January 11, 2022
Does a customer really care who handles their purchases, customer service questions, or returns as long as it’s quick and convenient? Is a unified back-end process managed by a single entity the key determinant of retention in 2022?
Having recently purchased an item from Walmart.com and returned it to a FedEx office closer to me than the nearest Walmart store, I would say no to each of these questions. Walmart’s drive to “cultivate” this aspect of product returns points to an opportunity that goes beyond traditional operating models.
The same could be said of department stores that go out of their e-commerce business. Many retail experts express their horror at what looks like a regressive step in the pursuit of a unified customer experience.
Some fear competition for customers between the once unified store and e-commerce operations. Others see stores becoming simple distribution centers optimized to support digital sales and returns.
The omnichannel problem of retail has been characterized by operational silos preventing a smooth customer journey through channels. This was true in the past, but today there are factors that are redefining omnichannel.
A customer experience-focused software engineering team is interested in the in-store experience as it helps customers find, buy, and collect their purchases as efficiently as possible. Nothing in this statement suggests that the stores should be owned and operated by the same entity. It is a research exercise, not a mandatory business model.
Shopping behaviors have been forever changed by the pandemic, with consumers buying more online. Successful digital operations are a necessity, not an option. These need funding and focus given the rapid pace of innovation and competition.
Speaking of innovation, Industry clouds AWS, Google, Microsoft, and others are driving massive growth for these tech companies. These bring best practices, lower costs and agility to retailers who struggle to adapt to constant change, given decades of legacy IT acting as an anchor on digital transformation.
The cloud provides easy access to analytical methods like AI and external data to power differentiated experiences at any touchpoint, whether digital or physical. An increased intra-industry partnership, technology integration strategy and the cloud will define omnichannel success in 2022 more than the interweaving of store and e-commerce operations under one banner.
DISCUSSION QUESTIONS: Do customers care about who handles their purchases, customer service questions, or returns? Can retailers maintain seamless customer experiences through separate physical and digital operations?
“Activist investors are pushing stores like Macy’s and Kohl’s to separate their physical and digital operations, but this is totally counterintuitive.”