. Not only this our own research has identified that some retailers are leaving their customers dissatisfied by ‘out of stock’ situations, where the stock is simply not visible to their systems.

Only 18% of retailers currently offer a ship from store service


Gaining real-time stock visibility is a key challenge in implementing an omnichannel strategy. This perhaps explains why so few retailers currently offer shipping from store which would help solve this. Smarthub’s study found that only 18% of retailers offered this and surprisingly only 11% of clothing retailers. In the fashion sector where product lifecycles are extremely short it is even more important to keep stock flexible and available - therefore those who can successfully implement ship from store will be in a much stronger competitive position.


One more aspect to be wary of would be delivery times. Smarthub found that on average 21% of orders that were fulfilled from store took over 5 days to arrive - almost twice as high than their total order sample. Keeping delivery times to a minimum is essential to customers satisfaction, particularly with a ship from store service which they will expect to be much quicker than a standard online delivery.

Real-time stock visibility impacts a number of areas of retail in a positive way
Essentially having real-time stock visibility, while difficult to attain, can impact a number of different areas of retail in a positive way. This allows the retailer to deliver customer satisfaction, their customer service teams to deliver the best possible help through better knowledge, less stock depreciation, out of stock situations and markdowns - which in turn will boost retailers profitability.