A commissioned study conducted by Forrester Consulting on behalf of Accenture Interactive and hybris software reveals a disconnect between what consumers wan…
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Not to be content with creating the showrooming movement, Amazon recently announced it will start making deliveries on Sundays (possibly by drones). While this service will initially be available in just a few cities, it’s just a matter of time before it becomes commonplace across the U.S. But why should this matter to retailers? And, more importantly, what can they do about it?
Amazon has always captured the consumer through experience, price and convenience; with this new offering, the company will now be delivering speed – and enhanced convenience. Amazon has its finger on the pulse of not only today’s shopper, but also tomorrow’s customer. Amazon is slowly chipping away at the frustrations of shopping.
While fear is a natural reaction to Amazon’s business model (and indisputable success), it’s the wrong response from retailers. If retailers want to have a fighting chance, they need to regroup, educate themselves and take…
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I have recently started renting an apartment down in Melbourne (more about reasons for that later) and decided to try and order everything I needed to furnish the place online. I didn’t really have the time or the transport to do anything else anyway.
Well, what an interesting experience! As a customer, my experience ranged from awesome to really disappointing. One thing that really stood out for me is that there are online retailers that really get what online retail is about and plenty who still have no idea!
First up the awesome online retailers, who really get it. I bought my bed and mattress from online only specialist OzMattress on a recommendation from a friend who handles their social media. The whole experience with them was fantastic. Starting with their website, which was simple, easy to use and easy to understand their products and the differences between each. They only make 3 types of mattress – so it was a piece of cake to make a decision. Delivery was a breeze, they contacted me with a day and time range (2 hours) then a call from the driver on the morning of delivery and a call when they arrived at my apartment, so I could let them in. They unpacked the bed, set it up carefully and took away the packaging. When the pillows I ordered didn’t arrive with the bed, I got hold of them on online chat and they fixed the problem straight away, couriering a new set to my work that day.
I bought a fridge from Appliances Online, also online only – who really get it. Same level of of great service, they contacted me about delivery, delivered when they said they would, unpacked and set up the fridge, plugged it in and took away all of the packaging.
At the other end of the scale, there are still plenty of online retailers who don’t get online retail. It is not just about setting up a website, getting some product and selling stuff cheaply online. Being online is about the total customer experience from placing the order to getting the product delivered.
I bought a sofa, barstools and TV stand from a nameless online retailer who thought it was just about selling stuff cheaply online. Firstly they were out of stock of the barstools, so that was refunded, well OK that I can accept. They had outsourced delivery to (various) transport companies, who didn’t really care about customer service. So when the sofa was first delivered, I wasn’t there to let them in as no-one had contacted me to arrange delivery. When I contacted them about the attempted delivery they demanded that I organise for two people to help unload the truck, as there was only the truck driver on the truck. It was also impossible to get the driver to phone me when he arrived, so that I could let them in. The other item I had ordered had disappeared.
On following up with the retailer, I discovered the missing piece was dispatched with another transport company, who (after another call) I found had also attempted delivery a week earlier and they had been given the wrong number by the retailer and hadn’t been able to contact me about their attempted delivery. Anyway after about 6 phone calls, 2 weeks and endless frustration I finally got everything that I ordered.
This online retailer thought that outsourcing delivery to various transport companies would no doubt be the most “efficient” and “cost effective” approach. However, they totally failed to understand that the customer experience with them is only complete when the goods have been received by the customer. The poor experience I had, even though it was well after I had placed the order, was still with the retailer in my mind – not the transport company.
Online retailers must understand that that they can’t outsource customer service to transport companies who are just in the business of moving stuff around, service is still their responsibility until the product is finally delivered.
Amazon is not a commerce company at all. It’s a big data company that has developed a cloud infrastructure that is profitable and subsidizes its retail operations.
There have been a few articles around recently warning retailers not to rush into multi-channel or omni-channel retail, given the differences in the model and challenges in distributing product. In fact, one commentator who I admire and normally agree with on most things labeled “Omni-channel is a pipe dream”. In the article he states retailers should focus instead on “being the best physical retailer there is”, and “Just because everyone is doing it doesn’t mean that it is right for you”.
Whilst I agree with the sentiment expressed above, the article misses a fundamental point. That is retail is undergoing a massive structural change which is being driven by a move by consumers to shop online and on mobile devices. Retailers who don’t respond to the change will indeed be in danger. Just doing more of the same, better – will not work with structural change. Retailers need to respond to the change or face the prospect of being left behind or worse.
In a report titled “The Future of Retail – Consumer adaptive retailing” the authors from PWC and Frost & Sullivan state “Online retail is now embedded in consumers behaviour and will force changes to the traditional retail operating mode; those retailers that do not move to the new model will not survive.”
A new approach is required, which is hinted at in the PWC report. It is an adaptive and agile approach to utilising technology to implement a new responsive business model which addresses how consumers will be shopping in the future. This model is characterised by new open, cloud based offerings covering all of the retailers customer facing systems (in store, online and mobile). Structural change is not going to be addressed by just putting up an online store (ticking the multi-channel or omni-channel box) and hoping that it will work.
Re-visioning all of the retailers customer facing systems is required; from in-store Point of Sale, to an integrated Online Store and Consumer Apps for smart phones and tablets. All these customer facing systems should be integrated, sharing the same cloud based back-end pricing and promotions engines and sharing all customer information and insight from each of the channels. This will provide in-store staff with the tools and information in their hands (with mobile Point of Sale) when customers first enter their store, letting them know what the customer was interested in and discussing online and on their mobile device before they arrived.
Retailers must give customers the convenience and flexibility to shop the way that they want. The flexibility to browse online, on mobile or in-store; to buy online, on mobile or in-store; to pick-up in-store or have delivered and provide ongoing after-sales services for returns and refunds so that the customer has confidence to shop when, where and how they want. All with the same great, consistent customer experience of course.
Technology is driving structural change in retail as it is in other areas of life. It is disruptive change, the fuse is short and the bang will be big for retail. For retailers to survive the structural change they must also respond with technology – focusing on how the customer shops, now and in the future to ensure customers have the consistent, convenient experience across all channels.
So is Omni-Channel the answer for retail? I think it is definitely part of the answer, the full answer is to ensure that the customer experience is consistently great, where ever and when ever they shop that will keep them coming back for more.