What are Omnichannel and Endless Aisle?
Maybe you’ve heard or read the words Omnichannel and Endless Aisle before, but you can’t really imagine what they mean at first. Let me shed some light on this.
Omnichannel means selling products and services on all available channels. Multichannel may be a more familiar word to some, but multi just means selling on many channels. Omnichannel focuses on the customer. Who needs when, what, where, and how can I deliver as a company? Omnichannel links all available channels for advertising and sales.
What value does it add to retail?
Now that we know what omnichannel and Endless Aisle are, we can look at the value they add. For that, I’ll show two positions: First the retailer’s and later the customer’s.
As a retailer, I can offer my complete assortment anywhere at any time through multiple operating channels. Without increased storage costs, because the products do not have to be in stock everywhere. After an online order and delivery to the store, I can bring my customers back to the store to show them how the item is assembled or used. This brings more customers into my store, which leads to an increase in sales. The customers see more things there, which they often take with them. The customers see more things there, which they frequently take with them.
So far, we have only talked about customers ordering items in presence in the store. But it’s also possible the other way around. In other words, customers can order my product online and then have it delivered to the store for collection. This gives us the same effect and increases sales by taking “grab goods” with us. A customer would probably not order a rattle for €5 on its own, but in the store it is quickly added to the basket. With manufacturing costs of 0.10ct, a high profit margin is achieved.
If the desired product is not available in the store and is specifically reordered after a consultation, selection orders can be minimized. Customers look at the product in the store, can compare them there, and then order specifically what they want. This reduces repackaging and return costs. Product information is displayed on all channels. As a result, customers know exactly what they are getting and are more inclined to buy.
Customers then register their product online, and the products sold can be assigned to the customers. This creates customer loyalty, and retaining customers is always easier and cheaper than acquiring new customers. Companies with an effective omnichannel strategy retain an average of 89% of their clientele, while the average customer retention rate without an omnichannel strategy is only 39%. A survey by Accenture also shows that 75% of B2B customers will make a follow-up purchase from the same company if they use a satisfactory omnichannel strategy.
Moreover, with customer consensus, the offline & online worlds can be combined. With an online purchase, you know who the customer is, but not with an offline purchase. However, if the customer pays by credit card and has given consent to collect customer data online, it is also possible to store data offline, e.g., identity by credit card, and thus create a complex customer profile.
This allows more data to be collected on customer behavior. For example, when buying a child seat, it is easy to determine how old the child is at the moment and when he or she will need a new, larger child seat. Then, after a few years, I can send my clientele targeted advertising for child seats in the size they require. I can also find out what colors and shapes my customer seems to like and suggest to him/her, for example, the latest blue deluxe model. In this way, the customer may already come to me with concrete ideas, because he/she knows that the desired product will be available from me.
Just-in-time deliveries also result in lower storage costs, less dead capital and no space that needs to be reserved. However, sometimes you may wish you had more of a particular product in stock when demand for some goods unexpectedly increases. However, by analyzing existing data and linking customers’ online and offline purchases, trends can be identified. This makes it possible to determine in advance where demand is likely to increase and to order there in advance to avoid falling behind on deliveries.
What is the added value for the customer?
After we have clarified the added value for retailers, we change our position and take a closer look at the added value for customers.
So what makes this concept so great for customers?
First, the haptic availability of the product and the face-to-face advice. Even in this age of online retailing, I personally still prefer to go to a retail store and look at and touch the product there. That’s something different from just seeing pictures online (although the online presentations of many products are now fantastic).
In the store, I can also better compare several products with each other and get advice on their differences and features. Endless Aisle gives me, as a customer, an overview of the entire product range and, thanks to omnichannel, all product information is displayed on all channels.
But if I like another product more, I can have it ordered immediately by an employee. Or order it by myself. Some retail stores offer their product range via tablets in the store. A true Endless Aisle. There, the customer can get a detailed overview and order directly. Either to the store or to their home, whichever they prefer.
If I decide to have the product delivered to the store, I can have it assembled there (depending on the product) and pick it up already assembled. This saves the deciphering of possibly quite cryptic assembly instructions 😉.
If I already have the product assembled in front of me, I have the opportunity to receive instruction from experienced employees on the functionalities and handling.
In addition, I have the option of complaining about the product at the store and returning it directly or getting a replacement there if something is not to my satisfaction. Because the complaints and chasing after some online-only providers can be annoying – that cannot be denied. With a contact person on site, this can be handled more comfortably.
After the purchase, I can register my product to me (e.g. via a QR code). This way, I benefit from discount offers. For example, if I buy a child seat for my 1-year-old child, I will certainly need a new, larger child seat in the foreseeable future. If I can get a discount on something I require anyway, why not? That’s what we call a win-win situation 😉.
ac & Omnichannel
To implement all the things described so far, you need many systems that are connected to each other. This is where ac can support. System integrations can be complex and require the necessary experience to be carried out quickly and cost-effectively.
So how does ac proceed when implementing omnichannel and endless aisle systems?
- First, the existing processes are identified. Which ones exist and which ones need to be supported? How are returns currently handled, and how should they be handled in the future? How are goods that have been purchased but are not yet in the warehouse accounted for? Which checkout system is in use? The connection is then designed on the basis of the identified processes.
- Which tax classes are the products subject to? What discounts are available? If sales are made across national borders, it must also be taken into account that the taxation of goods varies widely from one EU country to another. Although there is a minimum tax rate set by the EU, the rest is determined by each EU country itself. So how are goods taxed and to which countries are they delivered?
- Optimize ERP processes for omnichannel. How is currency conversion handled, how are exchange rate fluctuations dealt with? For example, if something is purchased in zloty and then needs to be converted to euro. What if the product is returned? How much zloty will be returned, what is exchange rate? Or is there a fixed price, and how do you deal with fluctuations?
- Do we have to consider bonus programs, customer cards? What is the procedure of product registration of a product purchased offline to a customer?
Ac is familiar with many interfaces (POS systems) and ERP systems. This is especially important for such an extensive topic. We are used to dealing with interfaces and logics of POS systems. So far, we have managed every integration of different systems and know which processes are required.
