Why "Omnichannel" Continues to Frustrate Retailers
Retailers dished on real-world omnichannel operations during a panel at Millennial 20/20.
Image source: Thinkstock
There can't be too many business professionals more tired of discussing the nebulous concept of omnichannel marketing than retailers, the very group omnichannel is supposed to benefit the most. At least, that was the spirit of a panel held during the Millennial 20/20 conference in New York last week.
The panel, titled The Science and Art of Modern Retail was moderated by “The Business of Fashion's” Lauren Sherman, and featured Jannie Baik, CEO and co-founder of Orchard Mile, Cheryl Kaplan, co-founder and president of M.Gemi, and Matt Scanlan, CEO and co-founder of Naadam.
The panel started with ancillary omnichannel topics like personalization and data.
“It's one thing to get the [quantitative] side, it's another thing to get the qualitative piece, which is ‘how did you come here in the first place?'” Scanlan said. “It's harder to streamline [the qualitative data] process, but I find those data points are the most compelling pieces for us.”
True, data on how customers perceive the brand and whatever brand experiences they're having is valuable indeed, but it's difficult to standardize the collection of such data, let alone using that insight to enhance the shopping experience. The prospect of such robust sentiment assessment tools must still be a ways out when so many retailers still struggle with marrying online with in-store.
When discussing the ongoing trend of retailers not adequately matching digital and physical inventory that the discussion shifted firmly to why omnichannel remains such a frustrating topic for retail brands.
“It's a bad word, but a good concept,” Sherman said.
“I'm sick to death of hearing [omnichannel], because everyone talks about it, but no one actually has a solution,” Baik said. “The reason your experience sucks is because number one: there's a distribution center.”
The issue with distribution centers, as Baik told it, isn't necessarily in some inherent failing of their function. The problems start when inventory is sourced both locally, and from the distribution center, and when one doesn't match the other. “The holy grail of this stuff is the single pool of inventory,” Baik said.
“At Orchard Mile, we think of all of our 120 brands… their physical footprint is actually distribution centers. We think of them as shipping facilities.” Baik said this set-up affords Orchard Mile the ability to eliminate discrepancies between online and in-store inventory.
Much of the rest of the panel circled this theme, how online and in-store can come together to offer the most rich experience possible.
M.Gemi's Kaplan explained her previously online-only company's road to a physical store in SoHo, and how important the tactical side of shopping really is. “It's become an experience. Women and men come in and spend time…. But what we found beyond the experience in store is how well they perform when they leave,” Kaplan said. “You may come into the store and try on four shoes, [but] buy one, and the other three will be in your cart when you leave.”
Scanlan revealed that Naadam is also embarking on establishing physical stores soon, but the brand has found success in wholesale in the meantime. “Wholesale is bad, but it's also pretty addicting. Relatively speaking, it's quick revenue, and you don't have to build the infrastructure on the marketing side to grow as fast,” Scanlan said. “In the areas where we're sold through our retail partnerships, keyword searches increase online for our product, which means the cost to acquire a customer in those areas decreases. So, we're using [wholesale] to drive profitability to our main source of revenue, which is online.”
Finally, the panel addressed one of the elephants in the room, in the way of the overall quality of retail customer experiences these days.
“The thing that is missing in a lot of retail today isn't even experiences, there's plenty of experiences. [It's that] a lot of it isn't very fun,” Sherman said.
The panel addressed this topic by dishing on how they each try to energize customer experiences for their respective brands, but the most salient quote came from Scanlan.
“Good product. Good product wins [for us] every time. The better the sweater I make, the more likely you are to come back and buy another one.”