California Apparel News

It’s not exactly a household term, but many retail analysts are bullish that omnichannel retail is transforming the shopping experience.

The term “omnichannel retail” still might have a gloss of science fiction around it, but it’s happening across the mall and on every fashion street, said Greg Girard, program director, merchandising marketing and retail-analytics strategies, for market-research firm IDC Retail Insights. Girard defined omnichannel retail as being able to connect with a consumer in any and every way possible, mostly through mobile phone, to e-commerce, social media, bricks and mortar, and even TV.

With omnichannel retail, a shop can satisfy a consumer’s needs by juggling every solution available—and with every shopping channel. For example, a shopper can order an item by smartphone and personally pick it up at the store or have it delivered to a third-party address. Or, equipped with a tablet, a sales associate can immediately order an item the store does not have in stock instead of taking extra time to order the item through store bureaucracy.

Some omnichannel practices have become common at places such as the Apple store, where sales associates rove around with mobile devices to check out consumers’ purchases—rather than asking customers to wait in a long line to pay for an item at a cash register. (Other retailers are following Apple’s lead. Nordstrom Rack stores in Southern California have roving checkout associates, as well.)

At the most futuristic level of omnichannel, a store employee located at a remote site can help consumers and give real-time directions on where to find an item at a neighborhood store.

“Consumers have increasing expectations that ‘I can have it anywhere I want it,’” Girard said. “Omnichannel retail is a key chief-executive initiative in 2013. That’s a tipping point.”

In its top-10 predictions for 2013, which were released in December, Framingham, Mass.–headquartered IDC Retail Insights forecast that omnichannel retail will enter the mainstream this year. Major retailers, ranging from Macy’s Inc. to Wal-Mart Stores Inc., have made significant technology investments in omnichannel to offer consumers access to their shops through a variety of means, from mobile shopping platforms to increased e-commerce.

While the first adopters of omnichannel retail were criticized for rushing into trends before the trends were embraced by shoppers, Girard points out that retailers are not leading the public. The public is demanding omnichannel retail.

The popularity of retailer apps for mobile devices is skyrocketing, according to a study released Jan. 25 by San Francisco–based Flurry Analytics. The survey claims that downloads of retailer apps offered by prominent retailers—including Walmart, Target, Macy’s, Gap and Victoria’s Secret—increased 525 percent in December 2012 when compared with the previous year.

Demand for mobile shopping is increasing, according to consulting group IBM Smarter Commerce. According to a Nov. 27 statement, during Cyber Monday 2012 more than 18 percent of consumers used a mobile device to visit a retail store and 13 percent used a smartphone or tablet to make a purchase.

Providing access through every channel makes sense in a tough economy, where retailers must look high and low for every dollar, said Mercedes Gonzalez, director of New York–based Global Purchasing Companies.

“We’re the last ones to embrace anything new,” Gonzalez said of the fashion business’s relationship with technology. “Either we’ve been too busy or the investment was too great. … But you can’t make the customer want to come to you. You have to give them the most opportunities to give them your dollars.”

However, American retailers have reacted quickly to the changes and challenges of omnichannel retail, said Arish Ali, chief executive officer of Skava, a San Francisco–headquartered provider of tablet and mobile technology. Skava recently opened an office in London.

“Over 95 percent of U.S. retailers have optimized their websites for smartphone traffic,” Ali said, “while just over 50 percent of their European counterparts have done so.” But European retailers are catching up quickly, which is why Skava recently opened a European office in London.

Retail technology is changing quickly, Ali added. “In the space of not much more than a decade, retailers worldwide have had to rapidly evolve from just serving customers through bricks-and-mortar stores to now having to serve them from through a number of different channels.”

Change is happening across the board with retail.

For an independent boutique, investments could be as small as adjusting a store website to extend its capabilities to tablets, Gonzalez said.

Larger operations look to technology companies to renovate how they fulfill orders. Guess Inc. recently announced a deal with VendorNet of Boynton Beach, Fla., to build its omnichannel retail capabilities. When VendorNet finishes its job in the second quarter of 2013, Guess will be able to provide its shoppers with extra ways to access store goods, such as a ship-from-store option, which can deliver goods from more than 500 Guess stores. Guess runs 513 stores in the United States and Canada and 312 stores in Europe, Asia and Latin America.

Omnichannel endeavors are taken seriously at the highest echelons of leading companies. On Jan. 28, Macy’s Inc. announced it created the new senior executive position of chief omnichannel officer. Robert B. Harrison was named to the new position, and he will report to Terry J. Lundgren, chairman, president and chief executive officer of Macy’s Inc. In his capacity as chief omnichannel officer, Harrison will manage strategies to integrate Macy’s bricks-and-mortar, online and mobile channels. He also will work with the retailer’s logistics and related operating functions.

Eventually, retailers will gather in one system all company functions—from omnichannel to finance, enterprise resource planning and customer-relationship management—said Mark Mosch, director of the enterprise solutions group for New York–headquartered CGS Inc.

For the best mode of operation, Mosch recommended putting all store information programs on one system. Many retailers cannot afford a new system, so Mosch recommended taking a core system and seeking ways to integrate it into other sections of the company’s systems.

“So many people do not think of all of the implications of omnichannel,” Mosch said. “They don’t think how this system will talk with everything else I have.”

Increasingly, developing omnichannel capabilities is merely keeping current with customers’ expectations of good service, Mosch said. Otherwise, a store might be written off as providing antiquated service and will be dropped.

While many describe omnichannel as a wave of the future, Fraser Ross, founder of the Los Angeles–headquartered Kitson chain of boutiques, which also maintains a soaring e-commerce operation, believes there are some drawbacks to the omnichannel model.

“You’re conditioning [consumers] to not go to stores,” Ross said. “If they’ve already seen it on Instagram, there’s no excitement value when they walk into the store.”