Is Omnichannel dead? 5 Factors driving retail transformation


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Retailing has already crossed the omnichannel tipping point

By Chris H. Petersen

Last week I had the opportunity to address the RVCF Annual Fall Conference. The best part about being a speaker at events is that you also have an opportunity to network with a great audience, who are actually “living retail reality” on a daily basis. The title of my RVCF presentation was the: “Future of Retail in an Omnichannel World.” In the course of ensuing discussions with both retailers and vendors, it became abundantly clear that “omnichannel” is not an objective or “end state”. Omnichannel has literally become an underlying foundation for the rapid evolution of future retailing. A primary driving force for the accelerating rate of change is the fact that omnichannel consumers keep “moving the goal posts”.

Why this is important: The future “ain’t what it used to be”. To thrive will require more than channel strategy … it requires keeping pace with the rapidly evolving consumer patterns and expectations of where and how they will purchase.

Beyond omnichannel … the “boundary-less omnipresence”

“Omnichannel” is a relatively new term that emerged in about 2008. Omnichannel was used to describe the changing pattern of customer behaviors related to shopping in more than one place, through channels beyond traditional stores. In previous blogs I have highlighted the theme: omnichannel is the new normal for consumers“.

So, what’s changed? In 2016, omnichannel is no longer a “special case”. A majority of consumers now shop in more than one channel. But more importantly, most every retailer l spoke with last week is reorganizing to “be omnichannel” in some way. In fact, several retailers pointed out that the term omnichannel is now “obsolete”. The future of retailing is not really about “channels” at all … but now all about how retailers must now connect and transact with consumers across time and space. Said another way, today’s consumers are now channel agnostic, and in fact, retail is now where the consumer shops at a moment in time. 

Omnichannel shopping

Image Credit: Viktor Hanacek

 Themes and driving forces of omnichannel transformation

In my conversations with both retailers and vendors, there were new themes and terms being used to describe the transformation of retail. Some of these factors are “pain points” in the sense of how retailers are scrambling to adapt. Some of them are simply better descriptors of today’s consumer behavior, and their expectations for their “retail experience”.

1.  “Boundary-less”

I have often described omnichannel as the behavior of consumers shopping “anytime and everywhere”.  That description is still very accurate.  But, there is a new descriptor which may better describe both the state of consumer shopping AND the retailer transformation to respond to consumer omnichannel expectations – “Boundary-less”. 

Several retailers suggested that the term boundary-less is far more descriptive than omnichannel.  Omnichannel implies that retailers must organize to “sell” in more than one way (e.g. online and stores).  Boundary-less better captures the essence of how retailers must engage with consumers on their terms, where they are, and how they prefer to shop at this moment in time.  Today’s retailing is boundary-less in the sense:

  • The are no boundaries of when consumers shop
  • No physical boundaries of where consumers shop and purchase from
  • Retailing now transcends boundaries of states and even countries
  • “Purchases” are not defined by a “sales transaction” … a purchase is now a journey that is boundary-less in scope, sources, touch points and time

2.  Omnipresence

One of the key concepts I illustrated in my presentation on the future of retail was how consumers shop in many ways in every corner of the globe.  Consumers now have mobile phone portals that enable virtual shopping in the most rural areas of Africa, Asia or India.

A number of retailers and vendors made a very interesting observation … “omnichannel is dead”.  Their point is that retail has/will need to move beyond the concept of consumers shopping in more than one channel.  The new term being now being used is “omnipresent”.  Retailing quite literally has become engaging “all the time and everywhere”.  

Omnipresent retailing poses one of the greatest challenges and opportunities.  Retailers must carefully evaluate where their core customers “are”, and where they can afford to engage … not just to sell products, but to build and sustain relationships.  

3.  Mobile dominates

Purchases by mobile phones is currently estimated to be less than 3% of retail sales.  If it is mobile purchase is so miniscule, why is it talked about so much as a driving force for the future of retail?  In short, mobile smartphones enable omnipresence, boundary-less engagement.  Today’s “store” is literally in the palm of the consumer’s hand.  The following stats quickly highlight why mobile engagement is critical:

  • As much of 60% of consumer search is on mobile devices
  • 65% of retail purchases involve a mobile device in the purchase journey
  • 70% of local mobile searches resulted in purchases

4.  Omni is NOT for Wimps!

Being able to be “omnipresent” and boundary-less is HARD work!  It also requires considerable investment and infrastructure that has not been part of traditional retailing.  Consider the implications of the following omni consumer scenario:

A consumer can’t sleep and elects to search for an important holiday gift in the middle of the night.  She is likely to purchase it, but wants to reserve it, so she can personally view to check the quality, style and texture before purchase.  The item is bulky, so she doesn’t want to carry it to the office.  She wants to make a mobile payment by phone in store, but collect the purchase at a pick up point that is convenient to their train on the way home.

The above scenario is NOT fantasy.  All of these omni shopping and purchase capabilities are being offered by retailers somewhere in the world today!  While retailers can that argue all of this is not necessary or possible, the question is:  how many future boundary-less customers will be lost because they are are using their phones to search for a convenient experience to shop and purchase on their terms and timeframe?    


Image Credit:

5.  Results Count … but need new metrics to measure ROI

The reality is that retailing is a business that must make a profit.  While it might be noble to aspire to be omnipresent, there are real world constraints of infrastructure, time and resources.  Implementing a “click and collect” option in stores can be a complete disaster if the staff are not properly trained and/or the customer has to wait in long lines, or worst case – the purchase to be collected is not the right one!

As per our previous blog post, traditional retail systems were built upon the concept of merchandising displays and converting product sales in store.  The foundation metrics of sales, revenue and gross margin still apply. 

But … and this is a big BUT … senior management now must evaluate what omni investments mean in terms of creating customer relationships, generating repeat trips and purchases, and generating loyal relationships which generate life time value.  Without new metrics beyond the POS sales transaction, it is impossible to measure the ROI on investments in systems and mobility to engage customers anytime and everywhere.  

The single greatest challenge for the retail C-Suite will be the transformation investment tradeoffs to embrace the opportunities of an omnipresent, boundary-less consumer … without going bankrupt trying to do it all.

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  • Omnichannel Coffee Shop Consumer: Viktor Hanacek;
  • POS Omnichannel Image:

Republished with author's permission from original post.

Chris Petersen, Ph.D.
Chris H. Petersen, PhD, CEO of Integrated Marketing Solutions is a strategic consultant who specializes in retail, leadership, marketing, and measurement. He has built a legacy through working with Fortune 500 companies to achieve measurable results in improving their performance and partnerships. Chris is the founder of IMS Retail University, a series of strategic workshops focusing on the critical elements of competing profitably in the increasingly complex retail marketplace.


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