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Although well-known ever since becoming a buzzword of the business world, omnichannel retailing has never lost its popularity as one of the most effective business models. 

As technology grows with more advanced support to omnichannel retailing touchpoints such as websites and social media, the competition among retailers are getting fiercer than ever. Because the more convenient it becomes to facilitate customers, the harder it gets for each retailer to show its superiority over other competitors. 

In this article, we will present to you as clearly as possible about all challenges to omnichannel retailing that we have dedicatedly collected. At the same time, recommended solutions or tips may be shown as well as a reference for our retailers. Which of the following is not a challenge of omnichannel retailing?

Omnichannel retailing – Buzzword you had better understand well

omnichannel retailing definition

There exists a no-less-popular phrase than omnichannel retailing and these two are surprisingly often misunderstood – multichannel. 

Both of these business models require retailers to create a network of touchpoints, thanks to which they are able to expand their connection with customers. Multi-channel appeared long ago as an upgrade on single-channel strategy and it used to dominate the retail industry. 

And even more than that, omnichannel retailing is an extension of multichannel retailing. Not only does it help the shopping process more conveniently with integration of channels, omnichannel retailing specicialises on seamless omnichannel experience. This aspect makes it easier to purchase products, boost sales and help build loyalty as well.
However, being seamless is not easy to achieve. Even many retailers these days, who can tell these two approaches apart have not applied true omnichannel retailing. It even leads a negative result. A research from Globenewswire has shown that failures in omnichannel retailing made 45% of merchants and suppliers suffer more than $1 million of loss in profit. Ununified channels can easily bring frustration to customers and in the context of today’s fierce business competition, if you lose the chance, you hardly can stand a chance to persuade them again.

Taking all these risks and opportunities, the question that may arise is that: “Is is worth to make a move?”. If we are the ones to answer, it would be a big yes. Because omnichannel strategies bring to businesses amazed 91% greater year-over-year customer retention than those only applying single-channel strategy. 

Let’s look into difficulties when applying omnichannel retailing approach and see if some of the tips added together with those can help you.

Omnichannel retailing challenges

Marketing

1. Integrating omnichannel communications into infrastructure

 channel integrating

As aforementioned, the quality of omnichannel lies in its seamless experience that can be brought to customers. But there is a wide range of touchpoints that need integrating and consolidating. This is one of the biggest challenges in omnichannel customer experience.

So, with the existing system, what should retailers do to implement and integrate their omnichannel messaging solutions? There are many ways, however our recommendation is to implement these: 

  • Self-service
  • API
  • Hybrid hardware-cloud solutions

Of course, all these solutions have pros and cons, therefore we think the best way to do is to combine all options. 

2. Inauthentic user data

user data

In a study, 45% of survey participants claim that they think failure to identify customers is the main hurdle to their omnichannel success. 

While collecting data, you must have encountered difficulty in distinguishing fake data. Finding a solution to exclude it from your analytics is still being worked on by many information technology specialists. However, having detected the problem, you may expect a relief practice to alleviate negative effects. Because customers these days are equipped with such convenient support to fastly move between channels and change the data. 

The recommended tip we find out relates to facilitating information integration and orchestration. Cross-channel IDs can be better managed when your data sources integrate with different data types referring to a customer. How? You’d need support from cloud-based micro service architecture and orchestration layers. Employ those to keep the best-quality user identification data in hand. 

3. Huge volume of data

data management

As single-channel retailing, you already have to deal with a big amount of data from inventory turnover to investments in marketing, infrastructure and so on. 

Therefore, when it comes to omnichannel retailing, many retailers find the huge volume of data streaming from several sources out of their control. The data sources could be from supply chain, the inventory, customer feedbacks, security data, buyer information… and these are multiplied as the number of omnichannel touchpoints. 

Moreover, the number keeps growing everyday, especially if you’re running your business smoothly with more prosperous profit. The valuable, important chunks of information will become useless, even destructive unless being collected, integrated, organised properly. 

Here we would like to suggest cloud-based management system as above. Take the migration into consideration, those product information to cloud storage and witness your online sales process as well as supply chain and individual customer data being simplified. 

Financially speaking, cloud streamlines saves up maintenance costs and have-to-pay fees when system failure appears. Cloud system provides automatic backup and recording key metrics in case of that. You would also be able to use different types of databases and optimise resource usage to scale during peak seasons and prime times.

4. Personalised experience

customer personalised experience

In a case study from Office Depot, they have increased their revenue by $6.9 million in only four months thanks to  personalizing the content on its product detail pages. 

This clearly shows that customers nowadays always look for personalised experience. This not only apply to online shopping but shopping in-store as well. The specific approach of customized service makes customers feel like the retailer is fulfilling their needs and conversion rate is increased. 

Successful omnichannel retailing needs real-time data which provides insight into what your customers look for. The target market can only be determined when you are able to capture data across all devices and channels. From that, a more detailed anticipation of your customer’s need to make more profit can be implemented with incorporate AI and Data Science, as well as an effective Analytics engine. 

5. Inappropriate legacy systems

legacy system

Legacy systems are outdated computer systems, programming languages or application software that have gone outdated from the latest upgraded versions. This is undoubtedly problematic in many cases because nowadays businesses running omnichannel retailing strategy needs to embrace digital transformation. But old legacy systems for long terms policies create a hindrance to adjust an omnichannel marketing strategy, as well as accumulating customer data across all channels. 

Omnichannel retailing marketing plans can be implemented with less difficulty if your business employ new innovative and up-to-date systems, which use cloud services instead of inappropriate legacy environments. It is also very important to remember that once you’ve decided to rebuild, make sure that the operation is nonstop and user experience should be seamless. There would be recommended changes but stick to your first plan. What makes more successful omnichannel retailing marketing management is effective deployment and automation testing. 

Supply chain and logistics

6. Inventory management

inventory management

Problems often appear to retailers when they have more than a warehouse and supply chain processes do not have synchronisation, which leads to mistakes when catering to clientele. 

To be specific, retailers may have little to no cross-channel inventory visibility, and then at times products are placed in bulk at one place but already get informed as “SOLD OUT” on other touchpoints. Needless to say, this situation not only hurts sales, but also decrease your brand’s loyalty.

The solution is if you are still using traditional, “raw” ways to manage inventory visibility, firstly, you can consider narrowing down the processes and unify all warehouses into one single unit to ensure no interrupted supply of goods and services. Next, you may need to develop an efficient order fulfillment progress that is controlled under an optimized warehouse management system. One more advantage of inventory visibility is that you can make predictions on supply chain activities accordingly, which is also beneficial to creating proper marketing strategies.

7. Long Cycle Time

cycle time

Customers demand nowadays is to offer shipping to customers as fast as possible. They expect to receive the products within a day or two days, if not in the same day. Cycle time is the amount of time needed to produce a product or service. Omnichannel retailing needs to cut down this cycle time to create convenience to customers ordering on all touchpoints. 

We suggest that you focus on creating standard automation processes to boost production, order processing and packaging efficiency. 

8. Returns of orders

Your omnichannel logistics system should not be set up without return of orders. Together with integrated platforms must be returns enability from these touchpoints as well. 

It is also an important part in omnichannel customer service. Customers also take notice of whether they can return a product after purchasing to a retail location or if they would return at ease.

The suggestion would be implementing on-demand label printing for customers or provide a return label in the original packaging. There are multiple ways, but remember to make returns management chain seamless in your system. 

Conclusion

To sum up, we hope the above information about omnichannel retailing challenges and recommended solutions would be helpful to you. Omnichannel is a a complex challenge which requires comprehensive solution but with proper effort, we believe that any retailers can take this advantage. 

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