Last year, the term “omni-channel” continued to be a part of many conversations in the online retail industry as brands evaluated their current and future organizational strategies. Believe it or not, there is now even a tradeshow specifically to discuss omni-channel commerce which may signify the term might have officially moved out of “buzzword” status. But what is the future of omni-channel commerce in 2015 and how will it continue to evolve? Here are 7 omni-channel trends in 2015 to watch for…
1) More brands feel they are “lagging behind” in omni-channel – If your omni-channel strategy isn’t among the elite, don’t fret because you are not alone. In a recent study by SPS Commerce over 37% of businesses feel as though they are still exploring their omni-channel options and have not developed a long term strategy. This percentage is up from only 29% last year and these numbers likely indicate omni-channel commerce is moving at a pace that is becoming difficult for some brands to keep up with.
2) Omni-channel partnerships are becoming more viable and frequent – The speed at which omni-channel commerce continues to grow is being led by consumers and continues to move faster than some brands can handle. Partnerships are often pursued to meet consumer demands and can result in the need for specific internal personnel to manage the integration and relationship of partner programs for their omni-channel solution ecosystem. Some companies are even looking at their competitors to understand their next steps in omni-channel commerce and how to prioritize their growth in this area of their business.
3) Cross-department collaboration is becoming more critical – Omni-channel commerce has become much more complex and thus more employees from different departments are involved (sometimes reluctantly). Brands are looking for more employees with backgrounds in multiple functional areas (i.e. an employee with IT and digital marketing experience) to lead their initiatives. These employees position the company to effectively communicate across the organization and with their partners to support the entire technology ecosystem. This can help to break down silos in an organization and improve communication internally – an important tool as software, technology, and systems continue to evolve in the coming years.
4) Consumers are starting to prefer NO interaction with sales associates – A recent study by Deloitte stated consumers would not only rather find information themselves on their smartphones to assist their shopping experience (i.e. looking up prices, item availability, product information, in-store item location) but would also prefer to use unmanned in-store devices such as kiosks and digital displays. Data from comScore also agreed with this conclusion as showrooming continues to rise (up 4% from the previous year) and is nearing 50% of all smartphone users. Another telling insight for the avoidance of sales associates relates to a recent study by the e-tailing group where the most important omni-channel feature for consumers is to check the availability of products before visiting the store. This is likely due to consumers not wanting to “waste” a trip to the store if a product is unavailable but also likely factors in the need to find and ask a sales associate for product information.
5) Online-only brands seek physical stores – With consumers preferring not to deal with traditional sales associates and the closing of large traditional brick and mortar retail chains, some large online-only brands are currently pursuing store locations to create an omni-channel presence. With less staffing requirements needed than in the past, this tactic is a reversal from the more traditional omni-channel path of linking traditional physical locations (often founded before online sites) with an online presence. The interest in these locations also shows that these stores still hold long-term value in the retail industry. The brands pursuing stores likely understand that within the retail industry fewer sales are coming from “store-only” visits where a consumer walks into a store, finds a random product, and purchases it on the spot. Instead, there is an increase in online interactions (the expertise of these brands) playing at least some role in the purchasing process. According to Forrester Research, “story-only” sales accounted for $1.6 trillion in sales in the U.S. in 2012 but are project to account for just $1.4 trillion in sales by 2017.
6) Dynamic pricing through omni-channel data – This is an opportunity for brands, especially with an existing large online presence, to make more money and increase customer satisfaction. Dynamic pricing is a newer retail trend where prices fluctuate based on consumer demand, similar to hotel and airline rates. By monitoring both product supply and demand in real-time through automated technology, dynamic pricing can boost online prices (and also in-store, although this is less common) when demand is high and inventory is low or can decrease online prices if inventory is high to move product for optimizing warehouse and store shelf space. Some large brands already change prices several times per day based on the demand of their own products.
7) B2C omni-channel expectations are starting to move into B2B – With higher demands placed on price and immediacy throughout the shopping experience, traditional consumers aren’t the only people looking to make smarter decisions. More purchasing agents and product procurement professionals across multiple industries have become more familiar with the omni-channel experience over the past year and are now expecting a similar offering from their B2B suppliers. Automation of omni-channel operations, such as ship-to-store and a well-functioning in-store pick up solution, are becoming more common requests for some B2B suppliers with or without an omni-channel presence. According to StellaService, 58% of the time spent in the store during an in-store pick up is actually spent at the checkout desk. This has led some brands to allow their customers to schedule a pick up time and create a dedicated in-store line specifically for these people. This tactic can help decrease time spent on an in-store pick up (a concern for B2B suppliers) and can make the process easier for both customers and brands.
In conclusion, omni-channel commerce has taken some unique and unexpected turns from just twelve months ago. As growth continues to move at a fast pace, some brands will likely look to partnerships to keep afloat and evaluate their current strategy (especially in physical stores). Moving forward it will be interesting to see how the large online-only brands increase or start their brick-and-mortar footprint as well as the evolution of omni-channel commerce for B2B companies.