What’s Ailing Today’s Omni-Channel Retail: The Top Three Challenges

July 7, 2017

The retail industry’s challenges are multifarious – from delivering seamless omni-channel experiences to catering to the demands of ever growing mobile shoppers, grappling with shrinking profit margins and adapting to trends that change at the drop of a hat.  How a retail business addresses these challenges could spell the difference between stupendous success and dismal failure.


Here is our pick of the top three challenges facing omni-channel retailers today.

#1 Enabling omni-channel logistics:

Even as retailers realize they must discover new ways of reaching customers, they are held back by legacy retail and supply chain networks that fail to go hand-in-hand with new product delivery channels.  Consumers on the other hand, demand quick availability, same-day deliveries, and convenience across touch points – a tall order for retailers having less-than-streamlined supply chains. KPMG’s Omnichannel Retail Survey 2016 reveals that for over 42% of online shoppers, next day free home delivery is the most preferred mode, while only 28% opt for 2-5 day delivery period. Overhauling processes and infrastructure, breaking silos to enable integration of supply chains with other business units, and collaborating with other industry players to bring inventory closer to market is therefore critical for retailers eyeing omni-channel success.   

#2 Breaking the old-school mindset around technology usage:

The fact that retailers are  struggling to deliver consistent omni-channel experiences is beyond dispute. Poor customer data insights are to blame for their omni channel failures, according to a McKinsey Periscope survey . 45% of survey respondents said their omni-channel efforts are not paying off, while 36% revealed they are still in the ‘testing a proof of concept’stage. Technology silos are also huge stumbling blocks as most retailers have implemented new digital technologies – such as mobile apps, social properties, and web and media channels – as standalone assets.

Omni-channel experiences, on the other hand, demand that all channels be integrated to allow for seamless data sharing and transfer. One way to do this is to adopt cloud technologies. The Yankee Candle Company, a North American retailer of premium scented candles, moved its applications to the cloud to support its omni-channel vision and deepen customer-connect. Macy’s – the high end retail brand also reorganized its technology structure to cater to omni-channel shoppers – who are 8X more valuable than single-channel shoppers in the brand’s case.

#3 Ensuring security and regulatory compliance across channels:


Today’s consumers are more aware, tech-savvy, and quick to hold retailers accountable should they fail to deliver quality products – regardless of the price point. Compliance norms are also getting tighter as consumer bodies and governments increasingly favor consumers in safeguarding their rights. Getting proactive about compliance is no longer a choice for retailers as consumers increasingly link regulatory compliance to a brand’s overall image – putting reputation, marketing, and PR efforts at stake should a compliance disaster strike.  

As an omni-channel environment relies more on open, borderless information flow and cross-channel availability, it comes with new digital risks. According to the PwC Global State of Information Security Survey 2015, only 54% of retailers had an accurate inventory of how and where they collect, transmit and store data. This is far from acceptable in today’s world where hackers are increasingly targeting retail chains. Retailers need a robust omni-channel fraud strategy if they are to protect and secure themselves and their customers.

Whatever you do, keep it consistent across channels

A superior omni-channel experience revolves around consistency across touch points. However, according to a recent Manhattan Associates report, 52% of the shoppers found that products were unavailable in-store when they were, in fact, marked as available online. Another 59% reported seeing discrepancies between online and in-store pricing. Such discrepancies result in poor customer experience, leading to attrition.

Considering the average lifetime value of an omni-channel shopper is 30% higher than shoppers who use a single channel, its time retailers woke up to the new reality. The key to success in the new era will lie in the retailers’ ability to seamlessly service consumers over multiple channels, leading to a superior customer experience – every single time.