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2015 Omni-Channel Retailing Research SupplementOmni-Channel:Shoppers’ Expectations,Retailers’ ResponsibilitiesConsumers’ highexpectations forseamless shoppingand fulfillmentexperiences are puttingunprecedented pressureon retailers to perform.Feature Sponsor:

Omni-Channel:Shoppers’ Expectations,Retailers’ Responsibilitiesby Matt PillarConsumers’ growing acceptance of mobile commerce and high expectations for seamless shopping and fulfillmentexperiences are putting unprecedented pressure on retailers to perform.M ost retailers are keenly aware of the latest channelspecific retail sales statistics, but here they are incase you missed the memo:The most recent U.S. Census data tells us that e-commercerepresented 6.7 percent of total retail sales in Q4 2014.We’ve all heard from multiple sources that more than 90percent of U.S. retail sales are consummated in brick-andmortar stores.According to A.T. Kearney survey data, 95 percent of U.S.retail sales are captured by retailers with a brick-and-mortarpresence.These statistics are often conveniently drawn into arguments foror against one channel or another. Online pure-plays point to thefact that just five years ago, e-commerce accounted for only about4 percent of total retail sales, and that according to the CensusBureau, e-commerce is enjoying a long-term average annualizedgrowth rate of nearly 17 percent. That blows away the whole ofretail — which has grown at just 4.54 percent since 1993. Surely,these stats tell us the future is online.Staunch proponents of brick-and-mortar, on the other hand,point to the sheer volume of U.S. sales that happen in a physicalenvironment.Retail omni-channel strategists should resist being enticed by thesimplicity of either one of these stats-based arguments. The stat thatreally matters is this:95 percent of U.S. consumers frequently or occasionallyshop retailers’ websites and stores.That doesn’t mean that where shoppers swipe their cards is inconsequential. The path to the purchase is rarely direct — and evenmore rarely channel-specific — but it does affect the retailer’s salesoutcome. In this report, we’ll take a closer look at the modern consumer’s shopping behavior through analysis of the latest l Retailing Research Supplementon the new path to the purchase, and we’ll explore the experiencesthat influence the consumer’s moment of truth. We’ll also discusshow retailers are influencing those experiences and how wellmanaged consumer touch points — in every channel — createveritable control levers that can positively affect the outcome forshoppers and stores.The Shopper’s ComplicatedCross-Device, Cross-Platform ExpectationsOver the course of just two decades, the shopping process haschanged dramatically. Modern consumers carry access to virtuallythe entire world from the smartphones in their purses and pockets,and the latest research tells us they’re using it. Research from thenew Demandware Shopping Index — based on analysis of the shopping behavior of 100 million consumers — concludes that theshare of retail order volume driven by smartphones increased anincredible 61 percent from 2013 to 2014. The study found thatsmartphones accounted for 33 percent of e-commerce traffic lastyear, up 10 points over the year prior and 16 percent of e-commerce orders. As digital retail engagement goes, PCs continue tofacilitate the most e-commerce sales at 67 percent, but e-commercesite visits from computers were down 16 percent year-over-year.Tablets drove 14 percent of traffic and 17 percent of orders.Smartphones are the fastest-growing by far.Increasing consumer use of digital devices to research and buycreates a touch point proliferation challenge for multichannelretailers. As if maintaining channel congruence wasn’t tough enough,now we have to maintain consistency in presentation across multiple mediums within the digital channel alone. The aforementionedShopping Index report found that consumers are increasingly movingacross digital devices during the course of their shopping journeys,as more than one in five consumers used multiple devices —including computers, smartphones, and tablets — to shop duringQ4 2014. That’s up 14 percent over the year prior.If the proliferation of devices driving traffic to your e-commerce

sites isn’t enough to understand and manage, consider that these figures track trafficand order volume to those sites alone.They’re revealing statistics, but they don’teven account for all the retail research andretail-related social activity taking placeon Facebook, Pinterest, and other socialnetworking sites.The Retailer’s DeviceAnd Platform ProliferationImperativeThe provision of a consistent shoppingexperience across digital devices — anddigital platforms — is clearly importantto consumers. The trend data we’ve discussed so far only serves to indicate thatit will become even more important to moreshoppers in the short term. So, what canyou do about it? Sync up the experience.Your customers move from one deviceto the next at various points throughoutthe day. In the morning, it’s the tablet atthe breakfast table. During the day, it’s thedesk or laptop computer at work. In theevening and on weekends when they’reon the go, it’s the smartphone. Windingdown on the couch at day’s end, it’s backto the tablet. Does the digital experienceyou’re delivering shift with them?Often, multichannel retailers fail to lookpast their own controls in the effortto deliver interdevice consistency. Thosecontrols include brand presentation, price,and promotions delivered via devicespecific (or native, agnostic) apps andbrowsers. Beyond getting content delivery right from a platform perspective,engaging digital consumers requires customer segmentation, which is the facilitator of the personalized presentation thatdrives shopper response. According tothe Radicati Group’s Email Statistics Report,2014-2018, consumers send and receive116 work-related and 88 nonwork-relatedemails each day. Much of that email usageis mobile; in 2014, worldwide mobileemail users totaled 1.1 billion, a figureRadicati expects to double by 2018. Thatcrowded field makes it difficult to standout and get noticed, so personalizationand relevance are absolute necessities.While personalizing promotions acrossdigital devices is foundational, it’s notenough to meet the modern customer’sdigital experience expectation. As consumers engage your digital presence onmultiple devices, they expect consistencyin the part of the experience that theycontrol, not just what’s received in theirinbox. The shopper’s wish lists, shoppingcarts, personal promotions, search history,and recommendations should be one andthe same from one device to the next, sothe personal experience picks up on thesmartphone where it left off on the laptop.While multidevice engagement withconsumers is a two-way street, it’s incumbent on the retailer to initiate and consistently execute on the engagement. Whilecomplex and ever-changing, the reward issignificant. The recent Gallup State of theAmerican Consumer report found that “customers who are fully engaged represent anaverage 23 percent premium in terms ofshare of wallet, profitability, revenue, andrelationship growth compared with theaverage customer.”The Consumer’s In-StoreExperience: Associates WantedWe kicked off this report with some insightinto digital device engagement for goodreason; it’s the fastest-growing venue fornurturing — and consummating — B2Csales opportunities. But, as e-commercehas matured and increasingly gone mobile,traditionally brick-and-mortar retailershave learned some sales-enabling lessonsabout the influence of digital commerceon the path to the purchase. Accordingto the 2014 Pulse of the Online Shopper fromUPS and comScore, 54 percent of onlineshoppers have had items delivered to thestore at some point, and of those, 43 percent made additional purchases at the store whenthey arrived to pick up their order.The coalescence of the digital and physical worlds is clearly a profitable opportunity. But, while it’s fairly easy for retailersto influence an increase in store pickupof online orders — via manipulationof incentives such as free ship-to-storeoffers, for instance, to fully exploit theconsumer’s increased spend at the store,retail associates at the store have to bemore engaged.In its 2014 report Customer Desires Vs.Retailer Capabilities: Minding The Omni-ChannelCommerce Gap, Forrester Research reportedMore thanone in five consumers usedmultiple devices —including computers,smartphones andtablets — to shopduring Q4 2014.Customers who are fullyengaged represent anaveragepremiumin terms of23%share ofwallet,profitability, revenue,and relationshipgrowth compared withthe average customer.61% ofconsumerssaid theystill valueor highlyvalue asking a salesassociate for productrecommendations.Omni-Channel Retailing Research SupplementlRetailSolutionsOnline.coms3/17

68% ofthat 61 percent of consumers said theystill value or highly value asking a salesassociate for product recommendations.But reality has lowered the consumer’sexpectation of that actually happening.The 2014 Retail Satisfaction Barometer reportfrom CFI Group found that a full 76percent of consumers report never having been assisted by a technology-enabledstore associate. Among the few consumers who have been, 55 percent saidthe interaction wasn’t at all helpful. Theaforementioned Forrester study underscores the cross-channel disconnect thatall too often happens at the store level;it reports that 68 percent of consumersshopping in a physical store expect thesales associate to demonstrate expertiseon the products offered in-store, and45 percent of consumers expect thatexpertise to extend to the brand’s onlineproduct assortment.And yet there’s that CFI Group datathat tells the story of retail associates’execution of cross-channel productknowledge. Consumers say that 77 percent of the time, store associates showoccasional or frequent ignorance of Webpromotions.The Retailer’s In-StoreExperience ImperativeTo demonstrate channel continuity instores, many brick-and-mortar retailershave begun meeting digital with digital.They’ve layered interactive, Web-enabledtouch points, kiosks, and touch displays, for example, into the store atmosphere. Increasingly, they’re also usingproximity-based marketing tools such asiBeacons to engage consumers via theirmobile devices. These approaches havemerit, and they’ve proven successfulas a means of interacting with opt-in,digitally inclined shoppers. But the consumer expectations outlined above indicate that without associate engagement,their reach is limited. That engagementrequires increased visibility into crosschannel inventory and product information at a minimum, ideally enabled byassociate-held mobile devices that allowthe engagement to happen in real time inthe store aisle. For those tools to work,inventory silos must come down.s4/18RetailSolutionsOnline.comlAn even better, more differentiatingexperience is enabled when the associatecan leverage a mobile device to accessnot just enterprisewide inventory data,but also personal consumer data, suchas preferences and shopping history.This month’s feature story on NeimanMarcus illustrates how the retailer isusing an array of digital devices — bothmobile and fixed — to initiate associateinteraction with customers.While Neiman Marcus is ahead of thecurve in enabling in-store digital accessto inventory and customer data, manyretailers are playing catch-up with consumers who typically have more andbetter access to product information andproduct accessibility. In the omni-channel present, associates simply must beequipped with the technology that offersmore knowledge than that which is intheir heads and on-hand in their stores.While the aforementioned Gallup studydownplays the threat of showrooming,the 40 percent of consumers who havemade online purchases from competingretail brands while in a store are far morelikely to continue doing so if what they’relooking for is neither on your shelvesnor accessible on your e-commerce site.Importantly, the visibility of all-channelinventory availability works both ways.While in-store access to online inventory saves on-site sales and combatsthe perceived threat of showrooming,online access to in-store inventory drivestraffic to stores. In the Forrester study,71 percent of consumers said the ability to view inventory information forin-store products while shopping onlineis important or very important. Only32 percent of the retailers Forrestersurveyed offer this capability on theire-commerce sites.The Consumer’s BrokenContact Center ExperienceAs omni-channel retail press goes, digitalcommerce seems to get all the gloryand stores all the doom. Little credence is given to the contact center, butfor consumers, customer service contact remains incredibly important to thebrand experience and thus, an incrediblyimportant piece of the omni-channelOmni-Channel Retailing Research Supplementconsumers shoppingin a physical storeexpectthe salesassociatetodemonstrateexpertise on theproducts offered in-store.The40% ofconsumers whohave made onlinepurchases fromcompeting retailbrands while in a storeare far more likely tocontinue doing so ifwhat they’relookingfor isneitheron yourshelvesnoraccessibleon youre-commerce site.BUY

71% ofconsumerssaid the ability topuzzle. Here’s proof: CFI Group reports that70 percent of consumers tend tocall customer service regardingboth online and in-store issues.The same report cites 87 percentof consumers saying it’s important to be able to call customerservice to check a local store’sproduct availability. According to the earlier-mentioned 2014 Pulse of the OnlineShopper from UPS and comScore,the lowest point of satisfactionamong consumers using digitalchannels is a lack of access to customer service information withinthe checkout experience — onlyhalf of consumers report satisfaction with that availability.view inventoryinformationfor in-storeproducts whileshopping onlineis important or veryimportant.24/7Shoppers surveyed for the2014 Omni-Channel Insightsreport from CFI Group saythat they occasionallyor frequently receiveinformation fromcontact centers thatconflicts with thatpresented in otherchannels a whopping78% of the time.Despite the evidence that contactcenter access to cross-channel data isimportant to retail customer service,retailers have collectively failed miserably at equipping contact centerswith comprehensive inventory, product detail, and customer information.Shoppers surveyed for the 2014 OmniChannel Insights report from CFI Groupsay that they occasionally or frequentlyreceive information from contact centers that conflicts with that presented inother channels a whopping 78 percentof the time.The Retailer’s ContactCenter ImperativeTo connect all their omni-channel dots,retailers need to equip customer-facingteams at every touch point — includingcontact centers — with the data accessthey need to respond to any customerinquiry or concern. The omni-channelcontact center should be a clearinghouse of data from every consumertouch point, including e-commerce,physical stores, catalogs, and even socialmedia. It should be a focal point in themanagement of consumer interactionwith the brand. Yet, according to theaforementioned report from Forrester,36 percent of retailers cite a lack ofcontact center technology as a top barrier or challenge preventing them frombecoming an integrated omni-channelcompany. Another 40 percent cite theintegration of back office technologyacross channels — which is the underlying framework that enables the omnichannel contact center — as a top barrier to omni-channel maturity.Regardless of the contact center toolsat your disposal — whether IVR (interactive voice response), chat, SMS, or“old-fashioned” live telephone support— simply presenting access to customerservice in any channel won’t improvethe customer’s contact center experience. Those tools — and the contactcenter associate who uses them — needto be fed live, all-channel inventory andcustomer data in real time.The Consumer’sPostSale ExperienceThe consumer’s omni-channel buyingexperience — and the retailer’s abilityto satisfy it — are often predicated onorder fulfillment and returns management.As order fulfillment goes, consumersseek free, not fast. According to theaforementioned report from CFI group,a full 90 percent of customers considershipping costs when shopping online,and 65 percent say it’s very important intheir order decisions. By contrast, only19 percent of shoppers consider expedited shipping very important. Most arewilling to wait 4 to 6 days, but 58 percent say that willingness to wait is predicated on a delivery window guarantee.That data is corroborated by the Pulseof the Online Shopper report from comScore, which reports that free shippingoffers influenced 81 percent of digitalshoppers’ online purchases in 2014.In fact, the report says, 58 percent ofonline consumers added items to theircarts to qualify for free shipping.Once products ordered online arereceived, the ease of returns facilitationpresents another clear omni-channelsales influence on consumers. As statedby A.T. Kearney in its 2014 report OnSolid Ground: Brick-And-Mortar Is TheFoundation Of Omni-Channel Retailing,“returns is the stage in the shoppingjourney where consumers demon-Omni-Channel Retailing Research SupplementlRetailSolutionsOnline.coms5/19

36% of retailersstrate the highest preference for physical stores,” and “for online pure-plays,returns are a dead-net cost; for a brickand-mortar store, a return is a potentialnew sale.”The Omni-Channel Insights report fromCFI Group provides the numbers toback up the A.T. Kearney statement. Afull 93 percent of consumers want theability to return purchases made onlineto local stores.The Retailer’sPostSale ImperativeThe consumer’s combination of manageable urgency and delivery windowexpectation plays well to fulfillment andreturns strategies that involve the store.With any-channel visibility into enterprise inventory, cross-channel retailerswith brick-and-mortar presences enablean opportunity to create a more efficientmeans of order fulfillment than pureplay online retailers, which lack a physical store infrastructure. For example,by 2013, Walmart was shipping morethan 10 percent of the items orderedat walmart.com from any number ofits stores, and more than 50 percent ofthose items were delivered within twodays of being ordered. While small andmidsize retailers have long been fulfilling online orders from store inventories, merchants of all sizes can now beequipped with the technology that determines the smartest and most efficientsource of order fulfillment, based oninventory and proximity to the customer,provided they’re enabled by centralized,all-channel inventory visibility.It’s that same combination of inventory visibility and physical store networkthat enables the even more efficient buyonline, pickup in store (BOPIS) permutation that drives add-on sales. But to gainthat efficiency, retailers have their workcut out for them enticing shoppers tochoose store delivery. According to thePulse Of The Online Shopper report, nearlythree-quarters of online consumers prefership-to-home, and Forrester notes thateven the 41 percent of shoppers who buyonline for in-store pickup expect to benotified that their order has been pickeds6/20RetailSolutionsOnline.comland is ready for collection in less than anhour. Nearly 40 percent of online customers would be more likely to completean online purchase for in-store pickup ifthe retailer can quickly confirm that theorder is ready. Apparently, seamless communication is nearly as important to consumers as seamless inventory visibility.Regardless, building the volume ofBOPIS sales seems an omni-channelchallenge worth pursuing. Retailers thatoffer free shipping and fast picking ofitems to be picked up in stores couldexperience the potential benefits of additional online purchase volume to meetthe free shipping threshold, add-on salesat the store level when orders are pickedup, and the logistics efficiencies enabledby fulfillment from store-level inventory.And, the stats indicate that offering buyonline, return to store drives more acceptance of e-commerce due to comfortwith a flexible returns policy.Conclusion:Visibility Any-ChannelEmpowermentThere’s a clear and common themeweaving its way through this report:none of the consumer’s omni-channelretail expectations are possible to achievewithout enterprisewide inventory visibility at a minimum. That’s the foundationnecessary for the multidevice, order management, customer service, and logisticsapplications that enable the flow of information across sales channels. Ultimately,it’s the foundation necessary to allowthe flow of sold products from sites andstores into consumers’ hands — efficiently and profitably.For brick-and-mortar retailerswith e-commerce sites — the artistsformerly known as multichannel retailers— the steps to achieving the vague andvaunted status of omni-channel are manyand variable. Their order and criticalityare dependent on your understandingof your customer’s expectations. Butthe necessity of centralized data —and the integrated order management,POS, and CRM applications thatenable the visibility of that data — arenprerequisite.Omni-Channel Retailing Research Supplementcite a lack of contactcenter technology as atop barrier or challengepreventing themfrom becoming anintegrated omnichannel company.90% of customersconsider shipping costswhen shopping online,and65% say it’s veryimportant in their orderdecisions.

Automation And Software IntelligenceOptimize Omni-Channel Distribution93% of consumerswant the ability toreturn purchasesmade online tolocal stores.Jerry Koch,director,corporate marketing& product mgmnt.,IntelligratedMore than ever before, businesses depend on logisticsas a competitive mechanism to increase productivity andprofitability. As distribution operations strive to deliverthe high service levels customers expect, they facechallenges to balance costs, accommodate rush ordersand demand spikes, and leverage shared inventory, allwith a dwindling labor pool.With quality labor in high demand, advancementsin material handling technology and software arecritical to maximize workforce efficiency and fulfillmentaccuracy. Intelligrated offers labor management software, pickingtechnologies, and solutions development services to deploy labor in theright place at the right time and enable peak performance.As distribution operations squeeze maximum efficiency from individualprocesses, translating these efficiency gains into overall operational benefitrequires a software platform to remove the silos of traditional warehousesoftware and eliminate islands of automation. Intelligrated warehouse executionsystems drive the entire fulfillment process from a single source, makingreal-time decisions based on constant analysis of labor, process, order, andequipment information to maximize fulfillment efficiency.nThe Secret Ingredient For Omni-Channel SuccessBy 2013, Walmart wasshipping more than10% of the itemsordered at walmart.comfrom any number of itsstores, and more than50% of those itemswere deliveredwithin two daysof being ordered.Omni-channel strategies such as “buy online, ship fromstore” reduce the time it takes to deliver Web orders to acustomer’s home by a day or more. And “pick up in store”services provide instant gratification for “I want it now”shoppers. That’s great news for companies that want touse stores as competitive advantage against e-tailerssuch as Amazon. But retailers face three major challengesin executing omni-channel processes:Dave Andrews,director of marketing The goal of improving customer service is at odds with theincreased work stores are expected to complete — fromcommunications,Reflexis Systems, Inc. more revenue-driving product launches and promotions tonew omni-channel tasks — but without an increase in laborhours. Associates are under severe pressure, putting customer service at risk. Store operations complexity and the number of store-facing systems are also increasing. But associates need simpler workflows: one place to view the most important tasksand alerts coming from multiple sources. Associates don’t need more siloed applications. Increased omni-channel demand will severely impact store labor costs andcause disruption during peak customer traffic hours. Retailers need to optimizetheir processes and create a flexible environment that provides just-in-timecoaching so associates can cover all in-store activities and respond to changingworkload and customer demand.Retailers solve the above challenges by implementing a real-time store execution and workforce management platform on in-store mobile devices. Retailerscan provide a single app on tablets and smart phones to view prioritized alertscoming from multiple store systems — even ones not inherently mobile —including optimized omni-channel pick, pack, and ship tasks from order management software. Store managers and associates efficiently complete omnichannel fulfillment. And, the system provides best practice actions to respond toother tasks, interruptions, workforce matters, and customer-facing opportunitiesto provide a seamless and satisfying shopping experience.nOmni-Channel Retailing Research SupplementlRetailSolutionsOnline.coms7/21

Omni-Channel: Shoppers' Expectations, Retailers' Responsibilities Consumers' growing acceptance of mobile commerce and high expectations for seamless shopping and fulfillment experiences are putting unprecedented pressure on retailers to perform. by Matt Pillar s2/16 RetailSolutionsOnline.com l Omni-Channel Retailing Research Supplement

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