The traditional consumer path to purchase has evolved. Shoppers are no longer divided between online and in-store, and individual sales are difficult to classify as e-commerce or brick-and-mortar since a single purchase can be inspired by mobile, researched on desktop, and bought in-store. Digital influence is expected to grow, and an estimated 64% of sales in 2015 will be influenced by a digital channel.
This doesn’t mean brands can rely on digital to attract consumers and treat stores at bare bones stock rooms. In fact, 72% of shoppers consider the in-store experience the most influential factor in their purchase decision.
Consumers expect a channel-agnostic experience that enables them to buy online, pick up and return in-store. This requires brands to share SKU and collect consumer data across all channels, a difficult task that only a few brands have done successfully. Yet, it’s an investment worth making. As shown in the graph from L2’s Omnichannel research briefing, a channel agnostic strategy can significantly boost net sales.
Here are some tips for brands looking to improve integration across channels:
Think beyond free shipping. Omnichannel in the U.S. has been synonymous with inventory management, with 100% of retailers in the country offering free shipping. Meanwhile, Europe has been a pilot of flexible fulfillment and same day solutions with just 25% of brands providing free delivery. France is especially forward-thinking in flex delivery, with 78% of Big Box retailers in the country offering click-and-collect.
Prioritize convenience over speed. Amazon’s consistent offering of newer, faster shipping at negligible marginal costs has created a sense of urgency for fast and low-cost shipping. Yet, it’s important that brands avoid getting caught up in the fulfillment arms race. Seventy-eight percent of consumer choose 10-day economy delivery despite faster options being available.
Retailers should focus on last-mile solutions that take away the hassle of receiving (and often missing) packages at home. Instacart, Postmates, Deliv, Curbside, eBay and Uber have tackled this problem by offering small delivery windows in dense, urban areas. Yet, no solution has been rolled out nationwide.
Make in-store inventory visible – and update frequently. Five of the 11 Department Stores tracked in L2’s upcoming 2015 Omnichannel study have visible inventory status online. Banana Republic, Best Buy, Crate & Barrel, gap, Home Depot, Macy’s, Nordstrom and Walmart are best in class examples that enable reserving of items in-store. Select stores even update their inventory hourly.
Select stores leverage this technology into a concierge service with opportunity to upsell. Harvey Nichols, for example, has a Click & Try service that sets aside pieces the consumer reserves online along with complementary items set aside by a shopping assistant.
Integrate digital and in-store teams. The gap between digital and in-store can only narrow once channel teams are integrated. For example, the buy online and reserve in-store feature only works if sales associates pull inventory off the floor and set aside for online shoppers. If rewards go straight to the e-commerce team, few will be willing to do so. Similarly, e-commerce teams will only propel initiatives to drive the consumer in-store if sales can be credited to digital assets.
Training in-store sales associates is another pillar of channel agnostic retails. Retailer efforts to enable reserving an item online are often thwarted by sales associates who lack knowledge of the new features.
Learn from Big Box players.
Big Box brands have some of the best online/offline inventory management systems in place. For example, 59% of brands in L2’s Big Box study made their in-store inventory visible online in real time, and 50% offer in-store pickup for online buys. Unlike in other categories, delivery e-commerce has never been a viable option for Big Box. Since shipping a $3 shampoo or a heavy toolset is cost inefficient, Big Box brands have opted to encourage consumers to pick up items at the nearest store.
Be nimble. Despite studying the omnichannel capabilities of more than 100 retailers across all consumer categories, L2 has yet to find a clear winner. The field is still open to experimentation. Too often retailers wait for an all-encompassing, scalable solution before dipping their toe in merging e-commerce and physical retail. Successful ones, however, start small and change their strategy accordingly. Nordstrom, for example, piloted its first in-store pickup program by asking drivers to text the store for their order to be delivered to the car. Other brands have experimenting and changed course at a fast pace. Walgreens, Sears, Staples, and Guess have already changed their in-store pickup methods implemented in 2014. For example, Sears no longer requires online shoppers to pay for an item before picking up in-store. And Walgreens and Staples have removed the reserve online feature available on their sites in 2014, perhaps due to the challenges of setting aside inventory for undecided consumers.
Members can access full omnichannel briefing here.
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