Retailers hoping to give their customers the elusive seamless omnichannel experience are offering services that don’t particularly matter to those consumers and coming up short in the amenities they want most.
A study of more than 60 retailers in various locales and about 2,000 consumers, mostly in the U.K. and some in France, by London-based cloud software and big-data firm OrderDynamics revealed glaring disparities in shoppers’ desires and retailers’ omnichannel services.
The most lopsided misalignment was in the area of next-day delivery of orders placed online, available from 61 percent of the surveyed retailers but an accoutrement for which only 10 percent of the shopper sample would be willing to pay more.
Ranking at the top of shoppers’ wish lists but near the bottom of retailers’ functionality is the ability to specify the date and time for an order to be delivered. Fifty-four percent of the sample wanted it, more than any of the other services on which they were asked to comment, but just 15 percent of the retailers provided this “named-day delivery” option.
Nearly as many of the consumers — 45 percent — wanted the option of reserving an item in a store while online and then trying it on at their convenience, but this “reserve in-store” option is available from only 11 percent of the retailers surveyed. In a more conventional use of Webrooming, 32 percent of shoppers said they liked the idea of shopping and paying online but picking up their purchases at the store, available from 46 percent of the retailers.
“A lot of retailers, including apparel retailers, will tell you they don’t directly compete with Amazon,” said Kevin Sterneckert, chief marketing officer of OrderDynamics. “But, in reality, everyone competes with them because they’re constantly raising customer expectations from the shopping and ordering process through to deliveries and returns. [Amazon tells] you how many of an item are in stock and when you can get it delivered, and they tell you on the front page, not when you put it in the basket. People had their doubts about Zappos in footwear, but they’ve made shopping and buying a friction-free experience.
“Those aren’t the only examples, but they’re good illustrations of how customer expectations have been raised and how an ‘average’ experience just won’t cut it in today’s environment,” Sterneckert continued. “Companies that deliver an average experience today are on the endangered species list.”
OrderDynamics provides software systems that bring together elements of retail operations that are often separated in the infrastructures of brick-and-mortar retailers: For example, the customer ordering online or Webrooming from home might be able to ascertain that an item is in stock at the distribution center or a given store but not whether there is a sufficient quantity of an item or whether a particular size or color is available.
“Most retailers built their e-commerce capabilities separate from their physical commerce infrastructure,” Sterneckert commented. “The ability to order something online, in many cases, exists far away from the ability to monitor the physical existence of the inventory.”
Because the company’s software is cloud-based, software updates are available quickly, and diagnostic features can spot sources of lost sales.
“If online sales of an item are good but in-store sales weak, it could indicate there’s a problem with the item, and we’ve got algorithms designed to check those kinds of questions,” he said. “And, in a case like that, you’ve alienated both the online buyer, who may be getting something defective, and the in-store shopper, who’s passing on the sale.”
He cited research by IHL Group indicating that up to $800 million in profits are forfeited — part of the so-called ghost economy — by retailers around the world because of such infrastructural weaknesses. “That’s just money seeping through the system,” he said.
He noted that OrderDynamics focused its research on the U.K. market because it’s considered fairly far along in the move toward omnichannel retailing.
Although the identities of the retailers participating in the survey weren’t disclosed, OrderDynamics clients include retailers and brands Neiman Marcus, House of Fraser, Wal-Mart’s Asda unit, Coty, Express, Eddie Bauer, Brooks Brothers, Men’s Wearhouse and J. McLaughlin.