Battle of the Buzzwords: Why ‘Omnichannel’ Beats ‘Multi-Channel’ eCommerce

Battle of the Buzzwords: Why ‘Omnichannel’ Beats ‘Multi-Channel’ eCommerce

Believe it or not, there’s a gulf between ‘multi-channel’ and ‘omnichannel’ eCommerce.

Yes, they’re both buzzwords. Yes, they were both born out of the ongoing explosion in different sales channels. And yes, they’ve both been said so many times and for so long that we’re tired of hearing them…

But there’s also a vital difference here.

It’s a difference you can measure in your marketing ROI, in your creeping operation costs, and in your long term business growth. In short, it’s a difference every e-tailer should care about.

So here’s our guide to these two elusive terms, and exactly why they matter…

Multi-channel: the choice is yours

A ‘multi-channel’ approach means tackling the explosion of sales channels head on. It’s about meeting consumers wherever they prefer to be.

Simply put, multi-channel strategy means getting out there onto ‘multiple’ channels—the more the merrier…

Part of the shopping boom that’s doubled mobile commerce since 2010? Have a favourite marketplace in mind? Or are you like the 37% of consumers whose main shopping inspiration is social media? (PwC, Consumer Insights Survey 2018)

Whatever a consumer chooses, a switched on multi-channel retailer will have them covered, with a well-optimised platform ready at hand.

Being multi-channel is pretty much a given in modern eCommerce, and for good reason.
When 73% of shoppers use multiple channels to make retail purchases (McKinsey), more channels means more ways to drive sales, boost revenue and ultimately grow your business.

At least, that’s the theory…

73% of shoppers use multiple channels to make retail puchases

– McKinsey

Friction burns

The reality of shopping across channels is a little more complicated. Because consumers don’t just live their whole shopping lives in one channel—they move around.

“A consumer might get inspired to make a purchase on social media,” explains our own Chris Maule, “but that doesn’t necessarily mean they want to buy then and there.

“For example, they might flick over to their preferred marketplace instead—maybe Amazon, maybe a price comparison site—so they can compare a few options. And when they do find an option they like, that consumer might head over to your desktop site and do some in-depth research, before buying a few days later from their phone, and expect to collect it in store at a time that suits them.”

A purely multi-channel retail strategy can’t cope with this kind of consumer. Multi-channel gives you a presence on all the right channels, sure, but it can’t link them together. Instead each channel operates in a silo, making sales and running operations in isolation.

The result is all too often a fragmented customer experience.

Enter the omnichannel

These days ‘omnichannel’ sounds like old news, another well-worn buzzword with plenty of years behind it. But it’s still achingly relevant for achieving growth in eCommerce.

Omnichannel strategy is a more sophisticated response to the growing range of shopping channels. It’s not just about meeting the consumer on multiple channels; it’s about making sure that they have a single, seamless experience across them.

“Simply put, omnichannel is multi-channel done properly!”
John Bowden, Senior VP of Customer Care, Time Warner Cable

Being omnichannel is a far more ambitious goal than multi-channel. It also offers far, far greater rewards. But is it really worth the extra time and investment to turn your multi-channel approach into a genuinely omnichannel eCommerce experience?

4 reasons to go omnichannel:

1. Popular demand

‘Omnichannel’ certainly isn’t a niche concept for consumers. Over 77% of shoppers want a more unified multi-channel experience—but just 20% of retail businesses say providing one is a strategic priority for 2018 (Manhattan Associates).

There’s an obvious gap between what consumers want, and what retail businesses are providing. This is a ripe opportunity to simultaneously delight your consumers, and stand out in a landscape where even the biggest eCommerce players struggle.

Over 77% of shoppers want a more unified multi-channel experience – but just 20% of retail business say providing one is a strategic priority for 2018.

– Manhattan Associates
2. Smarter use of staff time

The few extra seconds it takes for your warehouse team to manually log and chase stock can quickly add up, especially in peak season. That effect is multiplied tenfold when you’ve got different teams juggling different channels.

Omnichannel operations achieve a single inventory view across all channels, keeping teams across your entire business on track and on time—slashing costs while getting more from your back end operations.

3. Reduced stock holding

Managing stock can end up being a serious headache for retailers: either pay the price for larger reserves, or face the possibility of that dreaded ‘out of stock’ notice on your website…

The good news is that an omnichannel system sidesteps this conundrum. When you can see where your stock is across all of your channels, locations and suppliers—and see when you’re projected to sell-through—you’re primed to take swift action to maintain the precise level of stock needed.

The result is a smoother shopping experience for your customers, and warehouse investment freed up to start generating real ROI elsewhere.

4. Better marketing

Omnichannel operations are built on a ‘single customer view’, tracking customers across every channel they interact with—whether that’s in-store, online, mail order, events, or another channel altogether.

That gives omnichannel e-tailers a wealth of data to work with, and the ability to really get under their customers’ skin to learn what’s working, what isn’t, and where and how the business can move for maximum returns and future growth.

The hard work starts here

Getting omnichannel right is an immense opportunity for mid-sized retail businesses. Do the hard work—line up a genuinely seamless experience—and you might be stealing a march on even your biggest competitors.

But achieving omnichannel is easier said than done.

To get omnichannel tactics in action and working for your business, and slot them into your broader game plan for eCommerce growth, download our free eBook Beyond the Hype: Four Fundamentals For Sustainable eCommerce Growth.

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Stephanie Fenton
16th May 2018

The Cost of Convenience: Can Your Business Afford Free Delivery?

The Cost of Convenience: Can Your Business Afford Free Delivery?

Consumer demands for delivery are blowing through the roof. Today’s online shoppers don’t just want hyper-convenient delivery and returns—they expect your business to provide them…

“The Amazon effect has raised everyone’s expectations about how fast products should arrive at our doorstep.” – PWC, Total Retail Survey 2017.

There’s no escaping it. E-Commerce businesses have to nail delivery.

Better delivery options are now the second biggest factor why consumers choose one online retailer over their competitors (KPMG). And high delivery costs are now the single biggest cause of basket abandonment at over 50% (MetaPack)…

What was once accepted as ordinary delivery times, now seems like a lifetime of unbearable delays.

But there’s a flipside. With convenient delivery in such high demand, getting it right can be a potent way to attract and convert consumers.

Fortunately, offering outstanding delivery isn’t as hard as it sounds…

Find your loophole

Too many e-tailers end up seeing decisions on delivery policy as a Catch-22—either you burn your margins trying to keep up with Amazon, or you refuse to play the game and lose all your sales to speedier competitors. It’s a tough one.

But there is a middle ground…

“A lot of the most effective strategies are far simpler than you’d expect. What retailers really need for competitive delivery isn’t just resources: it’s commitment too.”

– John Coyne, Venditan

Instead of committing to funding free delivery no matter the cost, smart retailers need to remember that details, partners and sheer work ethic go a very long way in this industry.

So here are 3 surprisingly simple strategies that will help you offer truly competitive delivery options, all while reducing costs and protecting margins.

1. Pick your partners

Outstanding delivery starts with the right partners.

Invest the time to take a hard look at your current suppliers. Are you really getting the best rates? Are you using their different service categories to full effect?

The key is to negotiate.

Remember, better rates from your courier usually comes down to the volume of shipments you’re processing. So if you’ve enjoyed recent revenue growth—and hence more shipments—pick up the phone, and check out the deals your current partners can offer.

If there’s nothing they can do, then it’s time to shop around and weigh up your options. Spending time and effort hunting for suppliers may feel like a distraction, but it’ll replay itself over and over if you can nail a better deal.

That said, we always recommend the Goldilocks principle in negotiations: look for a reasonable deal, not extremes. After all, the goal is getting a long-term partner.

The goal is getting a long term partner

2. Watch those margins

Don’t lose yourself in what other businesses are doing.

Amazon may be leading lights in consumers’ eyes, but the E-Commerce goliath also lost a colossal $7.2 billion on shipping in 2016, according to GeekWire analysis. Amazon, of course, have done their maths and know they can lean on their other services to make up the difference.

The example for other retailers is easy to spot. Get your calculations right, and if your business can’t afford to offer free delivery, don’t. Simple as that.

For example, we did work with Saltrock Surfwear to provide free standard delivery and collect+ for their customers—but only after making a serious and ongoing commitment to track and monitor their volumes and margins.

While the approach has drawn in major sales for their business, there are tightly specific cut off points: huge effort went into calculating margins and the right threshold for consumer spending before orders qualify.

The trick is once again commitment. First up, to getting your margin calculations right from the off. Second, putting aside time to keep tracking and adjusting on an ongoing basis.

Focus on what your business can offer, and you might just be surprised at how achievable some of those demanding delivery times may be.

3. Keep one eye on the clock

Offering a late cut off point for free next day delivery is simpler than most retailers expect.

The reality is many distribution centres are happy to take stock right up until 10pm if you take the time to ask them. You just have to make sure your staff can get down there and hand the stock over…

Instead of staffing your warehouse 8am till 2pm, staff it 4pm till 10pm. Recruiting staff for a later shift could equal a major customer convenience, helping to keep those demanding customers coming back.

Commit to convenience

Providing convenient delivery isn’t always exciting. Putting in tougher hours, keeping an eye on the margins, and spending time building smart relationships with suppliers all take time, effort and investment.

But get it right, and the rewards are yours to reap.

When consumers crave better delivery, handing it over is a sure fire way to beat out competitors and keep customers coming back for more.

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Stephanie Fenton
2nd May 2018