To make your omnichannel strategy profitable, you need to understand your customers, provide them with the goods and services they want through any retail channel they desire, deliver their orders quickly and efficiently, and offer outstanding customer service that makes them feel valued. No matter how smart, seamless, and well received your strategy may be, if it is not boosting the bottom line, it will be short-lived.
Making your omnichannel strategy profitable requires careful implementation and close attention to detail. Here are some ways to prevent profit loss.
Manage Shipping Costs
Shipping is the proverbial fly in the ointment for omnichannel retailers. If you don't have the right strategy and processes in place, you could end up losing sales and decreasing profitability. For example, if your analytics show that customers are abandoning their shopping carts online, it may indicate that your shipping costs are too high. Because they are caught between customers who want free shipping and others who demand delivery within a day or two, retailers struggle to keep prices reasonable and offer competitive shipping rates. At the same time, they understand the importance of not only selling through multiple channels but also melding the best of online with the best of in-store, so customers are delighted with their shopping experience from the initial touchpoint to the final delivery.
A solid omnichannel program must include an order management system with intelligent routing to tell retailers exactly where products are located within the supply chain and get those products to customers as efficiently as possible. Accurate inventory visibility is key to solving the shipping conundrum. Once inventory is located, alternative means of fulfilment can be employed, such as ship-from-store. Ship-from-store capabilities help companies sell inventory wherever it's located. Such capabilities also help retailers save the sale when an item is out of stock online or at a specific store location. Ship-from-store can cut delivery costs because the retailer uses its own stores as fulfilment centers, dispatching the product and fulfilling the order from the location closest to the customer. But to do this profitably, the retailer must use its supply chain efficiently.
Further complicating retailers' efforts to make an omnichannel strategy profitable is training staff to pick, pack, and ship items efficiently and accurately without neglecting their in-store customers, but when they implement it the right way, ship-from-store can boost retailers' bottom line.
Deliver on Your Omnichannel Promise
When information is siloed and processes don't work together, the extended footprint you've worked so hard to expand will fast become a product wasteland. Customers want a liberating, flexible experience—the surest way to earn disaffected customers is to promise various options and not deliver.
However, the benefits of omnichannel strategies can be difficult to implement. A Retail Info Systems report, "Revealing Causes of Omnichannel Failure," found that retailers struggle to execute omnichannel deployments effectively. For example, the majority of retailers place a high value on the fast and efficient execution of in-store pickup processes, but they admit that their ability to perform these tasks is only average.
Similarly, many retailers now have the ability to sell products through different channels, but they often fall short on the follow-up tasks. In addition to failing to consider and account for the actual mechanics and cost of delivery, there are other challenges when it comes to meeting your customers' omnichannel expectations:
- Returns (for example, "I bought this online, but I should be able to return it in store.")
- Support (for example, "Why doesn't your chat work 24/7?")
- Inventory (for example, "Your site says this is in stock, but it's not on the floor.")
Any of these experiences will contribute to an omnichannel failure. When retailers consequently experience falling sales and revenue, they may attribute it to customers not wanting to engage with the various channel choices they provide. However, the fault lies in the retailer's failure to fully implement a holistic omnichannel strategy that makes for a fluid and positive customer experience.
Only customer-centric retailers can successfully implement omnichannel strategies. Those retailers use sophisticated solutions that help them not only understand customers' expectations, but also the technologies and processes needed to address them. Solutions around customer engagement, flexible fulfilment, and inventory visibility help retailers understand what their customers want and optimise their interactions so they can provide better customer service across all channels.