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Omnichannel a Big Failure?

Debate: Omnichannel a Big Failure?

2016-03-04 15:34

Is omnichannel really all it is cracked up to be.

Consultants all over the world are rolling in money from milking large traditional retailers when they want to transform and become "digital".

Combining e-commerce and physical stores is painted as the holy grail or the end of the rainbow, full of gold.

The reality is however very different. Traditional retailers are struggling to combine the two sales channels. Creating the seamless shopping experience that customers demand is usually costing the retailers, not adding to the bottom line.

Click and Collect Is Not Free

It's not often that retailers come right out and say it. Large retailers Tesco and John Lewis in the UK have however started to charge customers for click and collect, ordering online and picking up in store.

Why you might ask? The sports retailer XXL, with around 50 large stores in the Nordic, has been frank regarding omnichannel.

- It's tempting to let customers order directly from the store. You can then offer a very short delivery time but it is expensive, said Tolle Grøterud, Head of Business Development at XXL, late last year.

There are inevitable costs involved in delivering online orders from stores. Especially if you have already put something on the shelves.

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XXL is very sceptical in doing this for free and they even go so far as to say that nobody seems to have calculated the real cost of omnichannel.

Trying to integrate the sales channels can clearly create new costs. Keeping the e-commerce channel separated from the store-model seems to be more profitable for many businesses.

Just Not There Yet?

There have however been reports that attribute the increasing costs to bad integrations. Basically they say that most retailers are not there yet in the real omnichannel experience.

Even if all channels work seamlessly for the consumer the logistics and backend must also work in unison or it will be a very expensive omnichannel experience, for the retailer.

At the same time there is of course no great alternative. You have to go digital and embrace e-commerce. In many verticals all growth is online while offline is stagnant. That doesn't mean omnichannel is the best solution. And seldom is there a pot of gold waiting at the end of the rainbow. Omnichannel is hard and it is easier to make money doing pure play e-commerce.

Julius Gunnilstam

Editor-in-chief

Born computer engineer - today e-commerce expert and the leader of the editorial team at Ecomony. Been writing about e-commerce for six years.

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