making leaders successful every day...customer desires vs. retailer capabilities: minding the...

Making Leaders Successful Every Day

Customer Desires Vs. Retailer Capabilities: Minding The Omni-Channel Commerce Gap

Peter Sheldon, VP & Principal Analyst March 25, 2014

@peter_sheldon

© 2014 Forrester Research, Inc. Reproduction Prohibited

Agenda

›The omni-channel retail landscape in 2014

›Why omni-channel is now a customer imperative

›Mastering omni-channel, from organization to technology


This year 52% of all US retail sales will either be influenced by, or occur online


Online research is already ubiquitous across most merchandise categories


Base: 1,503 multi-channel shoppers that have made a purchase in store or online in the past three months Source: A commissioned study conducted by Forrester Consulting on behalf of Accenture and hybris software, November 2013

Consumers have high expectations when it comes to channel integration


The gap between consumers’ omni-channel desires and retailer

capabilities is widening


55% of retailers are following their competitors instead of innovating

Base: 256 US and European retail and manufacturing decision-makers involved in digital commerce initiatives Source: A commissioned study conducted by Forrester Consulting on behalf of Accenture and hybris software, November 2013


36% are investing in omni-channel to stay competitive with Amazon



The Amazon threat is very real


Shipping costs are the #1 reason online shoppers go elsewhere

When the same product is available from multiple retailers at the same

price, 75% of consumers would buy from the retailer that offers expedited

(2 to 3) day free shipping


Agenda





Omni-channel excellence, requires investment in multiple capabilities


#1: Store Pick-up


15

Future Shop & Best Buy Canada are redefining

the store pickup experience


However, inventory accuracy issues still plague most retailers

“What percent of buy online pick up in store orders cannot be fulfilled due to inaccurate store inventory?”

10%

28%

23%

28%

8%

2%

Don’t know

Less than 2%

Between 2% and 5%

Between 6% and 10%

Between 11% and 20%

Greater than 20%

Base: 107 US and European retail and manufacturing decision makers involved in digital commerce initiatives currently supporting Buy-online, Pick-up-in-store or Reserve-online, Pick-up and pay in-store Source: A commissioned study conducted by Forrester Consulting on behalf of hybris/Accenture

#2: Associate Enablement


Associates need to be able to sell beyond the aisle

Results: 10 items



When shopping in a store, consumers expect the associate to be online savvy

#3: Store Inventory Visibility


If you care about foot traffic, online store inventory info is an imperative



Toys-R’-Us provide a glimpse of what true inventory transparency should look like


#4: Ship From Store


Most retailers initially invest in ship-from-store to prevent lost online sales


There is often more to the business case than just saving online sales



“Enabling fulfillment from stores has been a huge advantage for our business. We were able to cut shipping costs by 18% while driving up revenue by 20%” Operations manager, books/media retailer

“Omni-channel fulfillment programs can give store based retailers an advantage over online pure plays, but as it stands today most retailers are not yet in a position to fully leverage their stores.” VP eCommerce, apparel retailer


When store fulfillment is enabled, 19% of online orders are shipped from stores

“What percentage of your online orders are currently (or do you expect) to be fulfilled by stores?”

2%

12%

11%

17%

18%

32%

5%

5%

Not sure / don’t know

Less than 5%

5% to 9%

10% to 14%

15% to 19%

20% to 34%

35% to 49%

50% or more

“Approximately, what percentage of your brick and mortar stores will participate in online order fulfillment?

3%

13%

11%

20%

36%

4%

14%

Not sure / don’t know

Less than 20%

20% - 39%

40% - 59%

60% - 79%

80% - 99%

100% (all of our stores)

“You mentioned that you already (or are planning to) support the fulfillment of online (web) orders from stores...”

Base: 200 US and European retail and manufacturing decision makers involved in digital commerce initiatives who support (or plan to support) the fulfillment of online orders from stores Source: A commissioned study conducted by Forrester Consulting on behalf of hybris/Accenture

#5: Ship-to-Store (and other convenient places)


Same-day shipping pilot programs are on the rise

Bass Pro Shops leverages their existing store logistics to lower the cost of online

shipping


Customers hate these


In Canada you can ship to a post office for no

additional cost


In the UK, online shoppers can collect from over 5,000

local convenience stores for only £4


Amazon now offers locker

pickup for free in many 7-11 and Staples

stores

Wal-Mart allow goods to be shipped to any FedEx office location


Agenda





1%

2%

7%

8%

13%

14%

14%

19%

21%

26%

27%

30%

Don't know

Other (please specify)

Head of digital

COO

CEO

Head of stores

Head of sales

Head of supply chain

CIO / IT

Head of Omni-channel

VP/SVP eCommerce

CMO

“Within your company, who is responsible for the strategy and execution of omni-channel order fulfillment?” (Select all that apply)


Mastering omni-channel requires cross-functional alignment and co-operation

Unfortunately, many retailers still fight over the customer


Organizational silos between the online and offline divisions drive

the wrong behaviors


In the age of channels, separate P&Ls worked Head of Stores SVP eCommerce VP Direct


But in the age of the customer, they don’t


Few retailers have a consistent strategy for revenue attribution across channels



Technology investments are key to tackling omni-channel tactics



Many hurdles exist – but the biggest is organizational change


49 Copyright © 2014 Forrester Research, Inc. All rights reserved.

› Accenture • accenture.com/omni-commerce

or accenture.com/seamless • @AccentureSocial or

@AccentureRetail

› hybris • hybris.com • @hybris_software

Contact the study sponsors to learn more

Questions?

Thank you Peter Sheldon [email protected] @peter_sheldon

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