Eight ways that brick-and-mortar retailers are succeeding with omnichannel

Retailers operating ‘brick and mortar’ physical stores are facing unprecedented challenges in the digital age, and there is growing concern that many won’t survive.

In fact, last week alone witnessed 1,000 stores closing.

But while the retail environment is extremely competitive, some retailers are finding ways to make gains with an omnichannel strategy that links online with offline.

Here are eight different strategies that retail brands are using to do so.

In-store pickup and returns

While in-store pickups and returns are now incredibly common, for some retailers, in-store pickup and returns have proven to be an indispensable part of an omnichannel strategy. For convenience, many customers want the ability to purchase an item online and pick it up in-store, particularly for certain kinds of products.

In fact, in some markets, this behavior is fast becoming the norm. For example, Home Depot CEO Craig Menear recently revealed that upwards of 45% of the company’s online orders are now picked up in-store. The percentage is even higher for Home Depot competitor Lowe’s, which disclosed that close to a whopping 60% of its online orders are picked up in-store.

The benefits of in-store pickup and returns aren’t limited to customer convenience. According to Lowe’s, 40% of the customers who come to a store to pick up an online order also end up adding to their order once in-store.

A photograph showing the wall of a Selfridge's, painted yellow with a huge cursor-style hand pointing to the right. Large text reads, Click & Collect, next day delivery in store'.

Image by Elliott Brown, available via CC BY-SA 2.0

Pricing incentives

Pure-play online retailers have numerous advantages over omnichannel retailers that have to maintain physical stores. But omnichannel retailers are increasingly experimenting with ways to leverage their physical stores to generate more sales, even online. One of the most interesting tactics is pricing incentives.

Earlier this year, Wal-Mart announced a new program called Pickup Discount under which customers can receive discounted pricing on 10,000 products the retail giant offers online-only, if they are shipped to a local Wal-Mart location and picked up by the customer. This then works in conjunction with in-store pickup, giving consumers an additional reason to visit the store.

Real-time inventory/availability

Another common but important omnichannel tactic that pays dividends is real-time inventory and availability. In fact, it has arguably become a must-have offering and major retailers ranging from Best Buy to Home Depot have made it a part of their websites and mobile apps.

According to Stephanie Smith, VP of direct fulfillment and delivery for Home Depot:

“Access to store inventory repeatedly surfaces in customer feedback online but especially for mobile users. Customers want to know an accurate count of products in a store so their trip isn’t wasted.”

Innovative pick-up solutions

In an effort to better serve customers at their physical locations, omnichannel retailers are rethinking how they use their physical spaces.

Wal-Mart, for example, is testing self-serve automated kiosks that customers can use to pick up groceries they order online. Eventually, Wal-Mart says they could operate around the clock, a potentially significant development.

After all, if retailers can find ways to create additional value with their physical store locations 24 hours a day without much added labor cost, it could help improve the economics of their brick-and-mortar operations.

Innovative delivery solutions

While many consumers want to be able to make purchases online and pick them up in stores, omnichannel retailers are also finding ways to better serve customers who want products delivered to them.

Many of these take place behind the scenes. For example, some omnichannel retailers have updated their supply chains so that orders can be fulfilled with inventory from local stores when available to speed time-to-delivery and reduce costs.

But omnichannel retailers are also working on even bolder delivery innovations. Perhaps one of the most intriguing experiments in delivery was just announced by Wal-Mart, which has created an app that allows its employees to earn extra pay by delivering packages to customers on their way home from work.

Mapping and augmented reality apps

To help customers navigate in-store, some retailers have added mapping functionality to their apps. Last year, Target, for instance, added store maps to its Target Cartwheel coupon app to help customers locate products that had current deals in their local stores.

While there is a lot of hype around augmented reality (AR), there are even opportunities for retailers to put AR technology to practical use. For instance, to help customers finding products in-store – something that can be especially difficult in big stores – Lowe’s has built an AR app that helps direct customers to the products they’re looking for in-store.

Equipping employees with apps

Apps aren’t just for the customers. Lowe’s, for example, also gives its customer-facing employees six apps that are designed to assist them in better serving customers. These include a credit calculator and an app for helping employees determine dimensions for customer home improvement projects.

Knowing that customers are frequently using their mobile apps to shop, Home Depot makes sure its customer-facing employees have access to the same apps their customers do. The benefit of this: employees can see what customers see, helping them ensure a consistent customer experience and allowing them to quickly identify issues that need to be addressed quickly, such as inaccurate inventory information.

Using big data

Omnichannel retailers have the ability to marry data from different channels to improve customer experience in each.

There is virtually no part of an omnichannel retailer’s operations that can’t be aided by big data, but one of the most common applications of big data is inventory management.

For example, while Amazon is seen as an online retailer, it is now opening up physical bookstores around the U.S. Obviously, inventory in a physical store is limited, so Amazon is relying heavily on data from its site to determine what books it stocks.

The company says that “most” of the books in its stores “have been rated 4 stars or above” and the company has even created unique sectors for books, like “Books Kindle Readers Finish in 3 Days or Less.”

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