Over a decade ago, economists and news outlets predicted the demise of brick and mortar retail. Yet, while D2C e-commerce and the rise of online retail giants have tipped the scales, shoppers today still seem to prefer a hybrid model – splitting their time and money between brick and mortar stores and e-commerce.
As the popularity of omni-channel shopping continues to soar, it’s now essential for brands to combine their efforts across all touchpoints to create an omni-channel strategy for their business. On average, it takes around five to seven touchpoints to close a sale – these touchpoints include, online, in-store, email, social media and more, which highlights the importance of omni-channel retail.
According to Hanna Karki, Principal Research Analyst at Gartner, “Retailers are under increasing pressure to explain the purpose of physical stores and take control of the fulfilment and return process for cross-channel execution. At the same time, consumers are progressively defining the value provided by the experiences they receive from retailers.” Research from Gartner also estimates that by 2020, 100 million consumers will shop in AR online and in-store.
This shows that the way consumers shop and their expectations of retailers are evolving. While both brands and retailers want to provide the best possible shopping experience in the most cost-effective way, they feel pressure to change. The development of new technologies, automation, and the change in consumer behaviour are each forcing businesses and retailers to digitally transform.
In this article, we’re going to explain how omni-channel retail and digital transformation can create the ultimate shopping experience for consumers and provide the best value for your business.
What is everyone talking about?
The majority of us hear buzz words like omni-channel, digital transformation and D2C on a daily basis, but can we define them? While definitions can vary depending on the source, we’ve broken down the meaning of each to provide some clarity.
E-commerce is a method of selling products online. It refers to any commercial transaction that takes place electronically, via the internet.
- Digital Transformation
Digital transformation is the action of incorporating digital technologies throughout all areas of a business and its processes. It’s about people, processes and technology and how organisations use these to change business outcomes, re-think their business models, and create new revenue streams. These changes should be driven by customer expectations around products and services. Digital transformation is an approach that’s more customer-led than it is technology-led.
Omni-channel retail is a strategy where each channel works together, by ‘unifying sales and marketing’ to create a seamless shopping experience for each customer, regardless of the channel they use. True omni-channel will also incorporate servicing and after-sales across channels to provide the best possible customer experience.
Direct-to-Consumer is a strategy that enables brands to sell products straight to their customers without the need for third-party retailers, either with or without e-commerce.
Digital Transformation – The Core of Brand and Retailer strategy?
Consumers today choose convenience over anything else. They want to buy products wherever is easiest for them – be it online or in-store.
So what does this mean for brands and retailers? The reality is, to survive in the current retail climate, brands and retailers need to provide consumers with a range of purchase options, or they risk becoming irrelevant.
Digital transformation does not just refer to online commerce strategies and activities. The art of digital transformation sees innovative (digitizing) technology implemented across an entire business – from operational processes and mindsets towards marketing strategies to allowing customers to shop conveniently.
A retail giant, Amazon, offers the perfect example of digital transformation with its cashier-less Amazon Go stores. Even though Amazon was born in the cloud, they managed to go brick and mortar by using their innovative technologies. It’s fresh, it’s exciting, and it’s convenient for consumers.
The shift in consumer shopping behaviour in recent years has led brands across all industries to put more focus on digital transformation. Hatch’s Business Development Manager, Michael Ras, visited several trade shows in 2019, including Nuremberg’s popular toy fair, Spielwarenmesse, IFA, and Kind + Jugend.
During his time at each, Michael noticed a shift in the way brands were talking about digital technology. “While speaking to hundreds of brands at these fairs, it was clear that these companies were taking digital transformation very seriously. Everybody was talking about the latest technology trends: voice, artificial intelligence and connectivity – especially given the rapid roll-out of high speed, high bandwidth 5G mobile networks, and the focus on catering to the digital native customer.”
While some companies were in early phases and others more advanced in their journeys, here are some of the topics Michael noticed brands talking about:
- Relaunching or redesigning their website, as part of their digital transformation strategy
- Considering adopting e-commerce or omni-channel as part of their sales channel mix
- Working on automating their processes and implementing out-of-the-box solutions.
Digital transformation starts with changing the mindset of people within an organisation, but it goes further than transforming processes and business models.
The Role Of Omni-Channel Within Digital Transformation
Omni-channel retail and digital transformation go hand-in-hand. Omni-channel focuses on best-in-class customer experiences with the implementation of new technologies, but, these experiences can become even more targeted and interactive.
The nature of omni-channel shopping behaviour sees consumers seeking out deals from lots of different touchpoints, so why not provide customers with this information all in one place?
It’s common knowledge that consumers now use multiple platforms to shop – from online retailers to social media and traditional high-street stores. Shoppers have evolved into omni-channel consumers: buying items online and collecting in-store, browsing products in-store and buying online (BOPIS), and a range of other combinations. Consumers today expect diverse shopping experiences.
However, we still see brands investing money into big digital media campaigns that drive prospects to their website, yet they either offer no option to buy at all or provide a basic purchase route, limiting the buying options. Both can lead potential customers to search for a better deal elsewhere, often from a preferred retailer, which leads to a broken customer experience.
There are many ways that brands and retailers can set themselves up for success.
- On-demand Point-of-Sale
To stand out from the competition, brands could create an on-demand point-of-sale (POS) that allows consumers to engage with the brand, browse, test products, and purchase in innovative ways. To enhance the customer journey, brands could use a mix of AI, VR and AR technology to allow shoppers to try on and experience products before they buy. A good example of this is the IKEA shopping VR app.
- Sell Through Multiple Channels
Setting up an online store to sell through as many channels as possible will provide an omni-channel approach and help businesses transform digitally. Channels can include a brand’s e-commerce platform, third-party marketplaces like Amazon, and brick and mortar stores – even if it’s only for brand awareness. With Where to Buy technology, brands can offer customers multi-channel purchase options through their product pages and e-commerce store, via popular online retailers and trusted offline local retailers.
What is next?
The market is changing and evolving rapidly, and the brands who acknowledge and adapt to the ever-changing climate will increase their chances of coming out on top.
Build your omni-channel e-commerce platform not just to today’s standards, but in anticipation of the shifting retail trends. Of course, this approach has its challenges – after all, nobody can guarantee what future entails. Hatch’s Where to Buy technology provides buying options that link to each of your digital touchpoints, to help your business adapt to the ever-changing retail climate, improve customer experience, and increase overall sales.
Let’s talk and we will tell you all about it!