What’s In A Name? The Omnichannel Debate

What do you get when you bring eight payments, retail and commerce executives together to debate whether omnichannel is the future of retail?

A consensus that things on the omnichannel front need to move much faster.

Don Kingsborough, retail pioneer and payments innovator, and eBay’s Mark Lavelle, SVP of Product and Strategy for eBay Enterprise and GM of Magento, led a group of six payments, retail and commerce executives at the Innovation Project 2015 in a free-wheeling discussion about a concept that some said still needed a “there, there” to make it real. That discussion surfaced a diversity of opinions about how and when the trend du jour will be a reality for most retailers.

But there were two things that all agreed with at the end of this 80-minute closed door conversation: that the definition of “omnichannel” is still way too open-ended, and while things are headed in the right direction, they’re not moving fast enough.

“[The panel] was less excited about omnichannel than I thought they would be,” said Kingsborough who was PayPal’s head of retail until he left the firm in January. “[Omnichannel] is still happening so it’s a surprise that this group didn’t jump on it.”

Kingsborough believes that there will continue to be progress over the next two years as retailers press ahead, but expects that progress will be slow. Still, he expects to see some real success stories from retailers who choose to direct their mindsets — and budgets — toward a seamless future where retailers move as fluidly between channels as their customers do — and adapt their infrastructures accordingly.

So what’s holding the industry back? Following the panel discussion, Lavelle shared his view on the one key barrier to breaking the omnichannel logjam: getting over the cultural shift.

“The point that culture is a barrier to change doesn’t come out as obviously all the time. So a retailer’s mentality of where they are probably coming from probably dictates more than any technology barrier or business barrier,” Lavelle said. He also said the term omnichannel remains a bit in limbo until the industry finds another way to define the concept, or simply implement it without have to apply a specific label to the set of activities that it encompasses.

“I agree that the term [omnichannel] has deviated,” Lavelle said. “Yet, we struggle to call it anything else. But eventually the ‘e’ will drop off from eCommerce, the channel will drop off retail. [Omnichannel] is just retailing — it’s connecting with customers, it’s the basics. And so we’re in the kind of middle period where things are thought of separately. But that I think that will change and we’ll get better terminology over time,” he offered.

But why is there such a debate about omnichannel as a term and why does the concept of delivering a more customer-centric experience even need its own special term? Because to start a culture shift, the conversation has to start somewhere, Lavelle said.

“There’s nothing better to call it and you need to kind of identify it so you can have the conversation. Words are meant to have a meaning and if you don’t understand it, that’s what starts the conversation,” he said. “Having an omnichannel conversation is a curiosity to begin with. If you’ve done retail the same way for 100 years, the term is meant to draw you in and say ‘what does that mean?’ Well, it means marketplaces, using our stores as distribution centers, global apps, [etc.]”

While the panel was a bit more bullish on the definition and how the concept was actually transforming retail, Lavelle was less pessimistic about the rate at which retailers are embracing these new strategies. Sure, it may not be at the pace which the retail industry could be, but there are retailers actively leaning into the concept, he said, and that has helped the transformation. The technology is available, and the need is warranted — particularly as consumers turn more to online channels and less to physical stores for the start of their shopping experiences. But the brick-and-mortar and online experience must be seamlessly connected in order to enable what consumers are demanding.

Luckily, there are innovative retailers to lead the charge, Lavelle said.

“The innovation is happening at a rapid pace. I see less and less resistance. I see less and less that are quote on quote not solvable,” Lavelle said. “I think the technology is there. I think the companies are there that need to do the work. Retailers tend to move when they see really empirical results and I think for now with omnichannel, we have many use cases where this is transforming businesses.”

And what about the rest of those executives who joined the panel at Innovation Project?

What did they conclude? Well, the off-the-record-conversation had plenty of juicy sound bites about what the retail innovators really thought – and for those who weren’t in the room, here’s just a bit of insight into what the group had to say.

The panel concluded that the omnichannel is what’s used to define how retailers are using technology to become customer-centric and creating a seamless shopping experience for consumers between the mobile, the Web and brick-and-mortar channels. Still, the panel concluded that there are conflicting interests about how omnichannel is approached. Tech companies want change, but retailers aren’t always willing to embrace it. And, then, who pays for it?

“The entire customer journey is an omnichannel journey today,” said one panelist who made the point that mobile, Web and brick-and-mortar experience must mesh into one branded model. Consumers are already doing omnichannel by buying online and picking up in store, or by buying online and returning in store — but retailers aren’t always aiding the experience to their full capacity, one panelist noted, observing that better technology and better online shopping experiences are still needed.

“Pure retail is dead,” one panelist asserted, somewhat controversially, suggesting that the business model of companies like Web giant Amazon is also dead if they don’t figure out how to get an in-store presence — something Amazon has already hinted they’re working toward. As more physical retailers move toward a larger eCommerce presence, does that edge out the competition with Amazon? Some of the panelists thought so.

But not if omnichannel — or even some concept with a similar name — isn’t embraced.

Maybe the term omnichannel is wrong, one panelist said, suggesting that the term itself could be hindering progress. Another called the term “overplayed,” saying retailers talk more than they actually do when it comes to implementing a seamless approach to serving their customers.

Getting over the hump of relying on getting customers to shop in store and focus on just how to get customers to shop is a major hurdle in the U.S., the panelist suggested — who gave retailers a “C” grade on omnichannel. Retail should be seamless, but right now the experience is still focused on the retailer when it should be on the consumer, the group concluded. The consumer has the power, most of the panelists agreed, and once retailers realize this fact, they’ll be able to better define their channeled approach.

“Retailers should already be doing it,” one said, also confirming the concept doesn’t need to be defined as omnichannel. “It’s just part of the retail strategy.”

So which term will drop first — the omni or the channel? Lavelle seems to think the “channel” term will eventually be tossed aside as retailers focus on implementing strategies more than just talking about implementing them.

That’s perhaps the future of the omni-retailer.