Four Takeaways From An Evening Of Omnichannel Retail In New York
Last night we held an event here in New York in which VP & Principal Analyst Peter Sheldon presented some of his recent research on the new omnichannel imperative. He talked through the state of omnichannel retail today, why omnichannel is now essential for retailers and which changes retailers must make in order to drive their omnichannel initiatives forward. A few takeaways from the event:
Online sales and web-influenced sales now represent the majority of all retail transactions in the US. This year’s $3 trillion US retail market is dominated by a combination of online transactions and offline transactions influenced by online research (our colleague, Sucharita Mulpuru, documents this trend in our cross-channel retail forecast). Peter pointed out that high-value purchases tend to be the most heavily researched, with some categories like cars seeing extraordinarily high levels of online research prior to purchase.
Retailers are thinking creatively about in-store pickup. Today’s in-store pickup initiatives vary greatly in terms of execution: Not every retailer has determined it’s best to place in-store pickup areas in the back of stores, forcing consumers to walk past a variety of potentially tempting products en route to the pickup area. In Canada, for example, Future Shop (a division of Best Buy Canada) offers items for pickup within 20 minutes of the order being placed online and provides a separate pickup area just inside or outside the front of retail stores. Consumers don’t spend precious time waiting for pickup and navigating to hidden-away pickup areas – instead, the idea is to provide them with time to shop after collecting their purchase.
Insight into inventory is essential – and can be a differentiator. Peter talked about the fact that inaccurate inventory issues still continue to plague retailers, but some retailers use their insight into inventory availability to their advantage. IKEA, for example, not only shows inventory availability by store, but takes it a step further to show online shoppers projected availability for an item over the next few days. Consumers can gauge if their item might be in stock a day or two from the time they’re shopping, if not immediately.
Ship-from-store is a win for both online and offline channels. Many omnichannel initiatives end up benefitting either the store or the online channel – by contrast, ship-from-store initiatives can be valuable to both. Ship-from-store programs expand the inventory available to online shoppers, allowing retailers to avoid confronting consumers with the dreaded “Item temporarily out of stock” message. For retail stores, ship-from-store allows them to sell inventory before it has to be discounted. Our upcoming research will dive into this issue in greater detail, highlighting some key best practices when it comes to ship-from-store initiatives.
I encourage you to read our research on becoming a best-in-class omnichannel organization and to reach out for more insights if your company is aiming for omnichannel excellence.