Omnichannel retailing in practice
Everyone in retail is talking about omnichannel. The philosophy is clear but putting it into practice seems to be more difficult. We sometimes struggle to achieve sufficient revenue. The margins are often diluted and profitability is under pressure. This is why omnichannel in practice was the focus of the second session of the Vlerick Retail Platform. Over 120 managers from the retail sector listened with interest to the CEOs of Gamma Belgium and Game Mania, Rudi Petit-Jean and Kris Lenaerts, talking about their experiences with omnichannel. We have summarised this educational afternoon, featuring lots of participant interaction, in the ten resolutions and insights below.
1/ Omnichannel is not a choice, it's a necessity.
Many sectors within retail are seeing turnover in physical shops grow too slowly, stagnate or even decline, whilst the online market is growing very quickly. So retailers are obliged to start operating online. Anyone who doesn't make successful use of e-commerce will lose market share and their survival will be threatened.
2/ Transform your business model and value chain.
For many retailers today, omnichannel is still not profitable enough, or may even represent a loss. But as there is no other option, you have to redesign your business model in such a way as to make it profitable. There's no alternative! Experience has taught us that these major changes require systems, processes and people.
3/ People make the difference.
Make sure you have the right competencies in your company. This could mean that you need to bring in additional talent, and could unfortunately mean having to say goodbye to some employees. Ensure that you can retain the new talent, as digital whiz kids aren't afraid to clash with companies’ existing culture and customs. Make sure that existing employees have the right attitude too - including on the shop floor: they should see online as an opportunity rather than a threat.
4/ Start with a clear vision but implement it in phases.
You need to know where you want to go. So create a blueprint of how you will approach the customer later on. Then choose a phased approach to implement this vision. Set priorities and define projects. On the one hand, this means you can take action quickly enough. On the other hand, you build in flexibility: you don't know what the future holds, so you need to be able to make adjustments.
5/ Make clear choices on what you will do yourself and what you will outsource.
Outsourcing particular tasks, activities and processes is part of every omnichannel approach. Be aware that your partners in the value chain are also still learning: they won't be able to deliver everything they promise. This also applies to goods suppliers: to what extent do they have the competencies in house to support you (reliability of supply, useful content, accurate product information etc.) ?
6/ At a certain point you will have to dare to jump.
Omnichannel is a strategic direction that is difficult to quantify and budget for. At a certain point, it will be a question of faith. Take the costs of not choosing omnichannel (in terms of loss of revenue for example) into account in your budget too. Accept that you are heading off the beaten track and may encounter surprises: "fail fast, learn fast" is a fitting adage.
7/ Revenue influenced by the internet is still an extension of online sales.
Hunkemöller sees 68% of its sales in the Netherlands initiated online, whilst e-commerce only accounts for 12% of turnover. So an omnichannel strategy should pay enough attention to the consumers' online orientation, as this can also benefit shop sales. Take digital marketing costs that generate traffic to the website into account for shop sales too, not just e-commerce.
8/ Don't forget the shop within omnichannel.
When launching omnichannel, too much attention is often paid unilaterally to the online shop and website. But it's actually the integration of offline and online that delivers success. In the end, the vast majority of revenue will come through the shop in the future too. So keep asking yourself how you can improve the shop experience within an omnichannel vision.
9/ Make sure you distinguish yourself from your competitors.
Omnichannel should not be limited to copying what others do - whether they are purely e-commerce companies or retailers who combine physical and online shops. In this constantly changing playing field, ask yourself how you can make the difference and why the customer should choose you rather than anyone else.
10/ Don't forget the customer!
When developing and implementing an omnichannel strategy, we mainly think from the customer's perspective. Their voice is usually heard through market research. The risk of blind spots is very high. But at the same time, in the digital world there are also a lot of opportunities for customers to express their opinions - through social media, phone, email and other channels. Always listen to customers and their complaints. Make adjustments where necessary. "Fail fast, learn fast" applies here too.