Many consumers like to browse online before they buy. Some go straight to their smartphone, others enjoy visiting a store. Because consumers’ shopping behavior is so varied, omnichannel is currently the top priority for consumer goods manufacturers and retailers.
Nearly half of all consumers complain about discrepancies in the look and “feel” of online versus store offerings, according to analysts at Vantiv Research. They also found that online checkouts tend to be plagued by technical difficulties. However, according to Forrester market researchers, the problem runs deeper: Providers need to ensure that transactions are booked reliably, that complaints are handled swiftly, and that recurring payments can be made smoothly.
Consumer goods manufacturers are currently placing a mixture of virtual and physical purchases at the top of their business agendas. Vantiv Research’s analysis differentiates between Internet savvy consumers who look up products and order them online (55%), consumers who compare products online and purchase them in stores (46%), consumers who make all their purchases offline (46%), and consumers who view products in a store before ordering them online.
Consumer goods industry: Digital transformation through omnichannel strategies
One thing is certain: Customers expect a seamless customer experience across all channels. This makes it essential for consumer goods manufacturers and retailers to invest in omnichannel technology and strategies.
More and more customers are comparing the pricing of competitor offerings online before then buying products in a store. In a 2014 study titled Global Consumer Executive Top of Mind Survey, consultants at KPMG found supply chain to be the most heavily invested business area of 2015. Of the 469 decision makers that were surveyed worldwide, 42% listed supply chain as their top priority for this year.
Also of note: The top five investment areas include three themes that are highly relevant to the digital transformation. Data analytics (28%) and digital strategies (28%) are very important for 2015. When asked which business areas are vital for the company to stay competitive, three IT topics came out on top: data analytics (56%), omnichannel strategy (54%), as well as data security and privacy (47%).
A study by Oxford Economics from 2013 demonstrated how much pent-up demand for these topics exists. In this study, only 15% of retailers and 18% of consumer goods manufacturers had completed their digital transformation. Of the envisioned technology projects, 40% for retailers and 49% for consumer goods manufacturers have now been realized. However, a rift between those companies that are well-prepared for a digital, omnichannel future and those who aren’t quite there yet remains.
Omnichannel showcase at CeBIT 2015
As SAP’s showcase at CeBIT 2015 demonstrates, omnichannel concepts hold enormous potential. Analysts at IDC found that new channels are motivating more and more consumers to make purchases. According to the report, consumers who shop across several channels spend three-and-a-half times more money. This could be because it’s so quick and easy to shop from your tablet while lounging on the sofa, or because users of different digital devices generally spend more money. Within two years, the department store Galeries Lafayette achieved a fourfold increase in its number of users: 11 million to 40 million. It’s very obvious that revenue increases with the number of channels that a provider uses to sell his products.
This is due to the opportunities that omnichannel strategies open up for shops as well as consumers. Both parties, for example, can gain insight into shipping processes. Consumer satisfaction is therefore increased, because they now know exactly when their orders will be delivered. Vendors are also happier because they can focus more on in-store sales, rather than spending all their time on the phone with suppliers. Together, apps and mobile-optimized webpages are making it easier and easier for consumers to place orders when they have a few minutes of free time, or while on the go.
Ominchannel does, of course, also mean that consumers will leave behind a history of their shopping habits and interests. This gives vendors a chance to create individualized offerings, but also bears the risk of alienating customers who prefer not to be analyzed in detail. According to a study by the Winterberry Group, four out of five companies want to invest in omnichannel technology. Fifty percent of companies even see omichannel strategy as mission critical.
At the end of the day, what really counts is sensitivity on the vendors’ behalf. Vendors do not want to “spy” on their customers, but they do want to provide them with discrete, well-targeted product deals based on data gleaned from a range of channels.