Channeling the Gap
Our signature Annual Report of the Grocery Industry, which begins on page 21 and has graced the pages of this venerable publication for 88 percent of its 92 years of continuous publishing — contains a trove of essential information underscoring the complexities and alterations transpiring across the ever-intriguing retail food landscape.
The transformations currently under way, however, speak far more than about merely selling food, but rather the full spectrum of components necessary to deliver an overall excellent supermarket experience for today’s multifaceted, multi-device consumers, who decidedly have more brand choices and channel options available than at any other time in history.
With this the case, we posed a first-ever query about omni-channel strategies to our 2014 Annual Report panelists, who were asked to score their companies’ related rates of adoption of, and readiness for, a cohesive in-store, online and mobile platform. While 30 percent were found to be in the infancy stage, followed closely by 29.3 percent who reported that they’re on it, a slim 16 percent said they were fully dialed into an integrated omni-channel scheme, alongside 6 percent who confessed to being generally clueless about the concept.
While the majority of retailers responding to our annual study, regardless of their size, are poised, to greater and lesser degrees, to seize the key differentiation advantages of an omni-channel framework, new research from Accenture and SAP’s hybris software division found that many are nevertheless facing sizable hurdles in bridging the gaps.
Technology integration issues loom as the biggest barriers to implementing digital capabilities for a seamless consumer experience across in-store, online and mobile channels, per the Accenture/hybris study, “Customer Desires vs. Retailer Capabilities: Minding the Omni-channel Commerce Gap,” which polled both consumers and retailers/manufacturers on the perceived divide between shoppers’ rising expectations and what’s keeping retailers from delivering.
Cognizant that omni-channel success is key, the Accenture/hybris researchers revealed that nearly all (94 percent) of retail decision-makers cited deficits in sharing customer data and analytics between channels and locations, and a lack of in-store associate training, as the most significant primary setbacks — which are all the more acute when considering that 71 percent of consumers expect to view in-store inventory online, alongside 50 percent who expect to buy online, followed by in-store pickup. However, only one-third of retailers in the Accenture/hybris study currently offer only “the basics,” with in-store pickup, cross-channel inventory visibility and store-based fulfillment.
Moreover, 40 percent of retailers polled in the Accenture/hybris study reported difficulties with integrating back-office technology across all of their channels, which is hardly surprising. Further, 46 percent of decision-makers surveyed said they already have a dedicated omni-channel team that includes members of all functions, although conflicting priorities and organizational silos remain key challenges. In-store pickup, as noted above, has emerged as a key capability that brick-and-mortar retailers must be able to provide if they expect to compete effectively against online competitors.
In the view of Brian Walker, chief strategy officer at hybris, many retailers are operating in a “false state of omni-channel comfort. The reality is that the customer is way ahead of many retailers in defining what competitive shopping patterns are, not only across channels, but within each channel. If retailers are unaware of, or unwilling to acknowledge, these competitive threats, then their business will go to other retailers agile enough to plug these gaps.” Retailers that fail to grasp the significance of the gaps, adds Walker, are “leaving themselves exposed to a significant competitive disadvantage.”
We extend sincere thanks to the 164 executive participants — hailing from the ranks of publicly traded chains, privately held regionals, independent owners/operators, and wholesaler and distributor decision-makers — who responded to our Annual Report survey, without whose shared time and cooperative forthrightness we wouldn’t have been able to carry on a tradition that has endured for 81 years.