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What is Omnichannel Retail? Past. Present. Future.

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Omnichannel retail allows traditional retailers to connect their existing channels such as brick and mortar or call centers to digital channels - online store, mobile app, social shopping channels and others.

This presentation focuses on how this came to be, what are the bottlenecks in implementing omnichannel retail and why should retailers switch to this new approach.

Probably the most compelling reasons to adapt to omnichannel retailing are today's customer demands. The customer wants 24/7 service and the same experience on all sales channels, whether it is the offline store, the mobile app or the brick and mortar outlet.

Published in: Retail
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What is Omnichannel Retail? Past. Present. Future.

  1. 1. WE LIVE IN A CONNECTED WORLD A WORLD CONNECTED THROUGH THE INTERNET AND MOBILE DEVICES:
  2. 2. THEY’RE PRETTY USEFUL WHEN SHOPPING ALSO … WE USE MOBILE DEVICES TO CONNECT DIGITAL AND PHYSICAL EXPERIENCES. THOUGHTS, IDEAS, PEOPLE.
  3. 3. INSTEAD, A NEW MODEL EMERGES, COMBINING THE BEST OF BOTH WORLDS. THOUGH ECOMMERCE WAS EXPECTED TO REPLACE OFFLINE SHOPPING, THAT’S PROBABLY NOT GOING TO HAPPEN.
  4. 4. MILLENNIALS PREFER SHOPPING IN STORES AS OPPOSED TO SHOPPING ONLINE LET’S HAVE A LOOK AT THE NUMBERS: Source: "Who are the Millennial shoppers? And what do they really want?" from Outlook 2013, No. 2, an Accenture publication.
  5. 5. YET ECOMMERCE IS BOOMING Source: http://www.statista.com/statistics/272391/us-retail-e-commerce-sales-forecast/
  6. 6. AND AMAZON’S BUSINESS MODEL SEEMS LIKE A BETTER FIT FOR GROWTH… Source: http://netonomy.net/2014/06/23/amazon-vs-walmart-comparison-in-one-essential-chart/
  7. 7. SO WHAT IS HAPPENING?
  8. 8. WELL, CUSTOMERS LIKE TO PURCHASE IN STORES, BUT THEY DON’T ALWAYS DO THAT. BORDERS EMPLOYED 19.500 PEOPLE AND OPERATED 511 SUPERSTORES. IT FILLED FOR BANKRUPTCY IN 2011.
  9. 9. PEOPLE LOVED THE BORDERS EXPERIENCE, THEY LIKED TO TOUCH AND BROWSE THE BOOKS… BUT THEN THEY WENT ONLINE AND PURCHASED ON AMAZON. Source: http://netonomy.net/2014/02/06/biggest-retailers-closing-stores-important/
  10. 10. WE CALL THAT “SHOWROOMING”. HERE’S WHY PEOPLE DO IT:
  11. 11. IN THE FUTURE, THAT’S WHAT STORES WILL BE: SHOWROOMS. PLACES WHERE CUSTOMERS CAN EXPERIENCE PRODUCTS WHICH CAN BE EITHER PURCHASED IN STORE OR SHIPPED HOME. UNTIL THAN, TRADITIONAL RETAILERS FACE TODAY’S CHALLENGES:
  12. 12. CONNECTING SILO-ED CHANNELS: - STORES - ONLINE STORE - CALL CENTERS - MOBILE APPS - SOCIAL SHOPPING APPS … AND MORE LET’S SEE HOW DID THEY GET HERE:
  13. 13. THE COMPANY BUILT THE FIRST WALMART IN 1962 AND STEADILY DEVELOPED INTO WHAT IT IS TODAY BY OPENING STORES NEAR ITS CUSTOMERS. TODAY IT HAS MORE THAN 11.000 STORES, IN 27 COUNTRIES AND EMPLOYS MORE THAN 2.2 MILLION PEOPLE. THE COMPANY IS THE BIGGEST RETAILER IN THE WORLD WITH A REVENUE OF $485 BILLION. TO SUPPORT THIS GROWTH THEY’VE BUILT PROBABLY THE MOST INNOVATIVE SUPPLY CHAIN IN THE WORLD. LET’S LOOK AT WALMART’S PHILOSOPHY: “GET CLOSE TO THE CUSTOMER”
  14. 14. AND THEN AMAZON CAME ALONG AND BET ON DIVERSITY. “PROVIDE THE CUSTOMER WITH LOTS OF CHOICES”
  15. 15. Amazon offered more products than any of the typical brick and mortar stores could, because of the economies they had NOT actually stocking up on products.
  16. 16. NOR DID THEY HAD TO. THEIR BRAND WAS STRONG, THEY WERE CLOSE TO A LARGE MARKET AND HAD ADVANTAGES ONLINE PURE PLAYS DID NOT. MOST OF THESE HAD TO DO WITH BETTER PARTNERSHIPS, BETTER SUPPLY CHAINS, A BETTER DISTRIBUTION POLICY, AND MORE MONEY TO SPEND ON ADVERTISING AND MARKETING. BUT THE LIKES OF WALMART COULD NOT JUST CLOSE STORES AND OPEN ONLINE STORES ONLY.
  17. 17. MOST TRADITIONAL RETAILERS UNDERSTOOD THE IMPORTANCE OF ECOMMERCE. THEY DID NOT UNDERSTAND HOW IMPORTANT IS AND HOW TO MIX IT WITH THE OTHER CHANNELS. SO THEY’VE BUILT ADDITIONAL DIGITAL CHANNELS ON TOP OF EXISTING STRUCTURES. KIND OF LIKE THIS: WHAT THEY DID NOT HAVE WAS A CLEAR DIGITAL STRATEGY
  18. 18. THE RETAIL SILOS Brick and mortar silo Ecommerce silo Social media silo Call center silo Brand
  19. 19. HOW DO CUSTOMERS INTERACT WITH RETAIL SILOS? Brick and mortar silo Ecommerce silo Social media silo Call center silo Brand
  20. 20. THE OFFLINE STORES COMPETED WITH THE ONLINE STORES, THE ONLINE STORES REFUSED TO IMPLEMENT PICK UP IN STORES POLICIES AND … •  EACH HAD ITS OWN INDIVIDUAL INVENTORY •  EACH HAD ITS OWN PRODUCT AND CUSTOMER DATABASE •  EACH WORKED WITH DIFFERENT MARKETING POLICIES FOR EXAMPLE IT TOOK WALMART 11 YEARS TO IMPLEMENT A SITE TO STORE PICK-UP POLICY: HTTP://NETONOMY.NET/2015/04/22/3-STRATEGY-MISTAKES-BY-BIG-ONLINE-RETAILERS/ THE BIGGEST PROBLEM: MOST OF THESE SILOS WORKED INDEPENDENTLY AND OFTEN, ONE AGAINST THE OTHER.
  21. 21. THE CONCEPT OF OMNICHANNEL RETAILING WAS USHERED IN: IT PROPOSES AN UNIFICATION OF ALL SALES CHANNELS IN ONE SINGLE INTERFACE AROUND THE CUSTOMER
  22. 22. A NEW WORLD – MACY’S BET ON OMNICHANNEL “GROW THE BUSINESS AROUND THE CUSTOMER”
  23. 23. CROSS-DEVICE/ CROSS-CHANNEL
  24. 24. SHOPKICK GREETS CUSTOMERS AND OFFERS PERSONALIZED OFFERS
  25. 25. INTERACTIVE KIOSKS PROVIDE PERSONAL RECOMMENDATIONS
  26. 26. IN-STORE FULFILLMENT
  27. 27. RESULT
  28. 28. THE REASON MACY’S SUCCEED: THE CUSTOMER WANTS A 360 O EXPERIENCE
  29. 29. CONSUMERS LIVE IN A CONNECTED WORLD
  30. 30. CONSUMERS LIVE IN A CONNECTED WORLD
  31. 31. HERE’S WHAT A TYPICAL CUSTOMER JOURNEY MAP LOOKS NOWADAYS:
  32. 32. TO CATER TO SUCH NEEDS, RETAILERS NEED TO THINK BEYOND THE PRESENT SUPPLY CHAIN MODEL
  33. 33. OMNICHANNEL DEMANDS ADVANCED SUPPLY CHAINS, OPERATIONS AND PROCESSES
  34. 34. THE OMNICHANNEL SUPPLY CHAIN IMPROVES ON THE TRADITIONAL SUPPLY CHAIN:
  35. 35. Source: https://payhip.com/b/eiW4
  36. 36. WHERE CAN YOU START?
  37. 37. CHALLENGES IN ADAPTING IN AN OMNICHANNEL WORLD
  38. 38. MOBILE DEVICES AND MOBILE EXPERIENCES ARE CRUCIAL TO IMPLEMENTING OMNICHANNEL RETAILING
  39. 39. MOBILE DEVICES BRIDGE THE ONLINE/ OFFLINE DIVIDE, WORK GREAT FOR PERSONALIZATION, PAYMENTS, PURCHASES BARCODE SCANNING AND MORE:
  40. 40. Source: http://www.nielsen.com/content/dam/corporate/uk/en/documents/Mobile-Consumer-Report-2013.pdf
  41. 41. BEACONS WILL BE INSTRUMENTAL FOR RETAILER-CUSTOMER INTERACTION IN THE PHYSICAL WORLD
  42. 42. OMNICHANNEL PAYMENTS EXPECT OMNICHANNEL PAYMENTS TO HAPPEN WITH THE USE OF NFC-ENABLED DEVICES, ENABLING PAYMENTS ONLINE, IN MOBILE APPS AND IN-STORE
  43. 43. BIG DATA ANALYTICS / PREDICTIVE ANALYTICS By gathering data from all channels, it systems will shift from data gathering and analyzing to predictive analytics and prescriptive courses of action
  44. 44. QUESTIONS? CONTACT ME AT MIHAI.DRAGAN@GMAIL.COM DOWNLOAD THE PRESENTATION AT WWW.NETONOMY.NET

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