Woke, new normal, hyperlocal, retargeting, sustainability, emerging technology, data… these random words are some of the top buzzwords that people and businesses love using and overusing today. What do you think is the buzzword in retail? You guessed it – Omnichannel.
As we now know, people are still getting drawn to stores, albeit for different reasons, while simultaneously e-commerce continues to see an urgent boom like never before. However, it’s the happy marriage of the two that retailers need to get right in order to embark on the true omnichannel journey that seems to be the success mantra of retail.
So what is Omnichannel? For a retailer, omnichannel simply means to be exactly where the customers want it to be with all the products and services they need at that point in time. So, if Mr. X discovers a sofa set online, but wants to touch and feel it in the store, get it delivered home after reading reviews online, and even return it without hassle with just the push of a button on the phone – that would be an ideal omnichannel experience. It basically is the blurring of lines between the virtual and actual world in an effortless way.
Now, one mistake that a lot of retailers make is interchanging the use of the terms multichannel and omnichannel. When the e-commerce surge happened and online retailers started calling themselves tech and data companies, having had the upper hand in understanding customers and personalizing recommendations, traditional retailers panicked and started setting up their own e-commerce arms. For some of them, just having a presence online with a functioning e-commerce website, meant that the job was done. Well, the only job done there is starting a multichannel approach. The main difference between multichannel and omnichannel is that the former refers to offering many channels for customers to engage in, such as social media, website, physical store, but each offering an independent and separate shopping experience. Omnichannel is all about providing an experience that is centred around the customer, where the brand (retailer) reaches them in the channel they prefer to offer a holistic seamless experience fueled across all available channels.
Recently UAE-based Lals Group announced the launch of the Mom Store, an experiential omnichannel retail concept with a view to expanding its omni-capabilities. The Chief Executive Officer of the group broke down what they got right and wrong in their whole omnichannel journey.
“When the lockdown took place it was very clear that whoever had the online selling platform had great inroads at acquiring the market share of retailers like us because they happened to be present and we were not,” he said. “Today all of our businesses are online. It took us about 8 months to get the testing, product and look right.”
In the wider Middle East, North Africa, and South Asia (MENASA) region, the UAE represents the biggest annual spend per online shopper at $1,648. Additionally, the UAE continues to maintain a healthy lead in average transaction size compared to both mature and emerging e-commerce markets. The average transaction value in the UAE was $122 in 2019-20, compared to $76 in mature markets, and $22 in emerging markets.
Clearly, consumer behaviour and demands were changing, and it was an indication that traditional retailers also had to step up their game in order to survive.
“I think organizations like us suffer from antiquated, latent technology platforms – processes that are historical. Getting the right people that change processes, giving them the cart blanch to make those changes, and setting up specific logistics facilities that service the omnichannel platform are important. If you try and paint a fresh coat over the old processes and believe that you can succeed in the digital world, that won’t happen,” he confessed.
For Ganwani, it isn’t about the buzzwords or even just getting there for the sake of being there first. Considering the whole idea behind omnichannel is to provide the best possible experience, it was important for Lals Group to make sure the back-end was in place before making the digital move.
“Before we opened the businesses we actually bought logistics facilities, set up the testing for goods to be delivered and returned to people. Because doing it from our traditional brick and mortar warehouse would have been an absolute disaster,” he said.
Also, it is worth noting that retail is drastically change compared to what it was a couple of decades ago, and it is evolving at a pace unseen before. Earlier retail was all about the location. Today, location is where the customer is and not where the store is.
“Location has become redundant in today’s world as you can reach the consumers’ house. Service and timeliness have become extremely important. Your ability to engage with the customers about their likes and dislikes has become important. The industry has circa 18% to 20% return rate, which is a costly exercise for any retailer. We aren’t successful in achieving our goals until we are able to reach the consumer’s home and your return rates come down,” he said.
Moreover, it’s all about the extra mile (last-mile too), where retail teams need to go above and beyond to meet the customer’s heightened expectations. “We need to know where the customer is traveling, which brand he/she is experiencing in their lifetime. For example, if they like something in Argentina, Taiwan or Australia, a retailer is obligated to find that collage of products and present it to the consumer and that’s something they have to do effectively,” he explained.
The struggle of getting omnichannel right isn’t just limited to this region though. Apart from the likes of Apple, Best Buy, Burberry, and Zara, not a lot of retailers globally have implemented their omnichannel strategy to a T.
With the rapid change in consumer habits and behaviour, retailers need to note that customers aren’t just making their purchasing decisions in-store. “Purchasing decisions are made at every touchpoint that customers can reach the brand, check processes, read customer reviews – on mobile apps, websites, social media, and actual physical stores. This requires retailers to be available everywhere and across all channels,” said deVere Forser, Chief Operating Officer at Dubai CommerCity.
Click-and-collect is great but it can’t be the only omnichannel strategy that retailers implement to retain their now more educated and aware customers. Forster breaks down some of the core offerings that can help retailers up their omnichannel game.
“First, customers need to be able to check the availability of the product in-store ahead of their visit so it’s not a waste of their journey”.
“They also should be able to return an online order to a store for an instant exchange or refund,” he said. Currently, customers are either expected to drop their online order in the physical store for it to be exchanged or refunded or they end up waiting weeks for the transaction to be completed online.
Thirdly, the option of reserve-and-collect needs to be implemented seamlessly. “This means an order can be placed online and it will be paid for in the store. This allows a customer to select a product without paying for them upfront; check out the item in-store and only pay for them if they really want it. This is important for fashion and beauty,” he explained.
Endless Aisle, which is being implemented by some of the retailers in the region, is another facility that customers today need to have access to. “In-store customers expect to be able to place an order for an out-of-stock product. Here the online store can support the physical store with a full assortment catalogue,” he said.
Since these are services that only physical retailers can offer, it gives them an upper hand compared to the pure-play e-commerce players. Customers today are also looking for more flexibility and channels that they can shop from. Social media platforms like Facebook and Instagram and instant messaging channels such as WhatsApp and Messenger also help with the process. “These platforms allow for more personalized shopping experiences where customers can interact with the salesperson asking for advice or recommendations,” he said.
Apart from that, integrating high-end technology within the store to enhance customer experience and their shopping journeys is also key to moving forward in the omnichannel realm. Smart changing rooms, displaying customer reviews, comparing products and the ability to be able to scan-and-buy and use self-checkouts so they don’t need to stand in long queues, are tried and tested concepts in improving the region’s retail ecosystem.ed to be in Department stores. But the concept of a department store is beginning to fail whether it is the UK high street or 5th avenue in the US. I think we are going to see in the future where like-minded retailers that offer complementary products to each other, collaborating to create larger retail experiential environments. I think a superstore that has complimentary products by 3 or 4 retailers would work. I think it would translate into better rentals for people, more staff efficiency, common marketing platforms. You don’t need a marketplace for everything. If you have a good enough operator that has everything in a single journey, I think you will have space In this world. Collaboration will increase by necessity. Retailers and shopping mall owners are all talking to each other to figure out what’s the best use of their money.
Department stores do not give the brands the identity that they want. Consumer brands have come back to realise that in a department store they don’t capture enough data, consumer’s journey, loyalty etc. In Dubai, every brand has a boutique of their own and they end up being present in a department store. Sometimes it’s counter productive and dupliticent.
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