This has been quite a year for omnicommerce and the merchant’s quest to deliver it. It’s a journey ripe with challenges. But as the PYMNTS OmniReadi IndexTM, powered by Vantiv, reflects, for those willing to meet the new demands and expectations of their omnishoppers, the gain will surely outweigh the pain to get there.
From services like buy online, pick up in-store, to simple things like buy online, return in-store, to mobile payments at the point of sale, omnichannel may not be the word that consumers use to describe how they shop, but it is surely how they do.
And merchants are manning their omnichannel battle stations to reap the benefits of the $1.8 trillion omnichannel market that awaits them.
That’s at least what the results of the quarterly data-driven analysis of the omnicommerce ecosystem, the PYMNTS.com OmniReadi IndexTM, powered by Vantiv, shows. In the October Index results, scores ranged from a (low) score of 28 to a (high) of 90. The average score across all merchant categories was 68, a four-point improvement over the quarter ending in July, reflecting the efforts made by top 10 merchants.
The slight increase of the average Index score shows an improvement in the omnichannel experience offered by those merchants considered to be the “best of the best,” which includes reducing friction, while improving consistency, essentially making the consumer’s life easier.
But merchants still have a long way to go to ensure they are providing the consistent shopping experience consumers have come to expect while shopping across multiple channels.
According to the Index results, retailers are still falling short in ensuring the same services offered through their digital channels are represented in the in-store shopping experience. Features such as product recommendations, the facilitation of social sharing, supplied order history and access to a wish list are all things that can help bridge the gap of online versus offline offerings.
To put a little more context around this, we gathered five of the top stories on PYMNTS.com in 2015 related to the omni movement, in no particular order, to showcase the impact the shift to omnichannel has had throughout the payments landscape and beyond.
When one of the world’s largest retailers joined forces with a digital commerce platform, people definitely took notice. In September, Macy’s and PayPal teamed up to promote a unified shopping and buying experience for the retailer’s customers across online, mobile and in-store. Through any of these channels, a Macy’s shopper can enable a transaction using PayPal as their payment method. As part of PayPal’s One Touch network, Macy’s has also made it possible for its shoppers to checkout online or via the mobile app and do so without typing in details and payments credentials, by authenticating themselves via their device once so that subsequent transactions are done via a single tap.
In an in-depth interview with MPD CEO Karen Webster prior to the official launch, PayPal Vice President of Large Enterprise Retail Sales and Partnerships Robert Clarkson said: “We are powering Macy’s app for online mobile transactions but also for an in-store experience, and we are also mirroring those functionalities on PayPal app.”
“There isn’t a lot of behind-the-scenes functionality that isn’t apparent to me as a consumer, and we think there is a lot of comfort in that,” Clarkson added. “Consumers don’t wonder if they paid twice or scanned things twice. There is a comfort factor there in just how easy and transparent the payments process is.”
With transparency comes trust. At least, that’s what the August Vantiv Omnicommerce Tracker research revealed. Consumers place a high value on the peace of mind that comes with receiving a consistent level of service that keeps them coming back for more. While consumers continue to move fluidly across shopping channels, they choose those destinations on the basis of whom they trust to deliver a good experience, whether that be merchants or marketplaces. Therefore, being on the “short list” of final destinations means delivering a consistent and seamless experience that builds trust and leverages the assets only omnichannel merchants can provide.
According to “The Retail CMO’s Guide to the Omnishopper,” a report released by MasterCard earlier this year, eight out of 10 global shoppers’ purchase decisions are informed by digital devices, the majority of which have turned the average consumer into a patient, skilled, value-seeking missile.
Not only has the digital revolution in retail given shoppers more convenience, it has also armed them with more intelligence and tech-savviness to change the ways in which they approach shopping, whether it be online, in-store or via mobile. The omnishopper is a consumer whose reach is not limited to any one channel; rather, their purchasing journey covers a wide swath of information and product sources — often simultaneously.
One of the more telling debunked myths found through the survey was that physical store locations are no longer important in the shopping experience. But the report found that brick-and-mortar retail locations, due to their inventory levels, as well as the social interaction and sheer entertainment value they provide, remain a vital part of the consumer experience for the omnishopper.
Data from the July 2015 PYMNTS OmniReadi IndexTM, powered by Vantiv, found that the highest ranking merchants, with an Index measurement up to 78, scored well because they have executed on multiple fronts. They are ensuring their online and in-store experiences with the brand are as consistent as possible. They have also made it a priority to increasingly address mobile-dependent consumers through mobile-optimized sites or through apps with functionality that improves the in-store shopping experience — or both.
Beauty retailer Sephora revamped its omnichannel and, in turn, created a way to stand out among other omnichannel merchants through its loyalty and rewards offerings. By using the cloud-based CashStar Commerce platform, Sephora began offering its customers personalized, mobile gift cards that seamlessly cross all retail channels. The omnichannel prepaid platform helped Sephora to reach a digital gift card revenue growth rate of eight times over the prior year, with a 71 percent boost in average in-store basket size over the initial digital gift card value, according to a CashStar case study released in March.
Sephora customers now have the ability to send digital gifts from any computer, tablet or smartphone — all while allowing Sephora to focus on its primary business objective, CashStar, which is driving revenue growth through innovative customer experiences. Not only has Sephora’s omnichannel strategy helped to deliver an enhanced shopping experience, it has also helped to fuel customer loyalty and engagement.
As consumers are presented with more omnichannel shopping opportunities, they have also developed the expectation of a “wow” factor when it comes to the loyalty rewards and benefits offered by retailers.
“Consumer expectations just continue to increase as we see different merchants come out with offers that are more and more attractive and experiences that are more and more personalized,” Stephanie Polen, VP of Client Portfolio Management at Vantiv, told MPD CEO Karen Webster during an interview about the motivations and methods merchants are taking on to build consumer allegiance.
“The ability for a merchant to actually execute on that effectively and to deliver a solid customer experience is largely tied to their ability to first understand the data about who their customer is,” Polen explained.
Research released by SAP hybris earlier this year showed not only are B2B buyers moving their activities online, they’re doing so across platforms. With an evolution of omnichannel procurement, suppliers are being challenged to handle data flowing in from multiple channels, global partners and shifts in the way payments are made.
Thack Brown, general manager and global head of line-of-business finance at SAP, explained to PYMNTS why solid payment strategies are more crucial than ever before for the buyer-supplier relationship due to the growth of omnichannel procurement behavior.
According to Brown, the B2B market today is a new era of commerce. “What we’re hearing all the time right now from customers is that this move to digital is accelerating business so much,” he said. “What we have to do is be able to keep up. It’s a completely new paradigm.”
He noted that the shift away from paper bills and purchase orders will be a challenge at first, but ultimately a major improvement for the buyer-supplier relationship. In today’s omnichannel world, where the procurement process gets digitized, payments aren’t just about keeping the supplier happy, they’re about proactively strengthening that collaboration, Brown explained.
Nordstrom has offered its customers the purchase online, pick up in-store option since 2008, and earlier this year, the retailer sweetened the deal by launching its new option for curbside pickup.
The service will enable a shopper to simple call or text ahead to a participating store to let them know when they would like to pick up a fulfilled order. Once they arrive, a store associate is scheduled to come outside and deliver the package directly to the consumer while they wait in a parking spot designated specifically for curbside pickup shoppers. Nordstrom spokesman Dan Evans explained that the curbside pickup option may eventually be integrated into the the retailer’s mobile app.
As the July Vantiv Omnicommerce Tracker revealed, research shows that 78 percent of consumers are interested in ordering online and picking up in-store, making it a solid option for merchants interested in boosting their omnichannel offerings.
Some of the key drivers that separated the highest scoring retailer from the lowest scoring in the PYMNTS.com OmniReadi IndexTM in July were cross-channel features that enhanced the consumer’s shopping experience, such as being able to view in-store inventory online or purchase items online with the option to return them in-store. Consumers expect these offerings, much like coming in-store to pick up their online purchase, to be clear and efficient.