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Common omni-channel failures and how to fix them in 2017

Tue, Feb 28, 2017



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Over the years we’ve talked a lot about what it takes to craft the ideal omni-channel experience, and the importance of going beyond the cursory approach of simply ticking the correct boxes of online, in-store and mobile commerce platforms. While it is vital to be able to sell to customers in all channels, it is not enough to simply be present. Omni-channel fashion is only good when it genuinely engages consumers in a meaningful way, as borne out most recently in a research published by L2.

In a study benchmarking a total of 97 retailers, L2 found that only 5 were able to implement a true omni-channel strategy by offering consumers a fully integrated, seamless shopping experience through a strong online shopping experience and an easy path from their website to their retail stores. And of that five, only one fashion retailer made the grade; indicating that the fashion industry as a whole still lags behind in omni-channel maturity.

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The journey for multi-channel fashion retailers seeking to capture and retain market share is expected be even more challenging in 2017. Increased channels means increased choice, leaving consumers with a veritable deluge of retail products, channels and payment options to pick from, based solely on their own convenience and individual preferences.

Leveraging this new ability to reach consumers at any time or place has unleashed exponential growth in sales volumes for digitally innovative omni-channel pioneers. However as L2’s latest findings have proven, many others still grapple with the constant challenge of maintaining competitiveness in this new omni-channel landscape.

Common Omni-Channel Pitfalls

There is a common thread in the challenges faced by brands attempting to build their omni-channel strategy and with good reason. Without the omni-channel basics in place, it is almost impossible to craft sophisticated, seamless consumer experiences and without such experiences, fashion retailers will always struggle to keep pace with the competition. 

Some of the most common failures in omni-channel strategy that we have seen include:   

01. Failure to integrate sales channels

Among the most common missteps for fashion retailers is a failure to integrate their sales channels into a single vertically integrated omni-channel platform; instead treating each channel as a separate silo. This in turn forces brands to manage three separate systems, each with their own supply chain and inventory allocation processes. Since each channel is designed in isolation from the requirements and processes of each other, they are unable to easily communicate with each other. Hence, brands are forced to develop specialized software to achieve even modest visibility and control over processes across channels.    

02. Failure to manage out-of-stocks and share inventory visibility

One of the most frustrating experiences for fashion consumer is when they are told that they can purchase a particular product in a given channel, only to later find all stocks of that item have been sold. For example, a customer checks a product online and visits the store to make the purchase only to find that online inventories are available but in-store stocks have been cleared or vice versa. Each such out-of-stock incident represents a lost opportunity for a fashion brands, not only in terms of lost revenue, but more importantly, it could also mean a loss of a customer, at a time where brand loyalty is a fashion retailer’s most valuable currency.

03. Failure to engage omni-channel customers

As mentioned at the outset and highlighted in L2’s Intelligence Report, brands that attempt to slap on an omni-channel label on to what is essentially a basic multi-channel strategy do not gain any significant competitive advantage. Omni-channel consumers need to be engaged by novel experiences and innovative uses of technology that create seamless experiences which are continuous and consistent across online, in-store, and mobile channels. In essence, omni-channel success belongs to those who are able, even at the most fundamental level, to treat all three sales channels as a complete whole.

Preparing for Growing Demands and Challenges

The increasing ubiquity of omni-channel strategies in fashion retail are forcing brands to adapt. However, as L2’s research indicates, the field is still largely populated by brands that only claim to offer a complete omni-channel strategy but largely fail to deliver. This represents a major opportunity for growth among brands that are willing to commit themselves to spearheading strategies focused on digital innovation.  

Brands must develop true omni-channel experiences. In order to succeed in implementation of such a strategy, fashion retailers must:

  • Completely integrate sales channels, and supply chains from end-to-end
  • Develop real-time visibility into inventory across the supply chain
  • Develop agility to respond to inventory out-of-stock by redirecting inventories to other channels
  • Provide consumers with real-time updates on availability of a given product
  • Engage and create a deeper understanding of individual consumer preferences
  • Provide store associates with the ability to reserve or hold merchandise at other store locations for in-store consumers
  • Enable consumers to buy and/or return products at any location, through any sales channel
While it is difficult to predict what 2017 holds for brands, a few things are clear. Technology driven innovation is quickly becoming the norm in fashion retail, and with good reason. Engaging omni-channnel strategies hold the potential to completely redefine the entire shopping experience and there are big opportunities open to who get the basics right.


To Find out how to get your omni-channel strategy right in 2017, download our Guide written in collaboration with SAP:

 SAP Fashion Management and Hybris