To put it in simple terms: omnichannel assumes that thanks to the combination of possibilities offered by a chain of traditional stores, an online store and its help desk software, the customer will buy from us more willingly and more often than from our competitors, which offer only one sales channel, or from which sales work independently and do not allow you to use them simultaneously.
If omnichannel is such a good solution, what then prevents it from becoming a common commercial idea? There are several reasons that inhibit the implementation of omnichannel in certain situations.
Lack of developed IT
The first of them is the lack of a developed IT infrastructure. To launch multi-channel sales, you need an integrated IT system that includes e-commerce, ERP and CRM software, sometimes also WMS. Due to the fact that the omnichannel idea is relatively new, and retail chains have a long history, often individual IT systems were implemented independently of each other and their cooperation was not planned. There was simply no such need. As a result, it happens that data in e-commerce systems and warehouse and accounting programs are not synchronized and the implementation of omnichannel would require “rewriting” many thousands of indexes to standardize them. In the case of a living system that must operate continuously to handle current sales, any changes are a very great effort and this causes postponement of the idea of using omnichannel in sales. You may want to work with a good software development company on this.
Small brick & mortar chain stores
Frequently cited obstacle in the implementation of multi-channel sales is the small brick & mortar chain of stores, which do not use the synergy potential of omnichannel. Sellers assume that since online sales is a global enterprise covering the whole country, in order to synchronize e-commerce with brick & mortar, we must have an equally global network of retail outlets. Nothing could be more wrong – in fact, even if we only have one physical store, it is enough to implement omnichannel – after all, for example, the possibility of personal collection can convince a customer who lives in our city to buy from us, and not in another online store, or also the possibility of submitting a complaint online will strengthen us on our local market, giving us an advantage over the competitor brick & mortar, which does not provide such an opportunity. All the advantages of multi-channel sales are in isolation from the size of the network – yes, a larger network has a greater ability to reach customers, but this is due to the size of the network itself.
Online and Offline Channel Conflict
The last obstacle in implementing omnichannel is the risk of customer conflict between online and offline channels. While it does not matter for the network which channel the customer makes purchases through, it may already be important for specific employees. Store managers treat online orders as reducing the turnover in the store under their care and transferring this turnover to the entity managed by the headquarters. The online department, on the other hand, may be unhappy with the fact that they have to handle traffic that takes them time and does not necessarily generate sales (for example, handling complaints). In such cases, it is important to remember that omnichannel is always good for the company as a whole, but it can be disadvantageous to some of its departments, which creates natural resistance. It is especially visible in soft franchise networks, where separate companies – franchisees – operate under one brand. For them, handling traffic from an online store is a pure cost, with no benefit in the form of sales, and a customer buying online, for example through social media posting, is a lost customer.
Is omnichannel only for large retail chains, then?
No, quite the contrary! Small entities can implement multi-channel sales more efficiently and faster, and the benefit in the form of increased turnover may be proportionally higher. Why? Firstly, IT systems are not as complex as in the case of large retail chains, so you can easily and quickly implement integrations that allow you to handle multiple sales channels in a synchronized manner. We simply have fewer programs to interface with each other to achieve the goal. Secondly, a small network of retail outlets is not an obstacle, and the launch of omnichannel can especially help brick & mortar achieve a local advantage, which proportionally gives a greater increase in turnover than in the case of a nationwide network that already has a global reach. Thirdly, small networks do not have large departments whose mutually exclusive interests cause tension in the implementation of omnichannel. In the case of smaller entities, the entire company is often supervised by the owner, for whom omnichannel is by no means an obstacle – his interests are identical to the interests of the company.