Why omni-channel retail is crucial for fashion indies

How times change. Ten years ago we were in the thick of a global economic downturn and while other companies were collapsing, Apple enjoyed forecast-busting sales for its iPhone. The advent of the smart phone, miniature computers we could carry around in our handbags, was enough to fan the flames of online shopping – the retail phenomenon of our times.

Although there’s no question that e-commerce has rocketed, consumers are still buying the majority of their goods in physical stores. According to the latest figures, online commands just 20 per cent of overall UK retail sales. But the way we are making purchases has irrevocably changed. Today shoppers think nothing of spotting a product or trend on Instagram, searching for it on Google Shopping and then travelling to a physical store to make a purchase. Many will even whip out their smart phones while standing on a retailer’s shop floor to hunt out the right size or find the better deal.

Unfortunately, many brands and retailers are struggling to keep up with this rapidly changing retail landscape – and they are losing money as a result.

We’ve all heard about the perils of ‘showrooming’ and ‘webrooming’ – but they pose a real threat to your business if you aren’t offering an omni-channel experience. The first refers to customers who visit a bricks-and-mortar store, try a product on in their changing room and decide they want it but then buy it elsewhere online. The second refers to those customers who find a product they want to buy online and then head to their nearest physical stockist. As an online retailer, this can mean a loss of revenue from advertising as well as a lost sale.

So, what can be done to try to prevent these practices? According to experts, retailers should be treating their online and offline channels as a single funnel rather than accepting they will just pick up the odd webroomer or showroomer. “You need to be able to convince those researching customers who are visiting your space that sticking with you for the entire transaction is the smart thing to do,” says Sam Rutley from leading full-service e-commerce agency PushOn. “Intelligent pricing, complementary deals, after-sales service, reputation and reviews can all be worked on to make the case that you’re the one.”

What is omni-channel retail?

In a study conducted last year by PushOn, over 52 per cent of UK shoppers said retailers needed to offer a “more seamless experience on and offline” to retain their custom. There’s a lot of talk about omni-channel retail. But if you aren’t 100 per cent sure what it is, you certainly aren’t alone. “It’s about taking a multi-channel approach to marketing, selling and serving customers in a cohesive way, whether they are online or offline,” explains Rutley. “Omni-channel retailing is a fully-integrated approach to commerce that provides shoppers with a unified experience across online and offline channels. This includes brick-and-mortar locations, mobile-browsing, e-commerce sites, onsite storefronts, social media, and everything in between.”

It’s worth noting that multi-channel differs omni-channel in the sense that each channel doesn’t work together effectively. Instead, each works as a separate purchase opportunity. “Omni-channel is often confused with multi-channel when it comes to retail,” Rutley continues. “Both multi and omni-channel do involve selling across various different physical and digital channels. However, the key difference is the depth of integration between these channels.

“Critically, omni-channel joins up the offline and online experience throughout the customer journey, creating a consistent (and often personalised) experience wherever and however they interact with a brand. Removing the traditional boundaries between different sales and marketing channels requires an integrated infrastructure behind the scenes.”

So to stop consumers ‘showrooming’ and ‘webrooming,’ it’s crucial that retailers provide a seamless experience across all channels: “Consumers no longer see a distinction between shopping in-store and online,” adds Anita Liu Harvey, director of strategy at Barclaycard. “Retailers must allow customers to move between their offline and digital channels without interruption. Using technology that enables retailers to remember customers’ preferences across different channels will ultimately provide a better, frictionless experience for the consumer.”

Omni-channel on the high street

An example of a UK retailer taking an omni-channel approach is womenswear multiple Oasis. Its service fuses e-commerce, mobile app and bricks-and-mortar into one simplified shopper experience. “Oasis has been working hard to provide its customers with a strong omni-channel experience,” says Rutley. “In recent years it has has joined all the different elements of its customer-facing business into a simple shopping experience.

“Online, it has simply displayed images across its site and social channels, and easy integration between social and its ecommerce site for purchases. It offers a range of home delivery options, included unlimited delivery for a year for under £10, with everything clearly explained within one page of its site. Importantly, it also offers a same day click-and-collect service as well as a ‘find in store’ feature that lets customers find their nearest store with a particular product in stock.

“Meanwhile, Oasis shop floor assistants are equipped with tablets, meaning they are able to give customers on-the-spot, accurate, and up-to-date product information. This includes being able to check stock levels on all products for customers. If they don’t have an item in stock, instead of leaving the customer unsatisfied, they can offer to order it direct to the customer’s house instead. All of these elements work together to unify and integrate the online and offline fulfilment experience.”

Spanish chain Zara is also driving sales with an omni-channel approach. In January this year is opened its first click-and-collect concept store at Westfield Stratford, offering shoppers a dedicated space to collect online purchases. The trial store was open for five months and combined a selection of key pieces to shop alongside sales assistants with mobile devices to help customers with sizes, stock and collections. Inside the changing rooms, customers could use high-tech mirrors embedded with product recommendation screens where they could scan clothing and see an image of a model wearing coordinating items.

In May the retailer opened the doors to its refurbished 4,500 sq ft flagship, also inside Westfield Stratford. The new store features an automated online order collection point serviced by two small warehouses that enables shoppers to pick up purchases made on its e-commerce site whenever it’s convenient for them. The system is designed around an optical barcode reader that scans the QR code or accepts pin codes received by customers when they order online. In just a few seconds, it delivers the order to a mailbox ready for collection by the customer. Behind the scenes, a dynamic robot moves through a small warehouse with the capacity to handle 2,4000 packages simultaneously.

The opening marks “another milestone in our strategy of integrating our stores with the online world, which defines our identity as a business,” says Pablo Isla, chairman and chief executive of Zara owner Inditex.

How indies can compete

So how can indies compete with retail giants by offering an omni-channel experience? “Omni may mean all, but omni-channel is not necessarily about ubiquity,” says Rutley. “Instead, it is about creating consistently excellent, conjoined experiences for your customers in whatever channels you do serve them.

“Implementing sophisticated new technologies can be a challenge for small retailers whose budgets are limited, but all retailers need to invest in digitalisation and respond to today’s consumers’ needs or else they’ll almost inevitably be left behind.

“For smaller businesses, an omni-channel approach might mean beginning to use browsing data collected from shopping behaviour online to more intuitively select and organise merchandise in-store. Upgrading point-of-sale infrastructure is a great way to provide customers with consistently excellent checkout experiences.”

Higor Torchia, managing director for Vend EMEA, also maintains that small retailers are “perfectly capable of offering an omni-channel experience. He says: “Inventory control, channel management, and returns must be linked seamlessly across all channels. One of the best ways to do this is to use a centralised retail management system.”

Such systems can handle complex behind-the-scenes necessities, such as aggregating inventory in your store or across multiple stores to make sure stock is always accurately listed on all channels. “Failure to display the correct level of stock can lead to disappointed and frustrated customers, which is never good for business,” adds Torchia. “Once you’ve got all the systems in place, you need to establish business processes to support your omnichannel efforts, then train your staff to carry out your initiatives correctly. This includes recording inventory levels accurately and making sure there is an efficient method for processing orders.”

If you’re still in two minds about how relevant omni-channel is to your business, Torchia is clear: “Today’s shoppers don’t differentiate between channels – they switch fluidly from one to the other as if they’re one and the same, and they fully expect each retailer they support to successfully accommodate that practice,” he says. “So if a particular retailer doesn’t have an effective omni-channel strategy in place — or if it is insufficient and disrupts the purchasing process in any way — customers are likely to avoid their services altogether.”