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Omnichannel cases

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Omnichannel cases

  1. 1. Omnichannel Retailing 1 Omnichannel Retailing: A New Trend in Retail Todd Kropilak Thomas Edison State College
  2. 2. Omnichannel Retailing 2 Omnichannel Retailing Selling to consumers has evolved from door-to-door, to catalog, to retail sales. Recently, e-commerce has been added for the purpose of reaching the consumer through a new venue. Omnichannel retailing is the next big trend in the industry. By employing omnichannel retailing, a business can merge physical stores, online content and mobile devices into one experience (Palmer, 2014). It will be a game changer for the industry and essentially brings together: physical stores, web sites, computers, social media, online catalogs, gaming consoles, kiosks and mobile technology under one umbrella and redefines both how a consumer interacts while shopping and how they will be reached. Omnichannel retailing does not exclude a bricks and mortar store like traditional e-commerce nor does it consider it a showroom where the customer goes to preview the product prior to purchase. A bricks and mortar store is one of the tools that is used for marketing and becomes stronger when supplemented with online content and mobile devices. For the organization and its supply chain members it means erasing the line between offline and online and providing an experience to help match the consumer with a product. It also means that a business must embrace data, analytics and mobile, and integrate them into its commerce (Green, 2014). Culturally, omnichannel retailing is more intrusive for the consumer, but it has the ability to provide for a simpler and better informed shopping experience. Regalado reports that Macy’s places 24 different tracking cookies on a consumer’s web browser, and their mobile app download is capable of finding the closest store and scanning barcodes for prices. Along these lines, smartphones can be used to track movement throughout the store (Brynjolfsson, Hu and Rahman, 2013). Omnidirectional retailing will help retailers increase returns by helping the consumer find a product, allowing them to research reviews and even providing them coupons or incentives as they near a product (Regalado, 2013). By embracing technology, retailers can gain a competitive advantage at the same time they are helping the consumer.
  3. 3. Omnichannel Retailing 3 Omnichannel Cases Hointer is a jean retail store that combines a physical location with an array of digital technology that helps to streamline the purchase process. The Hointer retail store does not contain inventory in the showroom area; instead shoppers are exposed to one pair of jeans in each style that is displayed open hanging at eye level. The customer first downloads the Hointer app that allows them to continue their shopping experience. When customers find a pair of jeans that they would like to try on, they use their phone to scan the etag that is on the jean. The app then displays digital media information such as reviews, Facebook pictures and Twitter comments about the product. If desired, the shopper then selects the size. The app tells the customer which fitting room to go to as the jean is delivered through a patented Woosh delivery system (Hointer, 2014). Upon entering the larger sized fitting room, the shopper can try on the jeans to confirm the fit. If a different size is needed, the shopper uses the touchscreen in the fitting room to select a new size and deposits the jeans in a slot. If consultation is needed an Hointer associate is notified via a tablet and is informed which jeans were selected, allowing the associate to immediately start an informed dialogue with the shopper. After selecting the pair of jeans to purchase, the shopper proceeds to a kiosk in the store where their smart phone identifies the items in the shopping cart and a credit card is swiped. Hointer is ahead of the digital curve in applying omnichannel retailing techniques to its business. It is proactive in initiating metrics through the download of their app. It then continues by linking the shopper to social media to view pictures and opinions and also provides real-time information about store stock and assistance if needed. Hointer offers brand name jeans and one area that would benefit them is with differentiation. However, Hointer has done that too by offering free hemming service. The jeans can be hemmed to maintain the original hem length or hemmed with thread that matches the existing stitching. In either case, the jeans can be picked up the next day or mailed to the shopper free of charge. In all, Hointer blends the social, local and mobile aspects of omnichannel retailing into an effective arrangement. This type of arrangement might be suited for a restaurant with a simple menu. Customers could come in and download the app, which tells them what table they will be sitting at. They then could place their order by scanning an etag on the menu and even see reviews before ordering. Once the order is filled, they could be served and request assistance and/or pay using their phone. In this application, the restaurant would save on hosting and wait staff, helping them to achieve a competitive advantage. Becoming omnichannel is important for Walgreens as well. Walgreens has a significant store presence with over 8,000 locations, so adding the digital component is beneficial. Walgreens offers the full spectrum of shopping patterns from researching online / paying online to researching online / looking in the store / then paying online. What Walgreens metrics have shown is that customers who shop in stores and online spend 3.5 times more than store shoppers only and shoppers that use mobile, store and web spend an average of 6 times more than store only shoppers (Swerdlow, 2013).
  4. 4. Omnichannel Retailing 4 Walgreens was one of Apple’s first partners to use Apple Pay, which uses near field communication (NFC) technology that allows for payment via phone (Samuely, 2014). Other services that they offer are refilling of a prescription by scan and remote printing of pictures from mobile devices and social media profiles that can be picked up in a store. By developing simple mobile applications, Walgreens has streamlined the checkout experience and enhanced the overall customer experience. One channel that Walgreens could improve upon is to use Beacon technology that allows Walgreens to track shoppers by their mobile device and send shoppers information and offers when they are near a particular product. Using this same technology, Walgreens could send offers to shoppers when they are in proximity or leaving the store without making a purchase. These applications can also be used in a supermarket. If a shopper is purchasing pasta, the store may want to notify them of a special deal on sauce, Italian bread or even a manager’s special. It would also allow the store to also collect analytic information such as the time spent in the store and what aisles were visited and the variety or brands that were purchased.
  5. 5. Omnichannel Retailing 5 References Brynjolfsson, E., Hu, Y. J., & Rahman, M. S. (2013, Summer). Competing in the Age of Omnichannel Retailing. MIT Sloan Management Review. Retrieved November 21, 2014, from http://sloanreview.mit.edu/article/competing-in-the-age-of-omnichannel-retailing/ Green, J. (2014, January 27). Why and How Brands Must Go Omni-Channel in 2014. Marketing Lands. Retrieved November 22, 2014, from http://marketingland.com/why-brands-should- go-omni-channel-in-2014-70970 Hointer. Products. Hointer. Retrieved November 22, 2014 from http://www.hointer.com/ product_analytics_full.html#Features Palmer, M. (2014, November 14). Competition in retail space heats up. Financial Times. Retrieved November 21, 2014, from http://www.ft.com/intl/cms/s/2/32731e0c-634b- 11e4-8a63-00144feabdc0.html#axzz3KTEWYSem Regalado, A. (2013, November 14). Beyond the Checkout Cart. MIT Technology Review. Retrieved November 21, 2014 from http://www.technologyreview.com/news/520786/its-all- e-commerce-now/ Samuely, A. (2014, November 5). Walgreens exec: NFC payments doubled following Apple Pay integration. Mobile Commerce Daily. Retrieved November 22, 2014, from http://www.mobilecommercedaily.com/walgreens-leverages-consumer-first-mobile-strategy- to-drive-in-store-mobile-traffic Swerdlow, F. (2013, Frbruary 5). The Walgreens Path to Omnichannel Success. National Retail Federation. Retrieved November 22, 2014, from https://nrf.com/news/mobile/the-walgreens- path-omnichannel-success

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