Today’s consumers are wired and connected around the clock. For example, in the U.S., more than 78% of U.S. households own at least one computer with internet access, and 87% of all adults own a cell phone.
For 45% the phone is a smartphone, and 31% own an iPad or other tablet. As these figures continue to grow, more and more consumers are accessing these devices for shopping intelligence; before, during and after purchasing an item. Switching between “channels” is becoming the new normal.
The modern path to purchase now incorporates online activities—including sharing and discussing the shopping experience with peers via social networking. These customer habits, coupled with heightened consumer expectations, are transforming the way retailers do business. The borders between online and physical are more porous than ever, if they exist at all. It’s no surprise then, that “Omni-channel” is omnipresent in almost every discussion about retail, or that so many merchandisers are hoping to increase sales and profit opportunities by reaching customers across multiple channels.
So, how do you deliver what wired customers want? According to Peter Sheldon, Principal Analyst at Forrester Research, modern-day shoppers want speed, ease and rich product information. Most importantly, they want to be able to locate and purchase the items they want, when they want them, with convenient options for delivery or pick-up. Increasingly, customers want to research and buy products online, then pick up at a local store branch—and they expect this crossover to be a seamless and personalized experience.
If you have already entered the omni-channel arena, or are thinking of doing so, these best practice tips, gathered from category leaders, can help you meet the challenges, satisfy customer demands and increase profitability.
1. Ensure inventory is available in all channels when the customer is ready to buy.
With customers moving freely from one channel to another, without inventory availability and visibility, you are operating in a single channel only. Let’s say the customer is ready to buy online, if the online store is Out-of-Stock, you’ll end up with an abandoned shopping cart. In addition to losing the sale and maybe a customer, your operation is also losing the cost of marketing the site and that merchandise plus the expense of staffing, and more. The customer no longer thinks or operates within one channel. Neither should you.
2. Be ready to fill orders quickly, from the desired channel.
Increasingly, consumers want to begin their shopping in one channel, and finish in another—and they do not want to wait. Back orders or delays may drive your customers to a competitor. Intensifying the operational challenges for the retailer, physical stores are becoming fulfillment centers, with the store’s online presence the “showroom”. In a recent Aberdeen Research study, 77% of omni-channel retail leaders said responsiveness for order delivery across all channels was crucial to the success of their omni-channel strategy.
3. Use a single system to manage all inventory and replenishment activities.
Research by the Aberdeen Group shows a strong link between inventory optimization and omni-channel success. A lack of visibility into inventory has proven to be a leading cause of lost sales, operational inefficiencies and other bottom line negatives. You have to know where your inventory is at all times in order to respond to consumers, see what’s selling where, make accurate forecasts and redirect replenishment. Using different systems for each channel creates information silos, rather than the information sharing required for customer-concentric service. Implementing technology that enables virtualized, “channel-neutral” inventory visibility can help save sales online and within the physical store. With a complete picture of inventory availability across all channels, store employees or help desk staff can locate an item that might be out-of-stock in one channel or store location, and either take the order immediately or provide accurate, up-to-the minute information about where and how the customer can make the purchase .
4. Leverage enabling technologies, such as RFID, for inventory optimization and visibility
With the ability to count thousands of items in minutes, capturing and transmitting large amounts of granular data in real time via a single tag, RFID is a power house tool for controlling inventory flow across channels. Item-level RFID can ensure inventory accuracy of 99+% with unprecedented visibility into your entire network of suppliers and distribution centers. You will always “see” precisely where each item is, and what is happening to that item, at any moment in time.
RFID has proven its effectiveness in maximizing operational efficiencies and boosting sales. Still, data from a 2012 RIS Gartner Retail Technology study shows that only 25% of retailers have up-to-date technology such as RFID in place for real-time inventory visibility and replenishment management.
If you are ready to maximize omni-channel profitability and success, contact Truecount today to learn more about the capabilities of advanced item-level RFID. Email success@truecount.com or call toll-free 1-800-403-7118.