What Are the Benefits of Operating an Omni-Channel Retail Business?
Retailers should not operate in silos; they will drive higher sales when taking an omni-channel approach to running their business in the mobile age.
That’s the perspective of luxury department store chain Saks Fifth Avenue, an article on Retail Info System News website reports. Saks’ omni-channel transformation includes deploying about 2,000 iPads for store associates to assist and engage customers, launching an e-commerce website of its outlet chain OFF 5TH and boosting its online inventory.
The omni-channel makeover is a costly undertaking — the retailer has spent well above $100 million — but it’s part of a plan to push more customers to shop the brand’s multiple channels, such as mobile, web, etc. Why? Multichannel buyers tend to “spend three to four times what single-channel shoppers spend,” Saks CEO Stephen Sadove tells Retail Info System News.
“We think that over time omni-channel will drive higher sales, inventory productivity, as well as gross margin,” Sadove continues. “And it really starts with the consumer who is converging [on[ the store and the digital space. They want the advantages of the stores [and] they want the advantages of digital.”
Other retailers should take note of Saks’ digital change, but when rolling out mobile devices, the goal should be to enhance engagement with the customer. That’s hard to do with a mobile app if the information is coming from disparate sources. The idea is to have more of the data in one place so that multiple types of data can be viewed at once.
For example, it would be good to identify a customer in the store as someone who has made a purchase there before. If the salesperson could see that the customer has a tendency to purchase a certain product, he could take proactive steps, such a checking inventory levels at other locations if the store is running low on that product.
The advantage of omni-channel retailing is that the retailer goes to vendors as a single entity. That coordinated effort can lead to better pricing and services with vendors. But the key is to focus on omni-channel retailing throughout the whole process, from purchasing to financial reporting and everything in between.
It does require a change in thinking. Saks, for example, no longer separates its online sales in its reporting. The bottom line is that retailers no longer can think of their physical stores and e-commerce website operating independently.
Source: Retail Info Systems News, June 2013