An eye on the omnichannel strategic collaboration   

Sally El Akkad, Director of Marketing and eCommerce at Electrolux Egypt

Had you heard before “Those e-commerce guys are trying to take our spark” or “yes they might be the future, but retail sizeable chunk is what pays the company salaries, thus let us keep our focus”.

It is literally a no way that you had not heard that before, no matter what tonality, serious or hilarious,   nice or rough; message is clear…it is the clash of channels.

Varies from repetitive disputes to toxic competitions, The Clash of Channels affects the company strategic growth, so rather than growing together as a team, teams members dilute the growth journey by personalizing outputs & focusing on the wrong things, withholding information, imposing their insecurities & surely bringing down workplace moral/ culture. In other words, when management ignore the balance between channels & derive unhealthy competition, they indirectly promote the concept that someone must lose if you must win.  A sensitive topic that requires a surgical treatment for value creation 

Does the online complement offline offering to consumers or does it cannibalize it? 

One answer can be the paper finding stating that once induced to buy online, consumers who live near the retailer’s physical store tend to increase their offline spending and total sales by 47% (i.e., complementarity effects for nearby consumers). However, for consumers who live far away from the brick-and-mortar store, inducing them to buy online can backfire by reducing offline and total sales by approximately 5.7% for each additional kilometer of distance (i.e., cannibalization effects for distant consumers). “Xueming Luo, Yuchi Zhang, Fue Zeng, and Zhe Qu 202”.

From my experience, the empirical results reveal that the online channel addition mainly has a synergy effect on the whole brand/ traditional retail channels, it has a positive effect on the sales and product variety, the basket size & even repetitive purchase “loyalty”, furthermore the online channel addition also has a positive effect on the offline sales as well “qualified interested traffic/ consumers” who want to see the physical products before buying it … thus, I see it definitely a synergistic shopping experience.

So, if we conceptually agreed that online integration facilitate the shopping decision whether to be made online or offline? Then why we can spot heat & ambiguity!.

When management tries to leap to the next level without establishing adequate foundational alignment & responsibility matrix “RACI”, they often fail. So if you really want to win you need to ensure a happy marriage of those channels, they need to share their data ; enable a technological infrastructure & dedicated collaborative cross-functional teams, worth mentioning on of the challenging encounters is the supply chain operational excellence for instance.

Let us dive in the instrumental role of supply chain in deriving the future of omnichannel & best in class consumer experience; while Traditional supply chain operations are well established, its consumers expectations to a great extent is established as well, which is not the e-commerce consumer expectations status, consumer expects shorter delivery times with a great experience; In addition, e-commerce fulfillment is much more complex than traditional brick-and-mortar or wholesaler fulfillment. When customers can order 24/7, demand is less predictable. Order sizes are significantly lower. The increase in speed and complexity drives up fulfillment costs. Based on Mckinsey, an online order’s cost per unit can easily be 4-5 times higher than traditional brick-and-mortar replenishment and 10 times higher than wholesale fulfillment.

Do we need a crystal ball to do that forecast & help making our supply colleagues lives easier? … We don’t need a crystal ball for that, we need logic & an eye on historical data, consumer trends, analytics & ambition plans to derive, understanding the budget in hand that will enable optimization along with activating my personal favorite secret weapon rudimentary retargeting and lookalike segmentation.

Is it worth the headache? The short answer is ABSOLUTELY. Building out an omni-channel experience brings a huge value to any D2C player; research has found that consumers shopping online tend to buy more, and consumers that pick up online orders in store often make additional in-store purchases “Bureau of Labor Statistics 2019 bls.gov.” adding to that how else are you planning to give a holistic consumer experience, stand out in the crowd & amplify shopping touch points!!

A dilemma worth discussing, you might think that you are currently deriving an omnichannel experience, but fact is not because you have an e-commerce website you do, a lot of channels syncing & operational integration needs to be in place otherwise you are at the MULTICHANNEL stage, yes, you might be trying to bring that merge, you might be testing;  

  1. QR codes on all your POSMs or even on the goods itself 
  2. Incentify retail staff for deriving consumers to buy online “especially if it is OOS instore” 
  3. Do the buy online, pick up from store approach “or return in store” 
  4. Promocodes 
  5. Derive traffic to retail through digital campaigns 

Deciding on which strategic path to embrace requires looking beyond the current horizon. It is not a question of good or bad status it is a question of honest analysis to your business stage “opportunities & struggles” because the more you are aware of where you are standing the more you will be able to develop and derive change and deliver a truthful integrated shopping experience

Generally, leaders must provide an accelerated incubation of resources & talents to derive the channel of the future, the momentum excreted is what reflects organizational seriousness & commitment to grow it. Most importantly ensure strategic alignment across organization on the omnichannel agenda, openly tackle & dissect the fear that online channels cannibalize in-store sales to avoid channels dispute. Honestly the Tandem of channels is the brand/ company way out to go beyond the clutter & help fulfilling its purpose while making profits … and while the resistance is on the rise, it will logically diminish by time … a wise man once told me “Sally, Give time to time!”