3 Factors Slowing Down Omnichannel Adoption

Across the globe, retailers have picked up on the omnichannel trend and try to give the customers what they want: the same level of service across all sales channels.

Some are doing better than others but everyone’s trying. Especially for multi-channel retailers, the switch is essential in keeping up with an increasing competition from online pure-plays.

The switch is not easy and certain bottlenecks stand out:

1. Omnichannel is sometimes treated as a marketing or tech buzzword. Hint: it’s not

When you say omnichannel, you have to think of all the sales and distribution channels. Hence the “omni”. That certainly looks like a marketing area and to a certain degree, it is.

But to make omnichannel a reality instead of long consultative talks, you have to go beyond marketing and into the dark woods of technology systems and process management. That’s the hard part. The change comes when companies and especially executives leave aside their differences and interact to connect cross-department processes.

Yes, omnichannel is marketing driven but it needs inventory transparency, it needs technology investment and updating and it needs a change in internal processes and culture.

Yes, culture because…

2. There’s a lot of sales cannibalization between channels

Mid to large retailers that switched from brick and mortar to multi-channel did this by adding silo-ed sales structures one after another. First came the brick and mortar operation, then came the online store, the call-center, the mobile sales and so on.

Each of these channels eventually developed into a full-fledged sub-organization. It is not uncommon to see, for example, ecommerce departments with full operational structures from purchasing, warehouse management, picking and packing, sales, marketing and others.

When such structures emerge, a certain type of independence emerges also and this can lead to channel cannibalization. Simply put it’s one channel stealing sales from another, instead of working together for the customer and the common (company) good.

That’s why a change in culture is much needed when striving to implement omnichannel retail policies. Any customer should be encouraged to buy from any channel, as long as it stays within the retailer’s domain.

3. BAGA is a lot more complicated than it seems

BAGA stands for “Buy Anywhere, Get Anywhere“. Buy online, pick up in store. Or at home. Buy in the physical store and receive at home. Place an order on the phone and pick up in store.

It’s complicated just working with two or three of these scenarios. When you add general inventory transparency, cross-store orders and supplier availability it gets a lot more complicated.

That’s why a BAGA policy should be built after implementing:

  1. inventory transparency policy and technology. This should spread across the full inventory spectrum including warehouses, stores, in-movement goods and suppliers.
  2. customer master-data management. The customer is the same across all channels and should be recognized and its treatment personalized on demand. Think of this area as a CRM on steroids that spreads across all channels.
  3. product master-data management. Product information should be available on all channels, when needed and in the right format.
  4. cross-channel marketing policies. Think marketing independent of channel and at the same time available on all.

These are just three of the most important factors that slow down omnichannel adoption. The fourth is probably the fact that some companies are just so tired of working their way through ecommerce adoption that they are unwilling to move forward.

It takes willingness to discover the benefits and what omnichannel is. For many, the switch is rather simple in terms of technology. It does bare costs in willingness to learn new concepts and implement these concepts within the company.

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