Although omnichannel has long been a buzzword in retail, implementing a successful omnichannel strategy is something which more often than not proves easier said than done. In this piece, RetailTechNews and Brian Green, head of EMEA sales, Magento Commerce, discuss how retailers are integrating digital and physical shopping experiences, and outline how Magento are helping them achieve this goal. 

RetailTechNews: How can retailers be making the most of the omnichannel shopper?  

Brian Green: Omnichannel shoppers are more valuable than those who only engage with retailers in one place. To truly capitalise, retailers need to adopt an omnichannel strategy, supported by seamless e-commerce, 360-degree inventory management, and order fulfilment capabilities. They also need to consider adopting an integrated approach to customer service, so that they can attract a larger audience and ensure that all channels are interlinked, providing a seamless, consistently positive experience for shoppers. Companies that haven’t already adopted an omnichannel approach need to consider this as a matter of urgency. In fact, IDC predicts that by 2019, half of all retailers will have adopted a retail omnichannel commerce platform and will experience up to a 30% increase in profitability.

To capitalise on omnichannel, retailers need to allow shoppers to buy whenever they want, through any channel, and have the flexibility to receive their goods at a place of their choice, including ‘buy online, pick up in-store’. For this reason, retailers need to invest in a proven order management solution that supports commerce platforms to help deliver the ultimate shopping experience. By doing so, they can increase revenue by fulfilling orders from the most efficient source of available inventory – ensuring they never lose a sale by offering more channels and delivery options, whilst improving customer loyalty.

Why are some companies still struggling to transition their business to sell online?

The larger and more complex the business, the more inertia an organisation tends to have and the need to change is more difficult to implement. Many businesses have legacy systems and ways of working in place that have become so established that it is difficult to grasp the e-commerce opportunity; and for many, it remains largely untapped. Taking a business online is a complex transition for any organisation and requires a thorough review of current practices and a strategic look at business goals. There are key questions merchants need to ask before they begin the transition to move their sales models online, in order for them to be fully prepared, such as their sales process, their online pricing strategy, and their channel sales strategy. All organisations, both B2B and B2C, are being forced to review how they do business and many need to grasp the nettle and decide how they can create hybrid models of B2B2C and Direct to Consumer (D2C) before their competitors beat them to it.

Can a company survive as either an e-commerce pureplay, or a solely brick-and-mortar business, in today’s retail environment?

There are clearly some organisations that can survive as solely brick-and-mortar and others that are able to operate purely online. However, as modern shoppers gain access to new technologies and have an ‘always on’ and ‘NOW’ mentality, retailers and online companies have had to change their business models and adapt. The result is a merger of digital and offline shopping that delivers a better experience. There are still occasions when people want to order online, but collect a product in-store, so to solve this problem retailers also need a physical presence. Amazon and eBay, among many others, are driving this behaviour, enabling customers to purchase online and then pick up the product in a local branch or a click-and-collect locker or self-service kiosk.

The flip side to this is reflected in recent news headlines, which clearly report that many brick-and-mortar giants are feeling the crunch and are increasingly unable to compete with the convenience and competitive pricing environment of online. Even the age old physical advantages of face-to-face product expertise and same-day availability have been battered by online content superiority and same-day shipping options. However, this doesn’t necessarily mean doom and gloom for all. Industries like apparel require a customer to be able to try on, touch, feel, and interact with the products they’re buying and no easy return policy, pre-labelled shipping packaging, or sizing intelligence platform will ever fully replace that. Customers like the emotional experience of physical shopping. But that doesn’t mean apparel isn’t going through its own transformation; and it’s one that continues to heat up. More and more, apparel brands are embracing technologies that blend the best of in-store and online experiences, from in-store pick-up to connected fitting rooms and digitally enabled concierge services. The boldest seek to combine multiple new-to-market innovations to completely digitalise the in-store buying experience and make the soft goods stores of today look nothing like those of old.

Brian Green, Head of EMEA Sales, Magento Commerce

Amazon is dominating online commerce, with no signs of slowing down. How can retailers stay competitive in this environment?

Amazon is clearly impacting retail shopping, and now B2B buying, and many retailers are finding it a challenge to compete. However, rather than being phased by this, retailers should take advantage of the opportunities it presents. Magento’s customers can easily add Amazon as a new sales channel, benefit from public cloud computing (AWS), and add an ‘Amazon-like’ one-click instant purchase to their own webstores. Businesses can now take advantage of a whole range of third-party marketplaces to sell their goods and services, extending their reach to new customer audiences. Nike is a prime example, deciding to sell some of their range on Amazon to capture an important extra slice of customer loyalty. Users of Magento can extend their e-commerce footprint through third-party marketplaces or create their own.

How can retailers use Magento to recognise their most profitable channels and optimise around them?

To understand profitability for both offline and online channels across all customer touchpoints, organisations need a comprehensive business intelligence strategy to pull together rich sales, fulfilment, and margin data. This requires a business intelligence capability that can consolidate and analyse data driven by e-commerce, brick-and-mortar stores, as well as traditional phone, email, and fax sales. To fully understand profitability, margin data needs to be integrated with the ERP system and inventory management, fulfilment costs need to be calculated, in addition to understanding promotion and advertising costs and how they drive sales across the different channels. Optimisation will also benefit from a deep understanding of website analytics, customer service costs by channel, as well as customer satisfaction and Net Promoter Score assessment.

Following Magento’s acquisition of RJMetrics in 2016, Magento immediately started speaking to retailers of all sizes about their analytics requirements. We quickly realised that there was an exciting opportunity to bring to market an entry-level Business Intelligence solution that was flexible and affordable, yet powerful and able to analyse on a daily basis top customers, products, and promotions to help retailers find new growth opportunities and understand repeat revenue. Our core product (Magento Business Intelligence Pro) is great for experienced retailers who are engaged in advanced cross-source analysis, but we also wanted to be able to serve those who are only just discovering the power of their data. Therefore, we developed an additional solution called 'Magento Business Intelligence Essentials', which is the perfect platform for anyone getting started with commerce analytics.

All retailers should be inspired and empowered by their data. Even if they’re not equipped with a team of data scientists or SQL experts, they should still be able to gain business-building insights from their transactional data. Magento BI Essentials enables retailers to demystify their data and answer questions like: “How are my orders growing month-on-month? Who are my most loyal customers? Is my promotion strategy working?” Armed with this information, channel managers can then optimise and grow their business. One of the greatest things about Magento is its customisability – and just like a commerce platform, commerce reporting solutions should not be one-size-fits-all. With Magento BI Essentials, retailers can define their own business metrics and customise reporting to reflect unique needs. They can also adjust anything out-of-the-box and even create an unlimited number of reports. We really do believe that knowledge is power and key to profitability.This content was originally published in RetailTechNews.