The problem about talking about “what’s next” in payment and retail is the moment that “next” begins can be a little subjective. Omnichannel is a prime example of the problem—for years now it has been primed and promoted as the next big thing, the way to bridge online and real world commerce and the new frontier of personalizing the customer experience.
Statistically, the world is ready for it: 50 percent expect the ability to buy online and pick-up in store, around 80 percent use mobile in-store to buttress their shopping and nearly three-quarters note they are likely or very likely to use a local store if the retailer makes inventory information available online.
So the people are ready and merchants stand to gain, but the omnicommerce experience so far just isn’t delivering.
“The reigning buzzword champion – omnichannel – is dead. There, I said it. Someone had to,” MPD Managing Director John Caron wrote in a PYMNTS Commentary.
Caron went on to clarify that consumers doesn’t want omnichannel shopping –they just want to shop and for it to be easy. Treating omnichannel like something merchants “do” as opposed to something they develop is akin to “to trying to finish the roof at the same time you’re pouring the foundation of a home.”
Given Caron’s strongly stated headline, “Omnichannel is Dead,” it might come as some surprise how much he is in agreement wit Souheil Badran SVP and General Manager for Digital River World Payments and Forte CEO Jeff Thorness, who joined PYMNTS’ Doug Wilber for the second webinar in our Retail Reinvention Week Series on solving the Omnichannel puzzle.
Neither Badran or Thorness think Omnichannel is dead—as they both work daily with merchants with whom it is alive and well today - and both affirmed they think it is far more than a buzzword. That doesn’t mean, Badran noted, that it omnichannel is exactly what it’s been billed to be.
“It’s not the hockey stick that everyone anticipated, but it is surely taking hold in the United States and more so in Europe.”
Thorness concurred, noting that omnichannel is not a goal in and of itself, but is instead a tool in the box labeled “Customer Satisfaction.”
“Consumers are expecting that this technology exists and companies that are not embracing the Omnichannel experience are going to be offering a reduced customer experience.”
However, omnichannel is its nascent stages—which makes sense, said Badran, since it is part of the still emerging e-commerce/mobile commerce orbit.
“If you look at overall U.S. retail sales, in 2016, it’s forecast to be 3.8 trillion dollars. If you look at it from on ecommerce perspective—only about 10 percent is ecommerce, and if you take it to the m-commerce as a percentage, it’s only 27 billion.”
What the market retailers are pursuing is still a comparatively small fraction of the overall pie. Merchants perceive they have time to catch up and slowly move into omnichannel.
“Omnichannel retailing is easier said than done,” he noted.
Which, Thorness picked-up, is exactly why merchants must be properly configured to support it, which means a back-office organized so well it’s invisible.
“When I walk in to anyplace that is supporting omnichannel, I just want to pick up my product without having to worry what happens on the back end.”
Consumers also have to feel their data is safe, notes Badran, because ultimately “in any environment where you’re holding other people’s information, security is the air, it’s the key for us to survive in the business. Unfortunately 2014 is the year of the breach, but that should not slow you down, that should not slow innovation.”
In fact, Thorness noted, the security concern, which is paramount, can push innovation.
“Data and omnichannel go hand in hand, that is omnichannel, it’s data. So being able to make that data available to influence consumer behavior or support the interaction with the customer by having that data available is absolutely paramount. But additionally securing that data is also paramount.”
Tokens, notes Thorness makes that easier, as less data is up for grabs. Morover, Bardan noted—as HCE technologies and other mobile systems emerge—the data security element can be accounted for.
That is a particularly important consideration in the future of omniretail, considering the card present-card-not-present puzzle retailers can find themselves in. Consumers who pay online and pick-up in store are likely a CNP situation, which means higher fees for the retailer, which generally speaking merchants are not fone of.
“Merchants need the lines to disappear not blur," Bardan noted. “Merchants will adopt payments methods that don’t have that difference in them. They will encourage the solution that doesn’t cost them additional fees, and this is the shift to how merchants are going to drive the consumer behavior.”
Thorness noted that the issue has tended to slow down the development of omnicommerce.
“It is a challenge that there is a pretty significant gap between an in-person vs a card not present transaction. Merchants are not excited about trying to get that customer to swipe to pick up their product, because they want the customer to be happy. "
Because the happy customer is more likely to buy more, ultimately the goal for the retailers and the point of the omnichannel push. Some retailers are doing it well—the panel participants particularly called out Macy’s, Sephora and Delta as having a good read on what they can do to enhance the buying experience.
At the end of the day, customers don’t ask about the quality of their omnichannel experience, they evaluate their entire experience. Badran and Thorness think omnichannel is delivery it now, and will deliver more to consumer in the future. But it won’t be a “hockey stick” or in one fell swoop—instead it will be incremental and informed by what consumers actually want.