Omnicommerce

Omnichannel: The Revenge Of Brick-And-Mortar

 Omnichannel’s reality has yet to catch up to its promise from years ago – to transform the way we shop, well, everywhere. NMI CEO Vijay Sondhi weighs in on the ways payments providers and merchants can transform commerce into a seamless experience, unified across all points of contact.  One prediction from the executive: Online channels will increasingly seek inroads into the brick and mortar realm.  

To lift a few lines from T.S. Eliot, “between the idea and the reality … life is very long.” That sentiment is a good place to start when thinking about commerce, specifically omnichannel — an idea that has come, and perhaps keeps coming, and where the reality has yet to catch up to that promise.

In an interview with PYMNTS, Vijay Sondhi, CEO of NMI, noted that the promise omnichannel had five or 10 years ago was vast, and held with it the idea that commerce, as an activity, would be seamless and broad in scope.

Sondhi said that, when looking at omnichannel in practice today, it consists of consumers researching an item online, then going into a store and talking to salespeople, or just using their smartphones in the store to research the item there. They check the prices of what they want (showrooming), then buy the item online because it’s cheaper there. Of course, there is also “reverse showrooming,” where a consumer views an item online, then buys it in-store, where the merchant matches the cheaper online price to cement the sale.

“The idea of omnichannel was to meet the consumer where they were at the right point in that journey, and it hasn’t all really played out that way. Omnichannel is still clunky,” Sondhi told PYMNTS.

Use Cases In Different Places

There are a few use cases that have gained traction, the most notable being the “classic” practice of buying online and picking up in-store — and the method of buying online and returning in-store. Merchants, he said, love the latter use case in omnichannel because it gives them the chance to sell other items that may be complementary once the customer is on the premises.

However, he added, “the amazing experience that a store would recognize me when I walk in, know that I’ve been browsing online” and tailor the whole experience to that one visit? Well, according to Sondhi, “we’re not quite there yet.”

A Breakthrough Moment

The chasm between that promise and what’s on offer can be traced back “primarily to technology,” he told PYMNTS. “It’s proven to be a lot harder to stitch together what people are doing online, and marrying that to their in-store experience, but I am optimistic that we have hit a breakthrough moment.”

As he explained, merchants attempt to steer customers to online and offline shopping, perhaps even leveraging both conduits in the same transaction. Retailers operate with a propensity model that seeks to predict customer behavior and move consumers toward making a purchase, then there is the loyalty loop that happens after the purchase.

It is the payments data that sits in the center of all this, he said, and it’s in this part of the equation where the real progress is made to bring those disparate buying activities together.

“There are now solutions that allow you to have a single repository for payment[s] data that can be used in an online and offline world,” he told PYMNTS. NMI’s platform is an example of this, he added. Payments data across any point of commerce — online, retail, mobile or unattended — all sits on one platform, giving the merchant a single view of the customer.

“Commerce needs to be unified across all points of engagement,” he said, noting that “the best payments experience is the one that feels like it never happened” because it is so integrated with the consumer’s interaction with a merchant.

The Revenge Of Brick-And-Mortar

Against this backdrop of unification, said Sondhi, we might just see what he termed as “the revenge of brick-and-mortar.” To be more specific, merchants with a successful online presence will, in increasing numbers, make sure they have a presence in the tangible world as well.

As he put it, “People want personal human interaction, and the opportunity to touch and feel a product [they are considering purchasing]. I think it’s ironic that Amazon bought Whole Foods, and has opened physical stores in Los Angeles, Seattle and New York. This is a trend we’re starting to see; it’s the revenge of the brick-and-mortar.”

With a nod toward NMI’s focus on small- to medium-sized businesses (SMBs), he said such firms typically don’t have the IT budgets to compete with large retailers, but they now want to sell offline, and it may be as simple as setting up a pop-up store. In crossing that Rubicon, he said these SMBs can order a mobile point-of-sale (POS) device online, get it delivered to them in a day or so, open up their iPhones and start accepting payments at that pop-up store.

He added that a combination of hardware enabling payments, and analytics working in tandem across a single system, means that consumers can actually be identified as the same ones who bought online using an encrypted credit card token, and merchants can then offer loyalty rewards and incentives that cross online channels. He said, too, that, for SMBs moving into omnichannel, it’s important that they make efforts to ensure that they’re not holding on to sensitive or card-related data, and that they have clearly defined opt-in programs.

“We’re starting to see an overload of eCommerce coming into the physical store,” he told PYMNTS, adding that “this shift will start to marry … going from that online into the offline, … and taking baby steps without investing huge amounts of money into technology. You can get up and running with a low-cost device and a phone. That has been a real game-changer for omnichannel.”

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

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