January 31, 2014
When it comes to meeting consumer expectations, the stakes for retailers have never been higher. Digital age consumers are more discerning, have high expectations for the quality of product information and use technology in a variety of ways to make educated purchasing decisions. They use search engines to get more information about a product or brand. They comparison-shop online. They visit manufacturers’ websites. They read online endorsements, reviews and recommendations. Given this reality, retailers need to focus on their omnichannel strategy and strengthen their capabilities to deliver the desired product into the hands of customers wherever they are, or risk losing sales.
Research conducted by Ipsos OTX and Google after the 2012 holiday shopping season found that 51% of consumers researched online then visited stores to make a purchase. Forty-four percent researched online befor buying online, 32% researched both online and in person before buying online and 17% researched in person and then bought online.
These findings illustrate the need for industry to get ahead of consumers to serve them well and create lifelong loyalty. Many companies have started to successfully embrace omnichannel retailing, in which the walls between brick-and-mortar stores and online shopping have been broken down. Using omnichannel strategies, retailers essentially deliver a seamless fulfillment experience for customers who require a fast and easy shopping experience, and expect the retailer to anticipate their needs and preferences.
Some retailers are excelling when it comes to omnichannel. One of the secrets to their success is recognizing that the interdependency between consumer-facing operations and supply chain practices is crucial for aiming high and achieving omnichannel fulfillment goals. An efficient omnichannel operation includes placing an emphasis on unique product identification and accurate attributes, as well as customer preferences, purchase history and paths to buying decisions and purchasing. Simply put, omnichannel fulfillment is about knowing what a retailer has, knowing that it’s available and following through on promises to the consumer.
There are many benefits to this approach. Consider the following example, published in a research paper in MIT’s Sloan Management Review this summer:
Tasmia Kashem, a resident of Burbank, California, went to the Beverly Center mall in Los Angeles to shop for shoes. After browsing at Nine West, a fashion retail chain store, Kashen didn’t see anything she liked. As she was leaving the store, an associate offered to show her additional collections on an iPad. Upon scanning through the online offerings and reading reviews, Kashem decided to preorder a new style that was arriving at the store the following week. In this example, the retailer’s omnichannel approach turned a “walk out” into a sale. In the process, they also probably gained a repeat customer.
For omnichannel retailing to work in this way, retailers need to be aligned with their suppliers, distribution centers, logistics providers and stores. What makes omnichannel retailing possible is unique product identification and a standards-based approach to business processes across the supply chain – from warehouse operations, to inventory management, to consumer-facing applications. Standardized product information, including extended attributes, is exchanged not only with trading partners, but also with the consumers whose buying behavior is heavily influenced by digital information. Armed with complete and accurate product information, retailers can prepare their systems for product sales on a repeatable basis no matter where it comes from.
Better data means better inventory management – an essential piece of an omnichannel strategy. Macy’s is one leading retailer embracing this concept. After a recent investment in its fulfillment operations this year, two-thirds of Macy’s stores are equipped to effieiently ship online orders as well as orders from other stores, trimming inventory and getting items to customers faster than ever.
However, not all systems operate this way. The use of varying product identification standards and proprietary systems by different companies has created inconsistencies from trading partner to trading partner. These inconsistencies result in flawed, incorrect and out-of-date product information that frequently leads to negative user experiences. Global research conducted by GS1 revealed that 74% of consumers surveyed consider it important that product information is trustworthy. Thirty-eight percent would not purchase the product if they did not trust the product information displayed about it on their smartphone, and 35% would never use an app that contained untrustworthy information again.
In addition to accuracy and consistency, better consumer data also promotes better targeting and greater knowledge of consumer needs. Retailers can take advantage of more detailed product and consumer information to provide purchase recommendations in much the same way as online retailers or other online shopping organizations that use previous purchase information and customer preferences.
Today’s smart, connected consumer can be a boon for retailers seeking better targeting and deeper relationships. Standardized data and reliable product information helps businesses communicate with their partners efficiently to the ultimate benefit of both the industry and the consumer. Forward-thinking retailers should consider adapting to the savvy shopper and embrace universal product standards – or risk being left behind.
Source: Retailing Today
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