Optimization of omnichannel is the new trend, especially at the start of the customer journey. Based on an industry study, almost 90% of retailers have an omnichannel strategy in place, but only 8% have mastered it.1 Omnichannel has seen some tremendous growth with companies like Home Depot driving half of their business through either Buy Online Pickup in Store (BOPIS) or Buy Online Ship to Store (BOSS) solutions.2 Retailers already accept the growth value of omnichannel through increased customer interest and convenience. This translates into real returns. Omnichannel customers show 13% greater in-store spending. A Harvard study shows that omnichannel customers make 23% more repeat shopping trips within 6 months of an omnichannel experience.3
To enable omnichannel, however, requires a value investment in software, people, and process. Optimization across solutions has become the new mantra for retailers offering omnichannel. According to a Senior VP at a major national retail firm in the US, “Optimizing omnichannel is critical, and labor is the linchpin. For instance, up to 1/3 of Reserve Online Pickup in Store orders are abandoned. For associates, it used to be pick lists, now it’s devices in the store to make it fast and simple. The associate needs to manage the [post-order] time window and then restock items for no-shows.”4
The ability to integrate the capabilities of the online and physical environment remains important and optimization of these capabilities makes it profitable. So how are retailers tracking omnichannel improvements? The basic metrics fall into current digital metrics like Conversion Rates and Average Order Value (AOV), but the best retailers are also looking at the omnichannel order or sales ratios that define what % of sales are omnichannel. Hard goods and DIY retailers are heavily influenced by such selling, while apparel and luxury are impacted by the client-focused nature of BOPIS – including the ability to service the customer wherever they are, such as clienteling and same day delivery capabilities. The integration of omnichannel into the customer’s stream of consciousness means both front end and back end development. This is where the best platforms and strong integration makes a difference. Optimizing the omnichannel experience will mean building a solution that works across all channels.
For omnichannel, most retailers concentrate first on the fulfillment component, but the front end matters too. 88% of customers start their journey with online research.5 This is the first impression to the customer on engaging the brand and it can set the stage for a strong omnichannel process, or conversely, a weak experience and disinterest in a retailer’s omnichannel program. The rapid adoption and convenience offered by omnichannel demands a strong front-end rollout.
Commerce platforms that design for a modern, optimized omnichannel experience must consider three key front-end functions that are omnichannel specific:
1. Product availability for pickup or delivery: Your website has to be able to tell the customer what’s available for delivery and what’s in the store. This is the penultimate experience expectation – and the lack of it will translate into backlash for that customer who decided to visit the store only to find an out-of-stock. This includes pick up dates and times, and allowing the customer to select their preferred timing. Oracle’s Commerce Cloud’s most recent release builds this capability into an out-of-the-box solution.
2. Shipping Options for BOPIS: Multishipping, shipping details including date and time, and shipping groups becomes important for optimizing omnichannel. Determining the pickup status of a product tied to these options, including split orders, are critical to the customer who ordered online. Oracle Commerce Cloud expands standard shipping options giving shoppers the ability to search for a store with the item in stock.
3. Payment Options for BOPIS: Enabling In-store payment for items ordered online provides the customer the ability to aggregate all their products in one place and pay for their order in the store. When integrated with a POS tool (like XStore), it becomes a seamless engagement for the customer. The customer can set up purchases online, and expand their purchases once in the store. This also means managing split payments and combining with complicated loyalty and gift reward combinations. Oracle’s omnichannel product suite can simplify and integrate the payment side for retailers.
With a solid synchronization of front and back end experiences, the customer will have the ability to engage with the brand, and retailers will be able to find real growth in sales and customer loyalty.
4Interview with SVP executive of major National US Retail Chain (requested to be anonymous)