Omni-Channel Paradigms: Why Some Retail Brands Aren't Getting it Right

As retailers scramble to adapt to the new omni-channel 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 rollout 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 omni-channel “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 omni-channel leadership and innovation. However, from the consumer perspective, Sears has taken the omni-channel 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 every day, “need-it-now” items that no longer have a place in large retails stores because they have allowed the pendulum to swing too far towards 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 …

2 comments about "Omni-Channel Paradigms: Why Some Retail Brands Aren't Getting it Right".
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  1. Tom Goodwin from Tomorrow, November 17, 2014 at 8:27 a.m.

    Wonderful piece.
    It's amazing how little thinking goes on in the world. We favor technology and the new over common sense and thinking. Why does 5 months of new world commerce thinking seem to over-ride 200 years of retail experience.

  2. ALOK BHATT from WNS Global Services (P) Ltd | www.wns.com, November 19, 2014 at 9:09 a.m.

    I agree Paul. Customer satisfaction is the cornerstone of success for a retailer. Anytime a retailer wants to cut costs at the expense of customer experience he is bound to lose customer loyalty. Another good point you brought up is that the different channels should complement rather than supplement each other to create an omni-channel experience. Regarding the product selection and availability in the store, retailers usually use the 80:20 principle, 20% of the products drive 80% of the revenue. Hence, the focus to avoid stock-outs is on those 20% products. At WNS, I work with some of the world’s biggest retailers to help them, through advanced analytics, in assortment selection, market-basket analysis, supply chain management and loyalty management. My opinion is that in this digital age, customers expect unlimited number of choices and it is impossible to stock everything in stores. A very judicious selection is needed to ensure that the customer can get what they need, when they need it, at the right cost and through their preferred channel. That is what omni-channel is all about. (http://www.wns.com/Services/Cross-Industry-Solutions/Customer-Care-Outsourcing/Multi-channel-Optimization-Framework.aspx) Isn't it?

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