Magazine Article | February 16, 2016

Shoppers: The New Root Of The Omni-Channel Challenge

By Matt Pillar, chief editor

March 2016 Innovative Retail Technologies

This year’s retail imperative is once again omni-channel, but what was an 800-pound gorilla heading into 2015 looks more like a 400-pound orangutan this year.

For the past couple of years, the biggest omni-channel challenges were decidedly supply chain and fulfillment related; retailers gnashed their teeth over how to achieve enterprise-wide visibility into inventory, fine-tune supply chain dynamics to meet demand from multiple channels, and speed up fulfillment. Those are all process and technology related challenges, and for the most part, the tech vendor community has solved them all, if not in practice, then in theory. At this year’s massive NRF BIG Show, for instance, you couldn’t swing your show bag without hitting an exhibitor touting its “unified commerce platform.”

However, despite the gains into the supply, demand, and fulfillment parts of the omni-channel equation, I don’t think any vendors — ERP (enterprise resource planning), POS, e-commerce, or otherwise — can claim they’ve achieved a true unified commerce platform. Here’s why. While many cross-channel retailers are actively using technology to achieve a 360-degree, every-channel view of their businesses, not one is able to claim a 360-degree, every-channel view of its customers. Customer centricity, that alliterative phrase that’s been a retail buzzword for more than a decade now, is still the thorn in the side of retailers’ omni-channel aspirations.

"While many cross-channel retailers are actively using technology to achieve a 360-degree, everychannel view of their businesses, not one is able to claim a 360-degree, everychannel view of its customers."

At issue is the cumbersome task of connecting individual consumers’ digital personas, likes, preferences, and shopping history with that specific consumer in the physical store space. There are dozens of ways to try to skin that cat, but nobody — and I mean nobody — is doing it at scale. Why? Because it’s really hard. Some tech providers claim that loyalty programs are the key to making this connection (not surprisingly, most of them providers of cross-channel loyalty programs). To some degree, I think that’s true, but it’s not enough. Let’s be generous and say that great retailers are getting 20 percent of their shoppers to opt into a loyalty program. That leaves 80 percent of shoppers, any number of whom could potentially be rock stars on their e-commerce sites, to wander unknown in their store aisles. Incidentally, store aisles are where 90 percent of retail sales are consummated. That’s a big problem.

Will we see progress on this front as mobile commerce continues the momentum we saw during the 2015 holiday season? I think so. The fact that smartphones accounted for 44 percent of all online traffic from Black Friday through Cyber Monday can’t be denied, and retailers must get creative to exploit that momentum. The mobile phone is key to accelerating the pace at which we’re proactively connecting digital and physical shopping activity at a personal level.