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Retail’s Omnichannel omnichallenge


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Deloitte and Tulip Retail unveiled Retail’s Omnichannel omnichallenge, a survey that looked at the plans, perceptions and challenges faced by Canadian retailers.

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Retail’s Omnichannel omnichallenge

  1. 1. Retail’s Omnichannel omnichallenge Canadian retailers share their perspectives in a joint survey* by Deloitte and Tulip Retail * Based on 162 Canadian retail leaders who responded to a survey in early 2015.
  2. 2. Newsflash: A storefront is still critical On the consumers’ path to purchase, the decision to shop traditionally or digitally must be their own. While the digital age is upon us, respondents to our survey confirm the in-store experience remains an integral part of their business revenue. About 70% say that more than 50% of their sales come from their physical store.
  3. 3. Let’s get physical To accommodate the consumers’ changing path to purchase, retailers are reassessing their physical network to enhance their store footprint, appeal to local trade areas and improve their distribution channels. Still, 30% of respondents wish their organization would go further in improving their supply chain to enable a ship-from-store option for customers. Retailers are also investing more in customers...
  4. 4. The loyal treatment Canadian retailers are focusing on driving customer traffic to their stores and building long-term relationships for sustainable growth in all channels. 70% of survey respondents have loyalty programs, and 40% of those plan to spend more on these programs over the next 12 months. But there’s more to becoming Omnichannel...
  5. 5. Omnichannel’s bumpy road ahead Retailers have been taking steps – or, at least, thinking about taking them – to adapt to the changing business reality. Like any journey into uncharted territory, the path isn’t clear. Some retailers are also struggling with a lack of alignment between their strategy and the structures and processes they need to make Omnichannel happen. And it starts at the top...
  6. 6. The first challenge: who’s in charge here? 33% of survey respondents say Operations makes their Omnichannel decisions 19% say it’s IT 14% say Marketing 13% say Strategy 12% say Digital/eCommerce Retailers need to pay close attention to how their Omnichannel structure is affecting their customers’ experience...
  7. 7. Clear ownership matters Omnichannel decisions are made by different departments in different companies. It’s important that a solid governance structure and stakeholders from across the organization are identified and accountable. A lack of clear ownership can lead to cross-functional confusion, which splinters effort and slows progress. With leadership in place, what comes next?
  8. 8. Easy things first: measuring sales While determining store performance by absolute sales is still the preferred scale by far, more retailers are beginning to review each channel’s sales, and how they align to the Omnichannel strategy, as the best indicator of overall health. Here’s how they measure up: • 35% use absolute sales • 20% total channel sales, including mobile and eCommerce • 16% sales per square foot • 14% conversion rate • 14% average basket size But the cash register won’t keep ringing unless other issues are addressed...
  9. 9. If you snooze, you lose Our survey identified many challenges to improving Omnichannel capabilities. The top five are: 1. Budgetary constraints 2. Supply chain operations 3. Required IT investments 4. Resourcing limitations 5. Lack of marketing effectiveness And then there are the people on the front lines...
  10. 10. Retailers expect more of sales associates More than 90%* of customers leave without converting when they can’t find the right person to help them. Retailers know the floor staff have to do more – way more – than sell a product. Of the survey respondents: • 62% say the role of the associate is to build long-term customer relationships • 61% say they should give advice and recommendations • 54% say they should provide personalized services But they need to give more support to their associates... * TimeTrade, Retail reality check
  11. 11. Power to the frontline people Less than 40% of retailers who completed the survey have provided their sales associates with the mobile technology to enable them to effectively execute the in-store retail strategy. Their customers increasingly have more technology at their fingertips than their own sales associates do...
  12. 12. $ $ Pricing power to the people Thanks to digitization, consumers can easily compare prices and products. This makes competitive pricing a top threat for retailers. Close to 50% of those surveyed, in fact, say they now compete with Internet-only retailers through price-matching. And that problem is only going to grow as global online retailers accelerate the competition...
  13. 13. The Canadian advantage How will Canadian retailers counter the threat of global online-only retailers to their operations? By playing to their strengths. Here’s how our survey respondents say they’ll work to keep Canadian consumers spending at home:
  14. 14. Strategy 1 COMPETITIVE PRICING: Respondents see this as a key driver for winning, though caution is advised, since this strategy is only sustainable in the short term. Retailers must consider their target market and define a value proposition. To preserve margins they need to deliver greater value and should consider offering private-label products that allow for lower price points. 1 2 3 4 5
  15. 15. Strategy 2 KNOWLEDGEABLE IN-STORE SALES STAFF: Over 60% believe the role of sales associates is to build long-term customer relationships and provide advice. Technology that augments an associate’s training and acts as a sales floor reference with product, customer and store information, can go a long way to realizing this goal. 1 2 3 4 5
  16. 16. Strategy 3 DEFINE A BRAND EXPERIENCE: 53% believe that building a more recognizable brand will enable them to stay competitive with online-only retailers.2 3 4 5 1
  17. 17. Strategy 4 INVEST IN THE STORE OF THE FUTURE: 51% are deploying in-store initiatives to drive in-store sales, while 47% are planning ship-from-store distribution.2 4 5 1 3
  18. 18. Strategy 5 LEVERAGE ANALYTICS AND CUSTOMER RELATIONSHIP MANAGEMENT: Close to 30% of retailers are investing in analytics to build customer loyalty, and 22% would like to use analytics to improve business decisions. Greater investment should be considered as other industries realize significant returns from this data-centric approach to decision-making. Retail stands to benefit in the same way. 2 5 1 3 4
  19. 19. Bringing it home Retailers need to work harder to provide their customers with an integrated experience – a combination of physical stores, eCommerce, multiple effortless options for delivery and returns. They can aim to differentiate themselves by using digital and consumer analytics to build the in-store and brand experience and to personalize service. And the key ingredient for optimal Omnichannel is...?
  20. 20. Strong leadership. At the end of the day, a robust Omnichannel organization that delivers a superior customer experience across all channels is the only option for survival in the marketplace. And the best chance for that is with leaders who can reimagine retail with the consumer in mind.
  21. 21. Contact us to learn more: Jennifer Lee National Retail and OmniChannel Leader Deloitte Andrea Ng Senior Manager Deloitte Ali Asaria CEO Tulip Retail Marlon Rodrigues Head of Marketing Tulip Retail
  22. 22. Deloitte, one of Canada’s leading professional services firms, provides audit, tax, consulting, and financial advisory services. Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. © Deloitte LLP and affiliated entities. Designed and produced by the Deloitte Design Studio, Canada. 15-2969T