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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.
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.
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...
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...
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...
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...
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?
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...
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...
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
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...
$
$
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...
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:
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
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
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
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
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
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...?
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.
Contact us to learn more:
Jennifer Lee
National Retail and
OmniChannel Leader
Deloitte
jenniferlee@deloitte.ca
Andrea Ng
Senior Manager
Deloitte
andreang@deloitte.ca
Ali Asaria
CEO
Tulip Retail
ali@tulip.io
Marlon Rodrigues
Head of Marketing
Tulip Retail
marlon@tulip.io
www.deloitte.ca
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 www.deloitte.com/about 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

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Retail’s Omnichannel omnichallenge

  • 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. $ $ 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. 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. 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. 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. 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. 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. 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. 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. 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. Contact us to learn more: Jennifer Lee National Retail and OmniChannel Leader Deloitte jenniferlee@deloitte.ca Andrea Ng Senior Manager Deloitte andreang@deloitte.ca Ali Asaria CEO Tulip Retail ali@tulip.io Marlon Rodrigues Head of Marketing Tulip Retail marlon@tulip.io
  • 22. www.deloitte.ca 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 www.deloitte.com/about 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