Today’s omnichannel retailers are faced with a growing challenge: providing the right products to the right person at the right time . . . with clear and consistent communications and pricing. What may seem like simple, yet good business practices to a shopper, causes deep data and integrations challenges for retailers and their supplier and manufacturing partners. Even ensuring inventory levels remain accurate across multiple purchasing platforms can be a challenge that isn’t easily overcome. Profound collaboration efforts at all levels of the organization are perhaps the only way to provide fickle shoppers with the immediate access to information, goods and services that they demand.
The Evolving Shopper
Only a few years ago, shoppers would be delighted to find that a retailer’s website contained details about the products and services being offered, but today’s shoppers are upping the ante. They not only expect real-time inventory (44% of smartphone users value the ability to check inventory in a retailer’s mobile app), but the ability to order online or via a mobile app and pick up their purchase in store (50% of consumers have shipped to store for pick up). They require a deep level of accountability from retailers to have accurate pricing and inventory counts, customer service requests and returns that can cross purchasing channels.
Unfortunately, the patience of today’s shoppers is quite thin — especially as it relates to their easy ability to post negative experiences in social media for broad consumption. This evolving shopper is savvy and demanding, often checking multiple channels in an attempt to trip up retailers who are off their game. These shoppers have no interest in the fact that creating their ideal shopping ecosystem is a multi-year, multi-million dollar project that requires intense collaboration throughout the supply chain. They simply want what they want, when they want it — at a discounted price, if possible.
The Evolving Space
Online shopping continues to thrive, with retailers of all types feeling the loss of traffic in their physical locations. Digital sales increase by double digits each year, with aggressive online expansion by Amazon.com and other non-traditional retailers accounting for a large percentage of the profits made online. These competitive conditions, along with the insistence of shoppers, have driven traditional retailers into an omnichannel model which they may or may not be fully ready to implement. When there’s a mismatch between shopper expectations and the ability of stores to deliver, these evolving channels can lead to poor customer experiences.
However, a well-executed omnichannel strategy offers significant benefits to retailers as many shoppers still prefer to browse in store — even if they ultimately buy online or via a mobile application, making this type of strategy effective without alignment throughout the supply chain. A recent study of 46,000 shoppers throughout the U.S. found that 73 percent of shoppers were true omnichannel shoppers, with only 7 percent self-identifying as online-only and 20 percent as store-only purchasers. This could be any combination of using app-based coupons to complete a purchase in the store to buying online and picking up their items at a brick-and-mortar location. The swirl surrounding these shoppers contributes to the evolution of the shopping experience overall and the absolute necessity of having clear and consistent cross-channel communications and pricing.
Value of Collaboration
When manufacturers, suppliers and retailers collaborate to execute a seamless customer experience, everyone wins. Joy Peters, Consumer and Retail Practice Partner at A.T. Kearney has this to say about the value of collaboration: “Companies have seen 10% to 15% lift in topline performance, 40% to 60% faster new product launches and up to 20% decline in total inventory. As the ties get stronger, so do the results.” However, retailer-supplier collaboration is not yet the norm, with retired Kroger grocery VP and independent industry advisor, William Dankworth, noting that challenges such as “time, system limitations, lack of automation and even culture are impediments to sustainable retailer-supplier collaboration.”
Impact of Collaboration on Retail Partners
Retailers benefit from collaboration by having real-time access to intricate data streams, while manufacturers and suppliers are able to increase overall inventory sell-through due to more accurate forecasting and analysis. Shoppers are more deliberate than ever in their buying decisions, with many individuals completing intensive research online before deciding to make a purchase through that or any other channel. Manufacturers who are able to provide additional insight and information at a product level can support the overarching buying process, even though the sale may never be attributed to their website or mobile app.
A tight collaboration with manufacturers and suppliers allows retail partners to reap the benefits of a fully-engaged and educated consumer, by synchronizing their real-world experience with the data they have gathered online. An ideal example is how premiere cosmetics brand Maybelline keeps a finger on the pulse of shopper needs based on their geographic location and other demographics. Inventory and POS data are critical components in creating a strategy that will help Maybelline drive sales — and their retail partner Kroger grow sales in the overall cosmetics category. This shared purpose allows cross-partner collaboration to benefit both organizations, making it a higher priority than if the retailer alone was seeing the benefit.
Planning for Success
While collaboration may not be the standard practice, enough retailers are finding success utilizing these shared strategies that businesses throughout the supply chain are taking notice. The Advantage Group International team called out the benefit of investigating synergies in their recent survey, where “collaborative joint business planning” was named a top ten priority for retail operators in mid-2017. Partners are working together to develop business plans that leverage the strengths and support the weaknesses of partners in the highly competitive retail landscape of 2018.
Consumers have increased expectations that their retailer — whether online, via mobile app or in-store — will provide ready access to product metadata including statistics, sizes, reviews and more. In order to stay relevant, omnichannel retailers must continue to look for ways to partner with organizations throughout the supply chain to satisfy shoppers’ need for immediate knowledge and flexible product purchasing. See how this trend plays out specifically in the online grocery shopping realm, where shoppers continue to surprise retailers with their shifting loyalties and requirements.