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Three Ways Omnichannel Retailing is Failing the Customer

Updated: Oct 24, 2018

The promise of omnichannel retailing is to deliver the same shopping experience to customers regardless of channel.

The reality, however, is different — omnichannel retailing is failing the customer, particularly in three areas. Worse, many retailers are unaware of these issues, and most currently don’t have the means to calculate the resulting cost to their business, or the ROI of fixing the problems.

The price should be the price — except it isn’t

Customers expect items to be priced the same, whether in-store or online. Many retailers, though, offer specific online promotions and rebates to attract customers to their websites, and these promotions are not always mirrored in-store. There are even price inconsistencies between brick and mortar stores depending on whether they are franchise operations or company-owned.

WisePlum research, from a December 2017 study of 5,000 consumers in collaboration with the Retail Council of Canada and Microsoft, indicates that this is the number one problem for shoppers during pre-purchase activity, with up to one in four customers calling out that items were priced differently online versus in-store.

What do you mean, it’s not in stock?

Stock availability is another major source of frustration for customers — specifically when the product they want is not available online. In the same WisePlum research, department store shoppers indicated that this was one of their top five pre-purchase problems.

Imagine how this plays out as a customer. You go into a retail store and see several different versions of a product you like. Later, you decide to order it, only to discover that the version you want is not available online. But you had it in your hand in the store! This ‘customer friction’ certainly doesn’t help promote the retailer’s brand.

Return to sender — but how?

It’s not just the purchasing process that creates customer dissatisfaction. Returning items, particularly for online purchases can also be a minefield for customers. The WisePlum research found that it was the number one post-sale complaint of online customers.

Customers were unhappy with three aspects of the return process — return policies were confusing, shipping returns were inconvenient, and in some cases, you had to pay shipping charges to return your items.

In some ways, it’s surprising that this is still an issue for many retailers. After all, they can look to Amazon, who does a superb job of making the return process as seamless as possible. Or Wayfair, possibly the ‘gold standard’ for returns — you simply call them, then leave the item at your door or your front door. They’ll pick it up, with no fuss, and no forms to complete.

To fix, or not to fix

If pricing, stock availability, and returns are such prominent customer issues, why aren’t retailers taking steps to fix them?

There are two reasons. First, they may not be aware of these issues — many don’t have a complete 360-degree view of the customer experience. An omnichannel retailer may be collecting customer data in-store, at point of sale, and online through surveys, yet they may not have a process in place to consolidate the data, step back, and view the entire, holistic customer experience.

The second reason involves calculating the retailer’s return on investment. Suppose the retailer does identify that inconsistent pricing, for example, is an issue. They may weigh that issue against the increased website traffic that the online promotions generate (and the associated increase in sales) and determine it’s not cost-effective to fix the pricing discrepancy.

The same holds true for stock availability. It might be too expensive to maintain online inventory levels that are consistent with those in the physical store, particularly when consumers have access to multiple stores, depending on city and location.

Conducting 360 research- the entire customer experience across all channels

The need to understand both impact and ROI is why research is so critical for retailers. It helps identify negative customer experiences that they may not have known they had. More important, it helps quantify those issues. How many customers are they losing as a result of these problems? What is the value of those customers? Are they retaining other shoppers, but losing wallet share — and, if so, what is that costing them?

Only by conducting specialized research can retailers answer these questions, and, of course, the one final question they need to consider. Is the cost of the negative customer experience higher than the cost of fixing the issue?

In other words, is the juice worth the squeeze?

Michael Tropp is a WisePlum contributor.



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