20 Mar The Current State of Omni Channel
Omni channel, multi-channel, webrooming, showrooming…the abundance of buzzwords that are used to describe the changing state of retail (and that spellcheck can’t even recognize) indicate that we are in a period of transition and innovation. There is no doubt that the omni channel marketplace would not exist today if it weren’t for the evolution of technology, but it is undeniable that human behavior and psychology have played a role in the evolution of omni channel as well. The current challenge for retailers is in delivering a seamless customer experience across all channels, including online, in-store, and via mobile, so that they can meet customers’ high expectations as well as optimize sales and revenue. Whether they choose to turn to third-party service providers to deliver the necessary tools, or opt to build out the tech and marketing in house, businesses who once specialized in brick-and-mortar or e-commerce are now struggling to redefine themselves as players in the omni channel marketplace. The ones to watch are the early adopters and industry leaders lighting the way with their creative, ground-breaking tactics and tools.
What is Omni Channel and Why Does It Matter?
An omni channel retail experience offers a customer the option of using any sales channel for any given transaction. While more retailers are moving toward a multi-channel model by allowing customers to make purchases online, in-store, from a catalog, or using a smartphone, many of those channels still operate independently. For example, if a consumer purchases a product in-store, they need to drive back to the store to return it, they can’t return it online. In an omni channel retail environment, customers can initiate any kind of transaction at any channel. Omni channel is focused on seeing and interacting with the customer as an individual, across multiple channels or touch points. Studies by McKinsey and Company have shown that consumers who shop across multiple channels spend approximately four times more than customers who only shop in one channel. As technology has developed and Americans are adopting technologies at a faster rate, retailers are finding it’s imperative to embrace an omni channel approach to keep up with their competition and stay relevant to consumers in today’s marketplace.
The Impact of Tablets and Technology
Remember the good old days before 2007, when all phones had buttons instead of touch screens (unless you had a rotary phone), 1-in-3 of your friends probably didn’t have Internet at their house, you had to watch TV on a television, and check your email on a computer? That was before the introduction of the smartphone and the tablet. Although there had been other smartphones on the market, the Apple iPhone hit the market in 2007 as the first smart phone with a touch screen, becoming the forefather of the modern smartphone. The iPad followed three years later, in 2010. In Pew Research Center’s Internet & American Life Project, researchers took a look at tablet ownership and access to broadband internet over time. They found that by November of that 2010, 5% of all adult Americans owned a tablet. Fast forward to November of 2013, and 34% of adults in the U.S. own a tablet. 61% own a smartphone. And a whopping 70% of American homes have a high-speed broadband connection.
By the end of 2013, analysts from Forrester Research Inc. predict that 47% of the U.S. population will have regular access to mobile Internet. According to a Forrester Research Inc. report entitled “U.S. Cross-Channel Retail Forecast, 2012 To 2017”, 150 million people will be connected to the Internet via Wi-Fi, hot spots, and broadband nearly every moment of their waking lives. This non-stop access to e-mail, texts, social media, online reviews, and of course, e-commerce sites, has transformed the way people behave and interact with each other and with retailers. EMarketer recently reported that the average American adult spends five hours a day online, more time than they spend watching television. A little less than half of the time spent online (2.21 hours), is spent on smartphones, tablets, and other mobile devices, nearly an hour more than they spent on mobile Internet devices last year.
To read about three companies who are getting it right as Omni Channel leaders, download a free copy of our white paper, The State of Omni-Channel.