15 stats to explain why omni-channel is more than just a buzzword
Last year, the Oxford English Dictionary dubbed ‘selfie’ as the word of the year. If it were up to the retail industry, however, 'omni-channel' should have been the word to define 2013. As a new way of thinking about multi-channel retailing, omni-channel dominated conversations in 2013 and will continue to rule the day in 2014 and beyond.
Although consumers might not be privy to the term, merchants can't seem to escape it. The thing is, however, that merchants shouldn’t want to escape it. They should want to embrace it – for the increases they can receive in annual sales as well as the competitive advantage it offers.
To identify the challenges and obstacles that middle- and large-market multi-channel retailers face when deploying a successful omni-channel commerce strategy, Forrester was commissioned to conduct a study. That study, titled “Consumer Desires Vs. Retailer Capabilities: Minding the Omni-Channel Commerce Gap,” was based on surveys that went to 256 U.S. and European retail and manufacturing decision-makers involved in digital commerce initiatives. It was also dispersed to 1,503 multi-channel shoppers. The findings were quite telling:
- 71% – Amount of consumers who cited the ability to view inventory information for in-store products as important or very important.
- 50% – Amount of consumers who expect to buy online and pick up in-store.
- 39% – Amount of consumers who are unlikely or very unlikely to visit a retailer’s store if the online store does not provide physical store inventory information.
- $1.8 trillion – The amount of online and web-influenced retail sales that Forrester expects by 2017, up from $1.3 trillion in 2013.
- 73% – Amount of consumers who stated that they are likely or very likely to visit a local store if the retailer provides in-store product availability information online, compared with 36% of customers who would visit a store if no inventory information was available online.
- 25% – Amount of consumers who said that they use store pickup so they can collect their orders on the day they purchase them (thus avoiding the wait for shipping).
- 10% – Amount of consumers who simply find it more convenient to pick up from a store than have items shipped to their home.
- 56% – Amount of consumers who have used their mobile device to research products at home with 38% who have used their mobile device to check inventory availability while on their way to a store and 34% who have used their mobile device to research products while in a store.
- 45% – Amount of consumers who expect sales associates to be knowledgeable about online-only products.
- 69% – Amount of consumers who expect that store associates be armed with a mobile device — in order to perform simple and immediate tasks such as looking up product information and checking inventory.
- 27% – Amount of consumers who would be very likely to leave and visit another retailer’s store if a product is out of stock with 21% who would buy online from a different retailer and 21% who would simply hold off buying the product.
- 45% – Amount of consumers who would take up an in-store associate’s offer to ship an out of stock product to the consumer’s home for free.
- 93% – Amount of surveyed retailers who cited that enabling ship-from-store had resulted in a positive or significantly positive uplift in online revenue.
- 77% – Amount of surveyed retailers who cited that enabling ship-from-store had reduced or significantly reduced their fulfillment costs.
- 88% – Amount of surveyed retailers who cited that enabling ship-from-store had improved or significantly improved their customer satisfaction metrics.
Because some retailers are slow to adopt omni-channel retailing, the competitive advantages it offers to those that do are great. When given the choice, consumers prefer buying from the retailers that are focused on omni-channel. According to the statistics also garnered from the Forrester report, only a minority of those surveyed are taking advantage of its benefits:
- Only 32% of surveyed retailers are giving shoppers the ability to view inventory information for in-store products.
- Only 1/3 of retailers have operationalized even the basics, such as store pickup, cross-channel inventory visibility, and store-based fulfillment.
- Only 6% of retailers reported no significant barriers to becoming an integrated omni-channel company with internal technology challenges, organizational silos, and poor operational execution all thwarting progress.
- 10% of retailers who offer “pickup in-store” orders cannot fulfill those orders due to inaccurate store inventory, while 51% of retailers reported that between 2% and 10% of orders cannot be fulfilled; 52% of retailers cited inventory accuracy issues as a major barrier to the rollout of these programs.
- Only 39% of retailers today have enabled their sales associate to be able look up product information for them although half of all consumers that visit a physical store expect this capability.
Although the business case for implementing omni-channel practices is becoming more and more apparent, many retailers have not executed on this strategy because of technology issues. In addition to the mere 6 percent of retailers who did not report significant barriers, the Forrester survey also showed that 40 percent of retailers reported that they have difficulty integrating back-office technology across channels. To overcome technology hurdles and embrace omni-channel to its fullest, feel free to contact the team at NetSphere Strategies.