Lack of visibility in omnichannel leads to lost sales, loyalty and revenue

Lack of visibility in omnichannel leads to lost sales, loyalty and revenue

It is no secret that customer expectation for a consistent omnichannel retail experience continues to grow,  but the question remains as to the true business cost for retailers who aren’t yet joining up all the dots in their omnichannel services.

Recent research conducted by Sapio Research on behalf of supply chain technology specialists Zetes, in association with Zebra Technologies, reveals just how customers are responding to subpar events and the way they expect a retailer to respond across all channels.

The issue for retailers is that customers have limited patience and expect their experience to be fast and efficient: the majority of customers (70 per cent) would not be willing to wait for longer than five minutes in-store to find out whether an item is out of stock; 30 per cent no longer than two minutes.

Online, this customer behaviour continues. Within the grocery sector, 26 per cent of respondents would look for a substitute or something similar online if their desired item wasn’t available, whilst 30 per cent of consumers shopping for homeware and 31 per cent for fashion would go to another website or abandon the whole purchase. The financial implications are very significant, with homeware stores losing up to 33 per cent of their sales and fashion 31 per cent, as a result of out of stock items.

Moreover, over three quarters (78 per cent) of customers would consider not using a retailer again if a delivery was late or incomplete three times, with nearly a third (31 per cent) prepared to accept just one late or incomplete delivery. If customers are employing the ‘three strikes and out’ rule in one channel, it is more than likely the same attitude is being applied across every channel, creating a significant impact on the customer experience, and by default, loyalty.

Customer expectations are undoubtedly reinforcing the need for strong supply chain models that combine a single view of inventory with accurate, real-time visibility and proactive monitoring. Yet while retailers agree that creating a single view of inventory is a priority, with 81 per cent citing it as of high or critical importance, just 36 per cent of retailers have to date achieved this goal.

Other key survey findings include:

  • Less than a third of retailers offer customers access to accurate inventory levels for products across all store locations and 45 per cent offer no access to inventory levels at all
  • Just 20 per cent of retailers are using automated systems that are updated in real time and only 19 per cent of store associates can check product availability via a mobile device
  • Over half (58 per cent) of consumers will be less likely to use a retailer if returning items is a challenging process

Gareth Thomas, Retail Business Consultant at Zetes said, “Retailers know that any break in direct customer engagement can not only undermine the quality of experience but also result in a lost sale. Today however, most retailers’ store associates are operating blind, with no way of determining stock availability within the wider supply chain or store network and no way of fulfilling the customers’ requirements through click and collect or home delivery, without disengaging with the customer or having to take them to another part of the store.”

“While the intent is clear and retailers are heavily focused on improving the customer experience, the lack of real-time visibility across the supply chain is constraining them and is potentially causing more problems, and more lost revenue, than many realise. With the new war against competition fought not just on price and quality but on the ability to respond to the customer’s ever-changing and increasing expectations, achieving fast marginal gains and complete visibility throughout the supply chain will be a major differentiator in 2017 and will impact heavily on customer loyalty in the future.”

The research surveyed 2,022 consumers across the UK, France, Germany and Spain and 214 retailers in March 2017. Zetes’ ‘Understanding the role of the store in omni-channel retailing’ report is available upon request.

www.zetes.co.uk/retailsummit

www.zetes.co.uk

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