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Study: Retailers’ omnichannel strategies lag
E-commerce sales growth at The Home Depot, Costco, Macy’s and Walmart surpassed the growth rate at Amazon.com in the first quarter due to continued investment in omnichannel retail, showing the importance of brick-and-mortar retailers streamlining sales across all channels, a recent report by think tank L2 shows.
New York--E-commerce sales growth at The Home Depot, Costco, Macy’s and Walmart surpassed the growth rate at Amazon.com in the first quarter due to continued investment in omnichannel retail, showing the importance of brick-and-mortar retailers streamlining sales across all channels, a recent report by think tank L2 shows.
For its 2014 Omnichannel Retail study, L2 tracked 100 retailers, including jewelry and watch brands Alex and Ani, Cartier, Fossil, Montblanc, Swarovski, Swatch, TAG Heuer, Tiffany & Co. and Tourneau as well as majors like Saks, Macy’s, Target and Walmart.
Omnichannel retailing refers to providing a seamless approach for consumers across all available shopping platforms--including mobile, digital, and brick-and-mortar, among others--that allows customers to use more than one sales channel from a retailers for any transaction.
The study found that omnichannel leadership comes from the “big box” players, such as Target, Walgreens, Walmart, Best Buy, and more, which doesn’t come as much of a surprise as they have faced the biggest threat from pure-play Internet retailers such as Amazon.
Despite the success that these major players have had integrating sales across all channels, most retailers remain stalled in this area, according to L2.
Of the 71 brands that were benchmarked in L2’s 2013 and 2014 studies, only six launched inventory visibility across their online channel (meaning the ability for consumers to see if a product online is also in stock at their local store), and an additional six brands rolled out in-store pick up for online purchases.
Of the 13 luxury brands included in the study, only one (Gucci) had added inventory visibility to their websites.
All of this comes despite the fact that 44 percent of luxury goods sales are online influenced, meaning jewelers are missing out on a sales opportunity.
The percentage of in-store sales that are being influenced by digital across all categories has more than doubled year-over-year, and the influence of mobile on in-store purchases increased by nearly four times from 2012 to 2013, now accounting for half of digitally influenced sales.
According the L2, the trend of “showrooming,” where consumers browse for products in the store, and then buy online for a better price, now has reversed itself. Data now suggests that shoppers are now more prone to “webrooming,” where they research online or via mobile before buying from a brick-and-mortar store.
When it comes to building their omnichannel strategy, many retailers said
that their biggest obstacle are “limits to their company business model.” Challenges that retailers reported include limitations from the lack of store associate training, difficulty with integrating back-end technology across all channels, and a lack of digital commerce technology, among other things.
L2 suggests that management teams that try to address challenges to growth in the omnichannel business with a single senior hire risk losing to companies that are finding ways to blend their e-commerce and in-store teams. It’s important for businesses to train their brick-and-mortar associates, who play a critical role in the execution of the omnichannel goals such as keeping track of in-store inventory.
To build or create a strong omnichannel presence, L2 noted that the following features and capabilities be included: in-store pickup for a web purchase, real-time in-store inventory that is accurate, enabling product filtering and store locator, personalizing store promotions and booking appointments, shopper wish lists, allowing for pre-orders, and offering exclusives, free shipping and expedited delivery.
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