Omnichannel
Brick-and-mortar retail alive and well: Cohesive omnichannel strategies a must for success in post-COVID-19 world
Jed Danbury, vice president, Computop, explains why retailers striving to develop a true omnichannel approach must bolster and support physical stores. And that might require retailers to reinvent themselves.
August 11, 2020 by Jed Danbury — VP Sales, Computop
In the current environment, it may seem like putting effort behind face-to-face selling is a dated approach. However, as stores begin to re-open, the in-store experience can be a strong way to secure customer interest and loyalty.
When it comes to talk about omnichannel and multichannel, these terms mean virtually nothing to consumers. They simply want to shop where it suits them and when it suits them. And the better the experience the more likely they are to come back for more.
Now is a perfect time for retailers to fight back against the prophecies of doom for brick-and-mortar stores. Consumer preferences are not, and never have been, singular. Choice — and plenty of it — across all channels and a focus on merging even more closely the online and offline worlds will keep customers engaged with a business.
But delivering a true omnichannel service is a challenge and one that retailers have been facing for a long time. All the subsystems that support an omnichannel approach must harmonize with each other, from enterprise resource planning and customer relationship management to the complex interaction of accounting and payment.
Many retailers have been questioning whether it makes sense for them to continue operating their physical stores at all. The answer is yes, it does — brick and mortar is alive and well, and it has a crucial role to play in the modern omnichannel strategy.
The new role of the store
Against the doom-mongering that accompanies any discussion about physical retail, we must look at how the options for customers have changed and why the store plays such an important part: click-and-collect — the fastest way to a product for customers who know exactly what they want; in-store ordering — a customer finds what they want but orders it in the right size or color, for example, while they are in the store; ship-from-store — which uses store stock to fulfil not only online orders, but out-of-stock requests from nearby stores so that the physical outlet becomes a mini warehouse; and in-store return, which allows customers to take goods they have purchased online back to stores.
Retailers need to offer customers choice — what they want, when and where they want it. The evolution of the physical store and the roles it can play is a testament to that.
Retail is not one or the other
Retailers have been engaged in the battle to find a happy ground between physical and online retail for years, balancing the increasing cost of their stores against the knowledge that consumers don't just want to shop online. They understand that society does not break down into two static sociological milieus — analogue is yesterday, digital is today. In practice customers enjoy the mix. Very few never go to physical stores, just as, increasingly, very few have never ordered online. They want, and expect, to make a shopping choice based on lifestyle, on how they feel on a particular day, on what else they are doing.
The most important argument in favor of combined offline and online retail is called ROPO, which can mean both "Research Online, Purchase Offline" and "Research Offline, Purchase Online."
Some customers enter a store, having already read the Amazon reviews and fully aware of prices. Others come in to question the sales staff because they don't trust online reviews and want to touch the goods, but they then proceed to order from the cheapest website after they've made their purchase decision. If shops were to close, neither of these large groups of customers would be satisfied. And many online retailers would face higher returns because the goods they have delivered are not to the customer's taste. Retail outlets are, after all, experience-generating showrooms and satisfy a lot more than just a desire to enter a physical store or avoid ordering online.
Merging of both worlds
Merging online and offline is complex. Chain stores that have not migrated online have faced the biggest challenge; meanwhile, many online pure plays have benefited from pop up shops, establishing a physical presence, albeit temporary.
E-commerce is the predestined platform for pull marketing, while store chains find push marketing easier. Unlike the classic retail outlet which can hang a poster in the store window or place promotional items in an eye-catching display, the product ranges of online merchants are virtually invisible until a prospective buyer starts a browser search. Apart from spam and intrusive banner advertising, it's not supply that creates demand, but demand that must first be created — even if it's a simple Internet search that triggers targeting via cookies. The art of omnichannel is to merge two conflicting retail approaches.
Completing the sale securely
The trick for retailers, therefore, is to be where your customers want you to be, to understand what they want, and to make it easy to order, deliver and pay.
When it comes to payment, omnichannel still presents hiccups. Payment methods offered at the POS and online are traditionally channel-specific, and the options at the online checkout may differ from those at the cash register. For credit to be made to a card, the same card must be presented, and the contractual partner must be identical in both channels — this can be an issue for retail chains with many subsidiaries. Retailers that use one payment service provider (PSP) in-store and another online will generally find it difficult to get an overall view of the business.
This can be prevented by locating payment and data with a service provider that offers e-commerce, m-commerce and POS from a single source and operates globally. No retailer operating internationally should need separate contracts with local service providers in each country and a hodgepodge of different terminals and software solutions anymore. Today's modern systems guarantee true omnichannel reporting; i.e., the consolidated evaluation of all sales and transactions, wherever they occur.
The PSP enables the accounting department to access globally standardized settlement files which allows them to automatically assign each incoming payment to the respective order (reconciliation). If new geographical markets are added, everything still runs via the same central access point. The payment data from all regions becomes a valuable building block of a big-data strategy and helps to identify how customer behavior differs from country to country, or how it can be influenced in a test market.
When it comes to customer payments, whether online or in-store, it's essential to keep the data secure. Terminals at the POS should support the P2PE security standard of Visa and Mastercard, ensuring that the payment data is strongly encrypted. Since real data is neither displayed nor stored, it cannot be stolen. Retailers should consider adopting P2PE, which requires only a few checks on a questionnaire, as it saves a lot of time and money. Using the central access point of an independent PSP, retailers can easily select the most important local payment methods and the best acquirers for their international business. This gives them the greatest possible flexibility for international expansion and optimizes running costs. And last but not least, P2PE allows sales staff to use mobile devices such as smartphones and tablets at the POS.
Despite the challenges, for a true omnichannel approach, retailers need to bolster and support their physical stores. When it comes to truly immersing customers in the look and feel of the shopping experience, brick-and-mortar is incomparable. Yes, it might require retailers to reinvent themselves, and this might be difficult, but if they want to keep customers happy and thrive, they need to serve them wherever, whenever and however they want to shop.
Jed Danbury is vice president of Computop.
About Jed Danbury
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