Why Are Retailers Hesitant to Explore Omnichannel Opportunities?
More than 90% of shoppers combine digital and physical channels on the path to purchase, and four in 10 online shoppers are using buy-online, pick-up-in-store (BOPIS) checkout options. But the big news coming out of the 2018 holiday season isn’t how many shoppers are taking advantage of online-to-offline fulfillment. It’s how few retailers are offering it.
According to data from Nielsen, one third of retailers are not equipped to support click and collect, or BOPIS. Thirty-six percent don’t even have a website or mobile app that enables online purchases.
What’s going on here? Consumers have never been more excited about shopping across channels, so why aren’t retailers delivering on those expectations?
For one thing, there may not be enough incentive to push beyond the competition as far as omnichannel experiences are concerned, explains Vikas Aron, director of product strategy at the retail solutions provider Aptos. Aron says there are retailers who still approach omnichannel with a purely ROI-driven mindset, and those retailers are often found doing “just enough” to stay current with the competition.
“The ‘just enough’ approach is often counterproductive since the weakest link in the organization—and weakest technology system—will ultimately define the omnichannel experience the customer gets, which undermines customer satisfaction, brand loyalty, and sales in the process,” Aron says.
Another reason more retailers aren’t offering BOPIS right now is because store and online teams aren’t seeing eye-to-eye.
“Who gets credit for the sale is still a big sore point between the teams, and this still happens far more often than we can imagine,” Aron says.
Operationally, BOPIS can be very hard, as well. Accurate inventory visibility is a key requirement for a successful BOPIS program. For retailers that carry a shallow depth of SKUs in-store, or run frequent promotions, it’s especially hard.
“We’re also seeing significant resource limitations in-store. If the store is not staffed appropriately to meet the SLAs (service-level agreements) of a BOPIS order, some retailers give it a pass for fear of disappointing the customer even more,” Aron says.
Customer expectations evolve continually as new technologies are introduced into the marketplace, and retailers that are always one step behind—that is, not leading the pack in innovation—will find themselves falling short on delivering the experiences their customers expect.
Although there are many retailers that place customer service and customer convenience at the center of their strategic decisions and technology investments, Aron says even they can struggle with legacy systems that were not designed to be real-time and extensive to keep up with the latest innovations in the market.
“One example of this is retailers who are still 100% reliant on emails for communicating with customers,” he says. “Gen-Z and many millennial customers have moved on to text messages, social channels, and other more modern methods of communication to interact with brands.”
iVend Retail’s 2018 Global Path to Purchase Report found that 32.9% of shoppers would like to see automatic payment via digital shopping carts in the future, and 67.3% have left a store empty-handed because they couldn’t find what they were looking for—an issue remedied with BOPIS.
Among those interested in BOPIS, 44% said they were motivated by the convenience and the ability to save time, and 33% said they appreciated having the ability to take their time when deciding what to purchase.
Even if they wanted to meet the growing consumer demand for BOPIS, Aron says most retailers don’t have the supply chain, store-fulfillment options, or the cost structure to meet the service-level agreements they need. He says retailers need to update their transactional and financial systems so they can take advantage of the latest marketing strategies as they appear in the marketplace and while consumer demand is peaking.
“Order management systems are foundational to all omnichannel use cases and BOPIS is no exception,” he says. “[Order management systems] are the only systems that can provide real-time visibility into available inventory in the store, orchestrate fulfillment of the pickup order, and keep the customer abreast on the progress of their order. [It’s] foundational to support those opportunities for retailers.”
Stephanie Miles is a senior editor at Street Fight.