“Change has its enemies,” Robert Kennedy said. Not wanting to upset the status quo is one of the biggest. But simply surviving at a comfortable level is neither a sound or a sustainable business strategy—especially for retailers. With 21st century sands shifting all around you, things won’t remain comfortable for long. I see quite a few retailers in this precarious position, with only a short runway to do something about it.
In our brave new omnichannel world, retailers must trade the brand, not the channel, and do so seamlessly. This third generation of e-commerce is fast, unforgiving, and knocking at your door. That’s why I wanted to use this blog to highlight six core capabilities that omnichannel retailers should leverage if they are to master this new commercial reality, rather than simply survive it.
- Mind your business model: Orienting your entire business model around the customer experience—including personalised, optimised content combined with a “commerce everywhere” approach that’s context-aware—is one of the most important steps you can take. Anything other than a digitally empowered business model is just an incremental toe in the water.
- Get artificially savvy: We’re seeing a lot of interest and activity in artificial intelligence with machine learning analysing content, driving natural-language generation, and executing faster and more accurate decisions. A recent IDC study, “Evolving the Digital Core”, commissioned by SAP, found that 17% of retailers in Europe have already adopted or are about to adopt an AR/VR solution.
- Increase your customer touchpoints: Omnichannel customer experience remains among the top three business priorities in Europe, with 31% of European retailers expected to invest in a consumer app this year. Mobile app users, for example, can demonstrate up to twice the propensity to become repeat customers, compared to other users. Mobile shoppers can also spend up to 1.8 times more than desktop shoppers.
- Intelligently deliver the goods: An AI-based omnichannel forecasting solution can provide up to a 20% reduction in surplus stock and a 40% increase in forecast accuracy, according to IDC. Likewise, leveraging ship-from-store capabilities can generate savings in excess of 30%, while the challenges around last mile delivery can be addressed by integrating dedicated third-party services within your omnichannel commerce platform.
- New definitions of success: A new generation of e-commerce brings a new set of metrics for retailers, such as KPIs around device conversion, site traffic, dwell time, and omnichannel customer value, not just sales margin or footfall.
- Order, order: Order and fulfillment management is a critical component as it improves efficiency at all supply chain levels—meaning higher omnichannel profitability. A real time unique view of inventory should be your starting point, but hurry up. One out of two European companies will invest in logistics and fulfillment management technologies this year.
Consumer behaviour, technology innovation, and the competitive ecosystem have permanently raised the bar for retailers. Mobile and online are the growth engine of retail omnichannel commerce, but many retailers are not yet leveraging their full potential. Those that don’t risk sacrificing market share, missing sales at different stages of a fragmented customer journey, and fumbling with avoidable supply chain and store network inefficiencies.
If you’d like to know more the third generation of e-commerce, download IDC’s report, “Evolving the Digital Core.”