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Commentary: In the Face of Amazon, Omnichannel Retailers Can Prevail

BY Nick McLean

Nonstop innovations including expanded shipping capabilities, faster delivery times and cashierless stores make Amazon a force to be reckoned with. The e-commerce giant’s constant developments pose a threat to traditional brick-and-mortar retailers for obvious reasons. However, though they may not realize it, brick-and-mortar stores are in a position to compete with Amazon quite successfully.

Seldom do customers walk into a physical store and find it to be a ghost town. Despite rumors of a retail apocalypse, in-store shopping is still very much alive. According to IHL research, the top reasons shoppers choose brick-and-mortar stores over online options include the desire to purchase a product immediately and the sensory stimulation of touching, feeling and seeing an item before buying.

While it’s clear brick-and-mortar shopping is still something consumers value, out-of-stocks at physical stores can inadvertently push customers to Amazon instead. IHL research found that “24% of Amazon retail sales can be attributed to customers who first tried to shop in stores but found stores out-of-stock.” From a consumer’s point of view, out-of-stock can mean the size, color, model or version of a desired item was not available at the location they visited. Alternatively, it could mean store personnel could not find the item despite its designation as ‘in stock’ in the system. As a solution to the out-of-stock problem, the remedy retailers need can be found by making use of omnichannel solutions.

Provide increased options for a seamless shopping experience
For a retailer to boost in-store sales, they must develop online capabilities to complement their efforts. Whether online or in the store, customers increasingly expect a seamless experience, rich in convenience, to accommodate their needs. As the line between online and in-store blurs, retailers are finding ways to cater to the omnichannel shopper. From buying or reserving an item online prior to picking it up from the store, to shipping a product from the store to a customer’s home (or from one store to another), options such as these give retailers a competitive edge against Amazon.

With this omnichannel strategy, an out-of-stock item doesn’t necessarily mean the sale is lost to another retailer or to Amazon. Instead, various alternatives to get the exact product in a timely manner exist. For example, a customer looking for black boots in a size 7 may find them out-of-stock online. However, inventory visibility allows the customer to see this and points them to the closest store with in-stock availability.

Instead of abandoning the retailer altogether, the customer can reserve the boots online, try them on in-store and then make the final purchase. This example can also work in reverse. If the customer is already shopping in the store, they can try on the right-sized boots in a different color and have the black pair shipped from the closest location with available inventory – directly to their home, the store or another destination of their choice.

Create a collaborative effort between channels, suppliers and departments
Achieving omnichannel isn’t an independent effort. It requires channels, suppliers and internal departments to be completely in sync. Creating a connected store where digital and physical join forces depends on technology to orchestrate the processes that provide for omnichannel experiences, such as buy online pickup in-store. With these systems and processes in place, a retailer can fully support customers throughout their omnichannel journey, a factor that can make or break a sale.

Retailers endeavoring to pursue omnichannel without an aligned strategy to drive it will likely fail. In contrast, collaborative supply chains result in more efficient workflows and informed store associates who can better serve customers. With a synchronized system in place, customers will increasingly experience the care and support they need to make a purchase. Even one successful experience can be enough to earn the trust and loyalty of a consumer, steering them away from defaulting to another retailer or Amazon to purchase the same product.

Integrate visibility and speed to secure purchases
Capitalizing on omnichannel capabilities involves providing real-time inventory visibility to both employees and customers, coordinating retail fulfillment and notifying customers when an order is ready for pickup. For customers, receiving information in a timely manner can determine their ultimate decision to buy. Whereas passive inventory visibility indicates when a good is out of stock, active visibility provides the inventory position up-front. This creates a sense of urgency with the shopper if only a limited number of a specific product remains. Seamlessly fulfilling orders and sending readiness notifications within a few hours also captivates a customer’s attention and secures the sale.

Sending signals to customers that they should act quickly to place an order and delivering on their expectations when they do is the benchmark for retailers wanting to go toe-to-toe with Amazon. With omnichannel, customer frustration due to out-of-stock products can be put to rest. Retailers that offer a variety of physical and online fulfillment options have a leg up on retailers that don’t. As winning retailers satisfy these customer needs and gain loyalty, Amazon’s stronghold on the market becomes less of a threat.

Nick McLean is president of OrderDynamics.

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