The retail industry has undergone significant transformation in recent years with the advent of digital technology. Traditional brick-and-mortar stores are no longer the only place where consumers can shop, and retailers have to keep pace with the changing landscape to offer an omnichannel experience.
However, a recent report suggests that retailers are struggling to ensure a consistent experience across all channels. This article will discuss the challenges retailers face in delivering an effective omnichannel experience and their intention to focus more on digital channels in the future.
Too Many Channels Hampering Sales Experience
According to the report, 47% of retailers believe that there are simply too many channels for them to effectively deliver the best sales experience. This startling finding indicates the level of complexity that retailers face when it comes to managing multiple channels.
With online marketplaces, social media, email marketing, and mobile applications, the number of channels has exploded, making it challenging for businesses to create a seamless customer journey. Retailers must innovate and come up with new ways to engage customers across multiple touchpoints.
Changes in Budget Allocation for Retail Businesses
The report also states that only 11% of retail businesses’ total marketing budget is expected to be spent on brick-and-mortar stores. This finding underlines how rapidly physical stores are falling off business leaders’ priority lists. Businesses are emphasizing the importance of online marketplaces and digital channels, when it comes to marketing spend.
Inefficient use of digital channels
Digital channels are becoming increasingly important to retailers, and it is imperative to conduct efficient campaigns that deliver maximum returns. The report states that two-thirds (66%) of businesses admit to not using digital channels efficiently. This data reflects the need to enhance digital capabilities, and businesses should seek to streamline their digital channels and improve performance.
Struggling to maintain brand consistency across channels
Creating consistent experiences across multiple channels has become increasingly critical for companies. Surprisingly, a notable 44% of respondents highlighted the struggle to deliver a consistent brand experience. Brand consistency is the cornerstone of creating a positive customer experience and building brand loyalty. Therefore, businesses must allocate resources to ensure control over brand consistency across channels.
Marketplaces are seen as the easiest channel for sales
Marketplaces have become increasingly popular among retailers, with 35% of business leaders identifying them as the easiest channel to sell in. Online marketplaces, such as Amazon, have grown in popularity due to the ease of selling, access to a large customer base, and absence of upfront cost. Additionally, marketplaces provide a convenient experience for customers, which contributes to their growth.
Growth Seen as a Threat
Businesses are becoming increasingly aware of the numerous challenges that growth can bring. According to the report, 42% of respondents saw their growth as a threat. Scaling up a business, especially one operating across multiple channels, can result in issues with logistics, quality control, and negative customer experiences. Retailers need to develop an agile culture that allows them to cope with growth by creating scalable systems and identifying weak points.
Deprioritizing physical stores
The report indicates that businesses are deprioritizing physical stores. With the growing need for a digital-first approach, physical stores will move lower on businesses’ list of priorities. By continuously innovating digital channels and working with marketplaces, businesses can enhance the omnichannel experience and benefit from the new reality facing physical stores.
The Emergence of Retail Media
Retail media is emerging as a potential new channel for retailers. Retail media is the practice of retailers selling ad placements within their digital channels to brands. With several marketplaces now offering retail media solutions, they allow brands to engage with customers directly, and retailers can monetize their digital ecosystems.
Directly Reaching Shoppers at the Digital Point of Purchase
Retailers must leverage their digital channels to reach customers more directly at the point of purchase. With omnichannel solutions that personalize content for each customer, retailers can offer personalized incentives, such as discounts or free shipping, to customers at the digital point of purchase.
The retail industry is evolving with the rise of digital technology, and businesses must operate effectively through multiple channels to create a seamless omnichannel experience. While businesses face challenges in ensuring consistent experiences across channels, they can enhance the omnichannel experience by using marketplaces and focusing on digital channels. Additionally, focusing on retail media and aiming to engage directly with customers can help drive sales and deliver growth.
