The New Age E-Commerce - Omni Channel Retail

By Dr. Anil Chinnabhandar, SVP- SCM, Landmark Group

The e-commerce wave has swept the consumers like never before in India. Thanks to the giants of e-commerce players, both foreign and domestic; e-commerce has taken the traditional Brick & Mortar retail into a completely different gamut! In the modern era, the lady with the smart phone has become the most powerful buyer of goods and services. Without having to move out of her lounge chair, she is able to make every progressive retailer to ‘dance to her’ music literally! Traditional retailers who had taken the customer for ‘granted’ with service levels, quality and the price have now been given a harsh dose of their own medicine. The smart customer can easily make a retailer pay hefty penalties on untimely, low quality, dissatisfied goods and services by returning the same and seek 100 percent refund on the purchase. However smart retailers’ benefit from converting such informed customers instantly by offering value for money. Omni channel is yet another opportunity for these smart retailers to offer their goods and services at the first attempt of sale itself.

Combating Retailer Challenges

Technology plays a key role in transforming the traditional ‘Brick & Mortar’ business into an Omni channel retailer. An apparel retailer with a new range of clothing, attempts to reach the target audience through variety of media. Not only an attractive display is likely to evoke interest from the customer, but also innovative ways of personalization such as magic mirror, 3D images, coordinated looks and style suggestions would induce purchase response. The idea is to use the best of the digital tools along with business intelligence to convert customer visit into sale at the first available opportunity.

Once the customer has seen the range either at a store or at a kiosk or at a digital site or even through a social network, and decides to buy the item. Next, the primary challenge is to ensure availability of preferred style, color, size. Typically stores do not carry infinite levels of inventory. In Omni channel world, customers are exposed to the entire inventory held across multiple stores, cities, warehouses, so that the first attempt of the purchase has total success. If the inventory is unavailable physically at the store, or if the customer has made a purchase online or via kiosk, the product must be supplied to the customer either on a door delivery or pick up at the store at no additional costs to the customer. Let’s say a customer has purchased a product via “endless aisle” in a store in Bengaluru, while the product is physically available at a store in New Delhi. The Retailer must ‘reserve’ that product immediately after the sale and get that product moving down to Bengaluru at the first available opportunity. This poses another big challenge with timely deliveries, quality delivery and cost optimal delivery mode.

Earning Customer Loyalty

While customer is not paying for any of the packing and shipping activities, those costs are additional to the retailer in the Omni channel environment. But the ‘cost of losing’ a customer outweighs the additional costs. Omni channel demands highest level of customer responsiveness at stores, online, warehouses, transport and at customer service teams. The backend teams who were hitherto unaware of the front-end customers and the need for quality packaging, shipping and follow-ups must be taught to adapt to the new demands within this Omni channel world. Cost of a lapsed delivery, badly packaged product or a wrong product may lead to an immediate return of the product damages the reputation of the retailer. Reverse logistics costs can bleed the retailer more than ever before under Omni channel environment.

Converting Visits into Sales

While Omni channel offers a great opportunity to acquire and impress the customer, the same opportunity may exert enormous pressure on the inventory availability, serviceability and the costs of doing business. But without Omni channel the modern retailers, especially in the fashion retail, may struggle to improve profitability. A smart retailer can ensure to ‘touch’ their target audience using digital media effectively across malls, homes, office-complex and even at the social networks and most importantly ‘convert’ that touch into a real sale and deliver a superior customer experience! That’s the strength of Omni channel Retail and has all the indications to be most appreciated by the consumer!

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