Blending Physical and Digital Channels is Just the Beginning - ShopperTrak

Blending Physical and Digital Channels is Just the Beginning

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Brian Field
by Brian Field on 4-27-17 in Industry Trends

Omnichannel promised to integrate physical and digital channels, allowing retailers to deliver a seamless shopping experience. But in reality, because of stand-alone, legacy systems, many of these channels operate in silos, making it difficult to achieve full transparency and causing missed opportunities.

Unified commerce unites an organization’s backend systems through a cloud platform so data flows between physical and digital channels in real time – breaking down barriers and, as its name implies, unifying the shopping journey. This strategy will provide customers with the single, transparent view of the retailer they desire, from inventory to pricing to promotions and beyond. Instituting a fully integrated unified commerce platform requires time and financial investment, but is critical for retailers looking to remain competitive. Most retailers recognize this and according to a Boston Retail Partners survey, 71% plan to have one within three years.

But just as the backend technology needs to be integrated, business processes also need to be aligned across all channels for a successful unified commerce experience. Here are some suggestions to help retailers look beyond the technology implementation:

Accurately Reflect Store Performance

Because most retailers separate brick-and-mortar sales from store-generated web sales, many associates view the company website as competition. If the store does not get credit, there is little incentive to spend time with customers that plan to make their purchase online.

Similarly, items purchased online and returned in the physical store can chip away at sales goal achievement. The store does not get credit for the sale because it was purchased online, and the store can be penalized for the return if the sales is made in-store. These two practices can drive a wedge between physical and digital channels and undermine the sales associates.

Another approach is to create two different reporting measures. The first accurately tracks financial performance, but is not used to evaluate the store. The second report draws correlations between the store’s performance and pre-established goals set by the corporate office.

For instance, a goal might be that a certain percentage of buy online/return in-store should result in a subsequent sale. Penalizing the store for returns would dis-incentivize associates from using it as an opportunity to re-engage customers. Instead, the store should just be credited for sales they make during the return transaction and not take the hit for the returned merchandise.

Credit Associates for All Sales They Touch

Another opportunity to break down barriers is to credit store associates for all sales they touch, even if the sale ultimately takes place on the web or in another store. Currently, if an item is out of stock, the associate may not get credit for working with the customer to find the item online or through another location. Because the sales associate loses out on the recognition, he is less likely to remain engaged with the customer if an item is not available, potentially losing a sale completely.

By using a second reporting method, retailers can credit associates for these sales – either giving full credit to both the initial store and the secondary site or splitting the sale. This gives everyone the opportunity to benefit and encourages cooperation between different channels and locations. Again, this is not a financial report but a report that measures performance objectives in order in incentivize behavior.

Re-evaluate Key Performance Indicators (KPIs)

This new era of unified commerce calls for revamped or completely new KPIs that operate across channels to present a single view of the customer. For instance, traditional business metrics such as sales and conversion rates do not take into account the various steps a customer takes along the shopping journey. This is especially true for big ticket items such as electronics. Shoppers may do extensive research online and make several trips to the retailer before purchasing. Or, they may spend an hour in the shop during the week speaking with the associate but not buy until the weekend.

Some examples of new KPIs include a “conversion influencer,” which could take into account the time spent at each particular channel and provide credit to all associates for their role in the purchase. A “sales-per-customer across channels” KPI could help retailers understand where their customers shop and why. Or, a look at in-store versus web traffic by specific geographies could identify the relationship between online traffic and individual store performance. This would help retailers make smarter real estate decision and optimize store operations.

Use Loyalty Programs to Personalize the Customer Experience

According to a recent Nielsen study, more than eight in 10 global loyalty program participants (81%) say it is somewhat or very appealing to be able to earn rewards regardless of whether a purchase was made in store, on a website or on a mobile device. For retailers, an integrated cross-channel loyalty environment that draws insights out of the data collected can help improve the customer experience.

In-store shopping can be further personalized by allowing consumers to opt-into programs that let retailers look at their online browsing or in-store purchasing history. Armed with this information, associates can be better equipped to help the customer when they arrive at the store. Items can be set aside in a dressing room or associates can proactively familiarize themselves with product features and benefits before the customer arrives.

Combine New Technology and Updated Business Processes 

Consumers use physical and digital channels for different reasons. Online, and increasingly mobile, provide convenience and variety. Brick-and-mortar provides social engagement, access to helpful associates and the ability to interact with products.

In this new unified commerce environment, retailers must keep sight of why customers shop in particular channels so they can engage with them when, where and how customers want. Robust business processes, in conjunction with the right technology, can bring customer motivations into focus and help retailers transform the shopping journey.

A version of this article was originally published in Chain Store Age.

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Brian Field Read more posts by Brian Field

Brian Field is the Senior Director of Retail Consulting Practice for ShopperTrak, where he oversees the application of ShopperTrak's proprietary solutions to retailer-specific issues across different functional areas in order to drive top and bottom line store performance. Prior to joining ShopperTrak, Brian served in roles of increasing responsibility at Chico’s FAS Inc., including as the director of corporate store operations and finance. Brian has spent nearly four decades in the industry, and his experience includes: store sales and management, training, merchandising, strategic planning and analysis for brands as diverse as David’s Bridal, Circuit City and Macy's.

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