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The Retail Omnichannel Has Been With Us For Years, But Retailers Still Fail

24th May 2016

The Wharton School of the University of Pennsylvania recently published a paper in their Knowledge @ Wharton journal focused on the failure of retailers to adopt a omnichannel service style even though the benefits of doing so have been clear for at least six years.

Wharton researchers believe that many retailers are finding it extremely hard to deliver a true omnichannel experience that approaches what customers expect so they prefer to hide their failings or just rename the strategy.

In the Wharton paper Beth Ann Kaminkow, former executive vice president of the Westfield shopping centre company and currently COO of Wearable Experiments, a wearable technology firm, said: “We’re a long way off” from a true omnichannel experience.” Kaminkow added: “There’s still distance; it’s way off in the future. That’s why people prefer to rename it or not talk about it.”

What is the problem that Wharton is identifying?

The paper suggests that retailers selling shoes is a good place to start. Walk into a shoe store today and the experience is almost exactly the same as you might have known 20 or 30 years ago – before the Internet and social networks. Before all the multiple information channels we now have, you walked in the store, tried on a pair of shoes and bought them if they felt OK. In 2016 this is still how most people buy shoes.

Wharton identifies three areas that are blocking true omnichannel adoption:

1. Integration of the front-end and back-end; it’s hard to create a complete picture of your stock and supply chain and most retailers manage by carrying more stock than they need. It’s expensive to improve this, but essential if online is to be blended with the physical retail store.

2. Finding the right expertise; most tech and CRM or supply chain experts are involved in technology companies, not retailers. Many retailers struggle to hire the right skills and find that contracting expertise is expensive.

3. No industry collaboration; in some areas of retail it might be beneficial for all competing retailers to work together to improve their area of the market, but there is very little collaboration and just a strong sense of competition between brands.

I thought that there was a particularly important comment within the Wharton paper where it asks the question, if we were building this retailer from the ground up today then how would the online service work and what would customers really want from a physical store? It’s a good question because it is clear that customers want both, but in an omnichannel world the purpose of the physical store may no longer be just for sales alone.

The Wharton paper is a fascinating exploration of the retail omnichannel and how some retailers might need to just create a new ‘blank slate’ strategy if they want to succeed in future. You can read the complete paper on Knowledge @ Wharton here

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David Turner
Article by: David Turner

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