All the Shopping Streets
The boundaries between the physical reality and the digital world are blurring: customers increasingly demand an omnichannel shopping experience. As a result, so-called pure players are seeking to strengthen their bricks-and-mortar presence. Amazon, for example, has just signed an agreement with Kohl, a US retailer with more than 1,100 stores, to allow Amazon customers to return products purchased online at their chain stores. This is just the latest in string of operations carried out by the Seattle giant: last June, it purchased Whole Foods, a supermarket chain with 400 stores in North America, adding to the eleven bookstores, two stores for the delivery of fresh groceries, and a number of locker units distributed throughout the US territory.
On the other hand, traditional retailers are asking themselves how they can provide a truly omnichannel shopping experience: the Carrefour executive board includes a transversal corporate function dealing with customer management and digital services, to guide and coordinate the global process of digital transformation of the supermarket group.
Achieving omnichannel selling thus becomes more and more priority in the strategy agenda of Italian and international companies. But to what extent are companies really omnichannel today? Scratching bit under the surface, it sometimes becomes apparent that omnichannel is more aspiration than substance: it is left to the sole responsibility of certain corporate functions, without triggering radical transformation in organization, processes, people, skills and technologies.
This is what emerges from a research study where an omnichannel maturity model was tested on 10 large-scale retailers, in a research study put together with colleagues Elisa Pozzoli and Marco Bettucci of SDA Bocconi School of Management. The model was developed in collaboration with Oracle and SopraSteria and analyzes the level of omnichannel operativity attained by a company.
Evidence shows what are the priorities of an omnichannel strategy for a retail company. The first concerns product mix and price policy: you have to make a unique selling proposition to the customer, by ensuring a certain level of consistency between online and offline offerings and avoiding price differences that are hard to justify. The second is data analysis: service improvement actions are increasingly being generated by the analysis of customer behavior through the web.
Third, never forget the physical dimension, the management of the last mile, i.e. the delivery of the product to the final customer and the eventual refund. Supply chain management is one of the main drivers of omnichannel transformation, but it can also be, if not properly managed, one its main hindrances. The companies surveyed are focusing mainly on order fulfillment and product delivery processes, trying to provide a wide range of delivery options and offer a view of stock availability to the end customer.
The weaker areas, with respect to which companies still have to turn many questions into answers, relate to the organizational model, performance indicators, and incentive mechanisms. Companies turn out to be very cautious when it comes to introducing new technologies in a way that would significantly change stores' lay-outs and styles, and thus customer experience. Amazon, however, is working at the inauguration of Amazon Go, the first digital supermarket with no cashiers waiting at the exit, which is set to open in Seattle in the coming months. In fact, despite the skepticism recorded in the study, in-store technology tools may become the most relevant component of a retail corporation's omnichannel strategy.