The United State of Omnichannel in America Today
Thursday, February 7, 2019

Categories: Market Research

The United State of Omnichannel in America Today

The OrderDynamics Omni-2000 research reviews 2,000+ global retailers looking for BOPIS attributes. BOPIS being Buy Online Pickup in-store. It discovers the shopper’s user experience with retail omnichannel. In the global report, results show an overall state of omnichannel retailing around the world. From that, a subset of 753 US retailers was broken out for a specific view of omnichannel in America.

Omni-2000 – The US Report

Surprising about the Omni-2000 United States analysis is the low adoption of omnichannel in America. From a total of 753 retailers reviewed, with over 30,120 US data points, we find that only 27.5% of US retailers offer the service. Basically, omnichannel in America is discussed more at the industry level than done at the brick and mortar level. This is a red flag for retail at a time that more and more consumers are learning and wanting this shopping experience.

Why is Sears an Accurate Example of the State of Omnichannel in America Today?

They could purchase anything from clothing to televisions to toys.In the 1960s, Sears was the world’s largest retailer. It had a burgeoning catalogue business. Some even call it the precursor to today’s Amazon. Consumers were able to shop the Sears catalogue from the comfort of their homes. To later have items delivered either directly to them or to a nearby pickup location. No need to go browse at the physical store. They could purchase anything from clothing to televisions to toys.

Unfortunately, Sears could not maintain its leadership position. Failing to take advantage of digital channels and technology, they strained the experience of their target customers. What was once the world’s leading retailer quickly became a relic of a different time and place. Late in 2018, Sears filed for bankruptcy. Industry experts called it a ‘turning point in US retail history’.

“Today is a day that will live in retail infamy. That a storied retailer, once at the pinnacle of the industry, should collapse in such a shabby state of disarray is both terrible and scandalous in equal measure. However, it is not surprising because this is a destination that Sears has been headed towards for many years, with virtually no serious attempt having ever been made to change the trajectory. In our view, there is a multitude of factors that have contributed to Sears’ demise, but foremost among them is management’s failure to understand retail and evolve Sears in a way that would have given the chain a fair chance of survival.”

Neil Saunders, Managing Director of GlobalData Retail, on Digimonica.

What Does This Mean for Retailers in America

According to the Omni-2000 report findings, the US retail industry is a ‘developing nation’ when it comes to omnichannel retailing. For those who view the US as a leader in many other areas, this news seems shocking. But, Sears may be a symbolic representation of omnichannel in America, today. There are some retailers which are very strong at BOPIS. Great examples of getting it right include Best Buy, Home Depot, Bed Bath and Beyond, Kohl’s, Target, Lowes, Nordstrom, Staples, Macy’s, Walmart and others. But, altogether – not enough retailers offering the new services.

Why is Nordstrom a Great Example of the Opportunity for Omnichannel in America Today?

Nordstrom is an example of a department store that is leading the way.There are retailers in the United States who are currently taking advantage of all the benefits available to them through digital technologies. These merchants represent the future of retail. They recognize the service gaps in the country as a whole. Nordstrom, for example, is among these leaders.

“We invested early in our omni-channel capabilities integrating our inventory across our stores and online over a decade ago. This has enabled us to serve customers in multiple ways. Today we have more than 60 combinations in which merchandise is ordered, fulfilled and delivered. Through these investments, we have strengthened our foundation to better serve customers and gain market share.

In our Nordstrom business, we have made meaningful progress in meeting customers’ expectations around speed, convenience and personalization. We offer a number of ways to serve them on their terms seamlessly across stores and online.”

Blake Nordstrom, the late co-president of Nordstrom’s, explained how and why the department store is succeeding today.

Nordstrom’s was able to identify early on that omnichannel was the strategy needed. While it takes many other retailers in the US longer to see the benefits, progress continues.

“When customers engage with us across stores and online, on average they spend 5x more and profitability per customer doubles,” said Co-President Blake Nordstrom, according to a transcript of the Q2 2018 Earnings Call found on Seeking Alpha. Online sales are rapidly growing in share of the company’s total sales, with 34% of net second-quarter sales taking place online, up from 29% in the same quarter last year.

What Does This Mean for Omnichannel in America

Sadly, the US currently stands as the market with the lowest level of omnichannel service offerings.  Only 27.5% of US retailers offer Click and Collect (BOPIS). Click and Collect (BOPIS) being the main sign of omnichannel capabilities. It offers online and offline channels for buying. As it stands, American retailers have a tremendous opportunity. They can make their businesses thrive with today’s digital commerce systems. For many retailers, it may be too late, already. But for others, the opportunity to capture share lies in the early market. At 27.5% omnichannel penetration, the early market is now.

Today, BOPIS stands as a differentiator. Most retailers currently offer a single channel or even multiple channels for buying. But, to win takes offering a seamless experience to shoppers. This means offering an omnichannel experience. It is a brand differentiator and an important one. At a time when consumers are increasingly taking on this new buying method, building loyalty happens now. Truly, the next few years will be an exciting time to watch as omnichannel matures in the US.

Download the full Omni-2000 US report here.

 

Author: 

Charles Dimov, VP of Marketing at OrderDynamics

Charles Dimov is VP of Marketing at OrderDynamics. Charles has 23 years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics.

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