“Maybe it’s time to start thinking about omnichannel a little differently.”
That statement from MPD CEO Karen Webster comes from last week’s Omnichannel Tracker, which explores how the concept of omnichannel makes up just one part of retail’s future.
There are thousands of other concepts, of course, that will come along as retail continues to be disrupted — as brick-and-mortar retailers are pushed further into the digital test of time. Which retailers will come out on top? And which will find themselves struggling to keep up in a time when customers want products instantly and at their fingertips? Every retail executive understands the breadth of this challenge as they work to re-invent the retail wheel to drive more customers online as a way to keep them connected with their brand. And in turn, retailers are attempting to use those digital channels to encourage more customers to visit stores — even if it is just for a online order pickup.
Omnichannel is about providing the full customer experience, both online and in store, and retailers are beginning to realize if they haven’t implemented this strategy, then they’re already behind.
“It‘s no longer an option or a series of initiatives that can wait ‘until next year.’ And those elements that were considered a ‘nice to have’ a year or so ago are now table stakes and the foundation upon which the retail model of the future will rest and be innovated upon,” Webster wrote.
To help understand how the omnichannel experience has transformed retail, PYMNTS took a look into what CEOs/executives at top U.S. retailers have said about how they are bridging the gap between physical and online shopping experiences with their merged channel approaches.
Macy’s has focused on creating a shopping experience for customers who shop online, but pickup in store. Not only does this give the retailer a better chance to turn that digital shopper into a physical shopper, too, but it allows them to connect with a customer across multiple channels – and drive incremental sales as digital customers come rushing in to pick up their goodies, and walk by things that they just have to have, too. For Macy’s, the omnichannel focus is on its Buy-Online, Pick Up In Store initiative. It’s also looking to expand its same-day delivery testing to additional markets this year.
Here’s how Macy’s CEO Karen Hoguet believes the retailer could edge out competitors with its merged channel capabilities: “If you need something today and you are in a market that doesn’t have same-day delivery yet, the online pick-up in store helps with that or even next day. And by having inventory closer to the customer, that’s a huge competitive advantage for us in terms of satisfying what the customers are looking for.”
As for merging its digital and physical worlds, here’s what Hoguet said will help its vision of working across both channels: “We reorganized our merchant and marketing organizations to make them faster, more nimble and better connected between the stores and the digital world. While we now have Omni buyers and planners who span both channels, we also have digital merchants who are 100 percent dedicated to working with the Omni merchants to drive digital growth.”
For Gap Inc., its new digitally-focused CEO, Art Peck, has already made his digital footprint seen. Prior to joining the company, Peck spoke of the disruption that was needed in traditional retail and how he planned on bringing his new wave of thinking to Gap’s brand. For Peck, omnichannel is less about just implementing a digital strategy and more about creating a universal way to create the same experience for shoppers online as they could have in the store.
“On the experience it’s the omnichannel, the physical and the digital experience and how all of that comes together. So it’s really about, in my words, powering up our focus on those as much as anything rather than deviating from them. We are really learning a lot about kind of building a retailer from the digital world, if you will, into the physical world and how the two channels interact with each other.”
For Gap, there is no longer a digital side and a physical side. Peck wants there to be one side of Gap that represents both types of shoppers — both of which he believes will create the new type of shopper to target. This starts with digital, he said.
“Today, to me, it becomes a brand, which is those digital properties also have to carry the aspiration and the emotion of the brand as well as being very efficient channels,” Peck said. “And by bringing those two things together, we really now have leaders in an organization that’s going to be thinking digitally first in everything they do.”
Target’s commanding mobile share shows they’ve made a number of the right moves in support of their digital vision. Target indicated that they’ve seen a “high single digit increase,” in digital visits in the company’s fourth quarter, which was driven entirely by mobile. This drove orders up over 50 percent, leading to stronger conversion rates.
Target has attributed its omnichannel growth toward its ability to create a mobile experience, but with customers who are engaging at a physical store. CEO Brian Cornell made it clear during the company’s most recent earning report that Target plans to be the leading omnichannel retailer. And his team backed up that claim with stats to suggest Target is on the move in that direction.
“Mobile experience needs to make commerce as easy as possible,” said Jamil Ghani, Target’s VP of enterprise strategy — who noted that Target’s mobile-engaged customers make four times as many store visits per year. “We call it bricks-and-mobile, and we’re really excited to see how far we can take it.”
Walmart might be playing a bit of digital catch-up to its retail rival, Target. While Target has been boasting about its success on the digital front, Walmart has spoken more in terms of where its investments have started.
“We’ve been investing in expanding capabilities to allow customers to shop on their own terms and are moving sensibly towards this integration of digital and physical. This includes offering customers a variety of ways to interact with our brand, including picking up their walmart.com orders at their local store, providing reminders and refill capabilities through our pharmacy app, and our latest test concept, Walmart Grocery,” said Greg Foran, CEO of Walmart U.S.
While recognizing that its foot traffic is stores continues to drop, like most retailers are seeing, Walmart has also turned its attention toward creating a digital customer that is attracted to coming back to their stores.
“Digital access is important to our customers now more than ever. They expect a seamless interaction, whether it’s in the store or online. We see many opportunities at Walmart to evolve with the customer in their digital and physical experiences,” Foran said.
Whole Foods may be the one retailer where it’s less obvious how its digital strategy may play out. But Whole Foods has clearly jumped on the digital bandwagon.
Whole Foods recently launched its customer loyalty mobile app, they’ve teamed with Instacart to deliver groceries and they’ve began to expand their digital offerings to keep their loyal Whole Foods customers connected across multiple selling channels. For a grocer, digital can be more challenging simply because of the shelf life on some products, but Whole Foods has determined where it needs to fit in the digital retail mold.
“We recognize the changing technology and growing demand for customization that fundamentally altered retailing forever. Customers now expect to connect with the brand whenever, wherever and however they choose. And it’s part of our broader digital roadmap, we are rapidly building out an extended customer experience beyond the four walls of our stores,” said Co-CEO Walter Robb.
For years, Best Buy was able to bank on its bright blue and yellow storefronts as its retail sales base. But times have changed, and while people may seek help from the Geek Squad and the crew of Best Buy techies, customers tend to start their shopping experience for electronics online — with less and less of them being drawn into the stores.
Best Buy has attempted to push more of its resources online to follow the crowd. The Geek Squad has gone online, but they remain in-store to serve customers who still need physical help on their devices. While omnichannel has become somewhat of a buzzword where the meaning is lost to some, Best Buy is waging ahead to test the waters.
“The next initiative on our road map is online, our goal here is to serve our customers based on how where and when they want to be served and capture online shares,” CEO Hubert Joly said during the company’s fourth quarter earnings call. “In pursuit of that goal we will continue to develop true omnichannel experiences including: No. 1, improving the online visibility of returns open box inventory; No. 2, extending our installment bidding selling capability online; No. 3, enhancing the online experience for appliance purchases; No. 4, expanding capability for life events like the wedding registry and wish list.”