The Future of Omni-Channel in the New World of Retail

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1 The Future of Omni-Channel in the New World of Retail Peter Sheldon, Principal Analyst Forrester

2 63% of consumers visit a manufacturers site to find product information 2

3 ...and 54% plan to buy with within 30 days of their initial visit 3

4 It s no surprise that manufacturers are seeing significant growth from their direct online channel 4

5 But obsession about online sales is missing the big picture

6 By 2016, 44% of all retail sales will be influenced by the web 6

7 Consumers still crave the intimacy, immediacy and convenience of stores Thinking about the products you researched online and purchased offline most recently, why did you purchase that product offline? Base: 2,545 US online adults who have researched a product online and who have purchased offline; Source: North American Technographics Retail Online Benchmark Recontact Survey, Q (US) 7

8 Retailers and brands alike can ill afford to ignore the consumer need for omni-channel experiences

9 Omni-channel excellence depends on 3 things Externally-facing initiatives Internally-facing initiatives Customer-facing operational excellence Marketing and customer database management Organizational structure Explanation Initiatives such as instore pickup and returns in stores; these efforts are valuable to shoppers who browse and buy across channels Synchronization of messaging across channels; leveraging shopper information to create relevant offers and programs Reduction of channel conflict and efficiencies shared across different parts of an organization to drive overall company sales Few if any retailer or brands excel in all three

10 Relax, have a drink you ve already cracked Onmi-channel right? Most retailers and branded manufacturers are just getting started with Omni-channel 10

11 Many Brands & Retailers Are Failing With The Omni-Channel Basics 1. Buy online, pick-up in-store 2. My Account 3. Store inventory visibility 4. Associate ordering 5. Store Kiosks 11

12 Consumer expectations for pick-up in store have evolved Today Tomorrow notification Push / text notification 2 hour SLA 10 minute SLA Back of store pickup Front of store pickup Pick-up in store only Ship to store & Pick-up in store No show no go No show ship it to me 12

13 Canada s Future Shop is re-setting customer expectations 13

14 First, You Need To Revisit The Omni-Channel Basics 1. Buy online, pick-up in-store 2. My Account 3. Store inventory visibility 4. Associate ordering 5. Store Kiosks 14

15 Delta doesn t discriminate by channel

16 Lowes allows customers to view in-store and on-line order history together

17 Dyson build a direct post-sales relationship regardless of purchase channel

18 First, You Need To Revisit The Omni-Channel Basics 1. Buy online, pick-up in-store 2. My Account 3. Store inventory visibility 4. Associate ordering 5. Store Kiosks 18

19 The North Face get the basics right, but the experience is lackluster

20 Apple goes a step further and commits to instore availability today 20

21 Toys-R -us provides inventory transparency across channels and touchpoints 21

22 First, You Need To Revisit The Omni-Channel Basics 1. Buy online, pick-up in-store 2. My Account 3. Store inventory visibility 4. Associate ordering 5. Store Kiosks 22

23 clienteling and mobile POS are rapidly becoming table stakes

24 Mobile devices in the hands of associates have changed customer expectations What do you expect a store associate equipped with a mobile device (e.g., smartphone or tablet) to be able to do for you with the mobile device while shopping in a store? Check pricing 65% Check additional store inventory when the shelf is empty 55% Check inventory availability at nearby stores 48% Look up expected replenishment dates for out-of-stock items Reserve products for me to pick 40% 39% Answer technical/spec questions I may have Show me product information (e.g., images or customer reviews) 38% 37% Perform a checkout for me (without going to a traditional checkout aisle) 19% Base: 4,358 US online adults; Source: North American Technographics Retail Online Survey, Q (US) 24

25 First, You Need To Revisit The Omni-Channel Basics 1. Buy online, pick-up in-store 2. My Account 3. Store inventory visibility 4. Associate ordering 5. Store Kiosks 25

26 Clinique have invested heavily in digital store experiences 26

27 Audi have invented the digital showroom 27

28 The next phase of Omni-channel maturity is rapidly evolving 28

29 5 Omni-channel imperatives you need to be planning for now 1. Buy online, pickup anywhere 2. Ship from store 3. Mobile s In-store mode 4. Everything, everywhere (the endless aisle) 5. Augmented shopping 29

30 House of Fraser allow customers to collect from over 5,000 local convenience stores for only 4

31 Canadian online shoppers can choose to pick up orders from any Canada Post office for free

32 Amazon now offers locker pickup for free in many 7-11 and Staples stores Wal-Mart allow goods to be shipped to any Fed-ex office location

33 Ocado offer hourly delivery slot options for customers

34 5 Omni-channel imperatives you need to be planning for now 1. Buy online, pickup anywhere 2. Ship from store 3. Mobile s In-store mode 4. Everything, everywhere (the endless aisle) 5. Augmented shopping 34

35 Most retailers & brands initially invest in shipfrom-store to prevent lost online sales

36 But ship-from-store can be used to optimize the supply chain and improve margins Avoid store markdowns Offer faster shipping options Reduce shipping costs Avoid overstock situations Control product sell through rates Manage returned inventory Manage fulfillment center SLA s Fulfilling international orders

37 5 Omni-channel imperatives you need to be planning for now 1. Buy online, pickup anywhere 2. Ship from store 3. Mobile s In-store mode 4. Everything, everywhere (the endless aisle) 5. Augmented shopping 37

38 Retailers mobile roadmaps are already dominated by in-store requirements Which of the following mobile features do you plan to invest in during the next 12 months

39 Mobile experiences should be contextual to when, where and how they are being used

40 Mobile can be used in stores to connect customers with associates I need help

41 5 Omni-channel imperatives you need to be planning for now 1. Buy online, pickup anywhere 2. Ship from store 3. Mobile s In-store mode 4. Everything, everywhere (the endless aisle) 5. Augmented shopping 41

42 Customer s want the web assortment in store Results: 10 items 42

43 5 Omni-channel imperatives you need to be planning for now 1. Buy online, pickup anywhere 2. Ship from store 3. Mobile s In-store mode 4. Everything, everywhere (the endless aisle) 5. Augmented shopping 43

44 Augmented shopping experiences will evolve from kiosk to the consumers mobile device Gluten free ü $5.99 (buy 2 get 1 free) 44

45 Google glasses - coming to a retail store near you soon 45

46 Thank you Peter Sheldon blogs.forrester.com/peter_sheldon

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