Trends From NRF: Omni-Challenges & Omni-Opportunities

By Karisse Hendrick, Editor-at-Large,

Get Better in 2015 "Omnichannel" is a term that gets thrown around quite a bit—especially at this week’s National Retail Federation (NRF) Big Show in New York City. Omnichannel seemed omnipresent on the NRF’s two massive expo floors with vendor after vendor seeking to provide retailers with the technology that will enable a modern customer experience. But, omnichannel means more than just accepting orders in your physical store, online, through your call center or via a mobile device. Luckily, it emerged as a theme in several sessions, as well, with experts to guide omnichannel neophytes looking to be educated on what it all means.

At one of those panels, Tom Cole, partner at retail consulting firm Kurt Salmon, described it like this: "Omnichannel is defined from the customer’s point of view. It is a seamless experience: the same products and services, engagement capabilities and level of service, regardless of the channel that the customer purchases on."

The reason most retailers who traditionally have siloed their retail store, e-commerce, m-commerce, and call-center environments now are racing to provide an omnichannel experience is because "the customer is the boss," said R.B. Harrison, chief omnichannel officer for Macy’s.

"We need to meet them with what they want or they will go somewhere else that does," Harrison said this week. "It’s not the customer’s issue if your stores are one organization and digital is another. The experience should be blended to be seamless. This provides value the way the customer wants it."

The number of ways an omnichannel experience can touch a customer is rapidly expanding. A true omnichannel capability allows them to buy an item online and either pick it up or return it at their local store without any issue. It also can mean faster delivery because the item can ship from a store a few miles away from the customer, rather than the company’s warehouse a few states away.

An option that has been well received by customers of clothing retailer The Limited, is enabling a customer to reserve an item online, but purchase in the store. Dianne Ellis, President and CEO of The Limited, said this method has provided an opportunity for sales associates to suggest additional choices that may go with the item reserved online, increasing the dollar value of the transaction. 

Harrison and Ellis said mobile traffic is increasing exponentially. And, while this does create a new channel for purchases, they are also seeing some customers use their phone or tablet to browse, but then make a purchase either in the store or through traditional e-commerce on a PC. This demonstrates the importance of having the customer experience be the same no matter how the customer first engages with a company.

In addition to purchases, mobile and the access to more product information than ever before has changed the interactions a customer has with associates at an in-person location. 

"Customers have an expectation that store employees will be more educated on products than they are," said Brent Kirby, chief omnichannel officer at Lowe’s. "We now have an employee app with even more product and [home improvement] project information to at least match the knowledge of our more informed customers."

While the idea of omnichannel seems like retail utopia, the road to achieving this seamless shopping experience can be bumpy. One of the most important issues a company has to face, beyond technical integrations, is the act of blending the parts of the organization focused on physical stores with the departments focused on other channels, such as e-commerce, mobile and call center.

"We need everyone to be change agents," Ellis, explained. "Each channel plays a unique role to meet the needs of the customer. Everyone needs to acknowledge that."

One of the ways that companies are embracing their commitment to a new way of running their business is by appointing a chief omnichannel officer. Cole said Kurt Salmon recommends the person selected for this role "has had experience in various areas of the business, shows commitment to the business, has a passion for the business and recognizes that truly embracing omnichannel as a strategy is a journey." 

A corporate strategy for encouraging customers to engage with their company across multiple channels is not enough. It needs to be adopted and carried out by everyone in the company, especially those who interact with customers in person. Some companies have failed at this level due to push back from store associates, especially those whose compensation is based on commission or store performance.

"Our customers who master an omnichannel experience for their customers are ones who incentivize their store associates to encourage orders placed online or via mobile devices," said Zeke Hamdani, director of Web services for retail management software provider Celerant Technology Group. Hamdani also noted another challenge that some store associates first face is "learning how to pick, pack and fulfill orders placed online or through a mobile app [for in-store pickup]. The best practice we advise for this challenge is to train your store associates in this new skill and to ensure that the inventory management software allows the corporate office the ability to track fulfillment in real time."

Merchants that want to implement a true omnichannel strategy also should consider combining P&Ls or consolidate accounting, use the same inventory management system and process for all inventory—in stores and warehouses—and also to ensure that the onsite language and overall engagement with the customer remains consistent and complementary across all channels.

In the end, the changes necessary to realign a company’s strategy so it can provide the customer with a seamless experience can have an unintended benefit, according to Alexandra Firth, marketing director of Folsom, Calif.-based retail management software provider Retail Pro.

"[It results in] companies becoming much more efficient overall, because they are reevaluating [sometimes legacy] processes and understanding the impact that these processes have on the customer across all channels. Only looking at a single channel at a time provides you with a single view of the truth and a single view of your processes as well as your customers."

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