Online shopping from the comfort of our home is no longer a retail trend. It has become part of our everyday lives. Smart mobile devices also shape new consumer behaviors. As a consequence, we observe a traffic reduction at the physical stores and an increase in all forms of online commerce.
According to a survey conducted by Ernst & Young and the Consumer Goods Forum, by 2019 sales inside the stores internationally will grow only 5%, while online sales will reach and surpass an increase of 15%.
Customers today have new specific behaviors when they make their purchases:
In the physical store, we observe consumers using their mobiles trying to learn about the product that interests them and make price comparisons. Acting in this way they can either "bargain" the price or choose another place for their purchases (showrooming). At the same time, consumers wish to buy at internet prices, demanding from the merchant a uniform pricing policy. Of course, they demand to shop from any available channel and also keep the possibility of payment via their mobile.
So, every retailer that has a small store in the neighborhood, but also one that has a chain of stores or the responsibility of an entire shopping center, must change his point of view, to survive commercially in the new environment.
The customer and technology drive the progress and the business owner should follow.
These recent developments have been named Everywhere Commerce or Multichannel or (as the dominant term is) Omnichannel.
In practice, this means that a company develops its brand through multiple digital and non-digital channels and platforms, such as physical stores, online stores, mobile phones, catalogs, call centers and virtual stores in public places. The customer has the ability to make purchases through a sales channel network, choosing how to carry out his purchases.
For example, a consumer may conduct research online, choose and order the product of interest through an application on his mobile (Click & Collect), receive the good from the physical store and return it to the merchant via the website or follow any other path (Journey) that he wishes until he reaches the acquisition of the desired product. In all these stages (Touchpoints), the buyer wants to enjoy excellent service and a single shopping experience. It is clear from the example, that the retail market is becoming increasingly complex and the relationship with the online e-commerce, inescapable.
It is necessary to be cautious, as most merchants in their efforts to meet the increased needs of the Omnichannel market often fail. Retailers create an online store to promote sales or a mobile app which work independently from their physical store. This is not enough for a successful approach.
Four Steps to Success
A. Consolidated Services
The priority of the business owner should be to offer the buyers with integrated services at all stages of Omnichannel selling - search, ordering, payment, shipment and delivery of product; among all available channels that promote the products, providing flexibility on ordering and additional transactions. Moreover, the online stores created should be accessible from any device and be optimized and responsive.
B. Consumer Centric Approach
To achieve an effective Omnichannel commerce a consumer centric approach is necessary, which is achieved primarily by the following practices:
- Segmentation, Targeting, and Positioning. Segmentation divides the market into smaller groups with the help of reliable market research, online behaviors, demographics collection, buying behavior profiles and personas. Targeting comes next for the selected market, building efforts to the most likely groups that potentially will buy the products. Finally, using positioning we achieve the creation of a more accurate “picture” of the product for the consumer. This method will help the business owners to focus on the appropriate potential buyers, giving them the right information and save valuable time and money that would otherwise be wasted on unnecessary and ineffective advertising.
- Business Analytics. Gathering of information for each individual consumer behavior, either through offline information systems (CRM, etc.) or as a result of check-in data collection provided by a mobile app is essential. A prerequisite in this case for the merchant is to provide the buyer with the necessary data privacy. Incentives should be provided to buyers so that they use a check-in type of transaction at the physical store. The principal motive for every potential buyer is to achieve the lowest price. A buyer wants to buy at the lowest price usually found on e-shops, although he is at the physical store.
- Beneficial use of Social Media. The role of the social networks is proved decisive towards the consumer-oriented approach, which helps to build a relationship of immediacy and interaction between customers and business owners. Social networks do not bring results when the communication is in a one-way direction from the merchant to the consumer. Instead, maximum benefits are achieved when consumers can propose, co-create, modify, share and discuss with each other and with the business owners.
In consumer centric approach every information is valuable, providing for a targeted product offering and specialized customer service, driving the retailer to a leading position against the competition.
C. Personalized sales strategy
Every retailer needs to focus on the key aspect that makes the business really unique and distinguishes it from the market. Retailers must develop a personalized strategy of physical and online sales through multiple well-integrated platforms. The principal ingredients for success are proper market research, sales and marketing plans, company branding, successful products with the proper launch in the market.
D. New technologies and know how
It is an increasingly frequent phenomenon, to observe customers entering a physical store and make online search and price comparison for the product they are interested. At this degree, a consumer knows more about the product through online shopping than the store personnel who helps him make the purchase. On physical store sales, therefore, the retailer must equip the physical space with new technologies and train the store personnel with the appropriate expertise to support digital means of transactions. A pioneer of this idea is the fashion house Burberry in London, where sales personnel display the goods on an iPad, but also on huge screens which turn into mirrors, and finally carry out transactions with portable credit card point of sales terminals, as there are no cash registers in the store. The results of this strategy are indeed impressive as Burberry's increased their sales by 300% from £700 million in 2005 to £2.5 billion in 2014.
In summary, we could say that the main focus of the business owner that wants to establish an increase in sales, is to offer to consumers a multidimensional experience through custom made services and products that meet the individual needs. Easy and flexible purchase options should exist in whatever environment buyers choose to use, motivating them through incentives and maintaining for them their personal data protection.
A wind of change is sweeping at all levels (disruptive innovation). The music industry has been disrupted by youtube, the book publishing increasingly is replaced by online publications, the same holds for newspapers and magazines. Everything changed in the field of photography and printing.
The same sweeping wind is now blowing in the retail space. The Omnichannel retailing is no longer "at the door", but dynamically invades our lives and those business owners that capitalize early, will have the opportunity to create long-term, mutually beneficial relationships with consumers.
An ITGuruClub original post.