In the old days of retailing, retailers would decide when they want to go to their shop and once the shop is opened, then the customers can come in and do their shopping. This was the so called Single channel retailing.
From the last 7 years or so, in additional to the shop retailing, we have Multi-channel retailing where customers could access catalogs and order by phone or by mail i.e. they had multiple ways to shop.
What’s different today is that Omnichannel retailing happens simultaneously. We see Facebook and amazon, check prices, check the website to see if there is stock, go to shop to feel and try the product and may be come back online and buy. So in the Omnichannel world, the consumer is shopping anytime and from everywhere. Not only there are more ways to purchase an item, they are also researching and finding out reviews of a product before buying it!
Now with the internet all of that has been blown apart. You can obviously shop online, anytime and buy from anywhere. All of the sudden, the power has shifted to the customer and they are really dictating with what’s going on with the stores both online and offline.
The key component of Omnichannel is mobility. The screen on your mobile or iPad has become the portal to shop anytime and anywhere.
Retailers like Tesco have set up virtual stores at subways in South Korea where the customer can scan the code and add on to their shopping cart and get them delivered at home. So we seeing a blend of digital store and physical space. Today customer is always connected on the social media. They begin their journey online. They would always research before buying anything.
Another aspect of Omnichannel is unlimited aisle. There are unlimited choices to purchase from. Unlike the physical stores where there are limited choices to make from. Along with the unlimited choices to choose from, it is also important to feel the product as well. For the consumer today there is constant Omnichannel journey between digital unlimited opportunities and the physical store space. Now this is not to choose between brick and mortar and online! It’s just to see how they can use both.
Consumers are the new point of sales. They do webrooming where they can go online and pick in store, or showrooming where they research in store and buy online, shop online and ship to home, go to store and pay with apple pay, go to restaurant and pay thru phone. Consumer has tremendous power in where they shop, how they shop, where they purchase and how they choose to purchase and how they take possession of the product.
The single biggest challenge a retailer has is to help the consumers make a selection!
In this world of retail, what would it take to survive? Retailers have to make a decision upon where to play the game, if it’s only about price and product, then the internet wins. There and more products, more selection, more potential online and typically better prices online. E commerce retailers should look at more dimensions of differentiation.
It is not a competition whether the brick and mortar stores would stay after the online revolution, but it is to see how well they can collaborate for a great experience.
After the recent Amazon’s purchase of Wholefoods and Walmart’s buying Bonobos – this put’s the end of single channel Retailing! As consumers continue to expect strong Omnichannel experiences, those who can integrate both physical and digital retail to provide a strong customer experience may have an advantage.