Omnipresent Opportunities
As revealed on the “sleepless nights” infographic on page 44 in this year’s 83rd Annual Report of the Grocery Industry, the trio of foremost concerns weighing heavily on the minds of retail executives — rampant minimum wage hikes, data protection/cybersecurity and deflationary food prices — aptly reflects their status as top headline-grabbing news stories in recent months.
While Jim Dudlicek’s commentary on page 10 touches on another issue factoring prominently as a top-of-mind consideration for grocery execs — the increasing importance of fresh prepared food programs — perhaps no other issue du jour is more significant than omnichannel strategy, which has rapidly emerged as a top priority in a relatively short time span.
In fact, it was only two years ago that we posed the first-ever omnichannel question in our Annual Report survey, regarding companies’ adoption rates and readiness regarding an integrated in-store, online and mobile platform. Although historical data fluctuate from year to year, due to a unique set of viewpoints captured from a varied set of annual survey participants, the pervasiveness of omnichannel, both in practice and as a concept, has clearly gained considerable traction in the course of 24 months.
Evidence of the transformational changes retailers are making to embrace evolving consumer preferences is detected in the gap between the 18 percent of retailers who describe themselves as being in the early stages of omnichannel adoption this year, a significant tightening from the 30 percent logged in 2014. Equally telling is this year’s 45 percent of respondents who report making solid progress with a semi-cohesive omnichannel scheme, versus 29 percent two years ago.
While the omnichannel needle is decidedly moving in the right direction in the retail food world, where the vast majority of players recognize the need to create a holistic experience that transcends channels for connected consumers, recent insights from Boston Retail Partners (BRP) further underscore a daunting journey in play for many.
According to BRP’s 2016 POS/Customer Engagement Survey, 85 percent of respondents indicate that unified commerce is a top priority. However, in light of the costly and complex proposition before them, many retailers have taken the “just get something done” approach to enter the game, with this quick-fix strategy resulting in what BRP study cohorts describe as a “faux” omnichannel model that potentially poses a bigger risk of disappointing, rather than delivering for, customers.
“Many retailers are realizing that the future of POS is part of a unified commerce platform that hosts a single shared cart across all channels and is integrated with order management,” notes Brian Brunk, a principal at BRP. However, while there’s no denying the fundamental changes occurring in how retailers think about omnichannel, existing legacy systems weren’t designed to deliver the necessary integrated capabilities customers expect, which in turn finds many retailers scrambling “to cobble things together,” adds Ken Morris, also a principal at BRP.
The risk of losing customers because of disappointing shopping experiences as a result of “flawed omnichannel architecture is deadly,” affirms Morris, which is why he urges retailers “to do it right” by investing in infrastructure, networks and service-oriented architecture (SOA).
Two other key findings of BRP’s 2016 POS/Customer Engagement Survey that dovetail well with insights from our Annual Report of the Grocery Industry include:
Improving customer engagement and the customer experience is critical (infographic on page 46).
Retailers are still occupied with payment/data security (infographic on page 44).
We extend our earnest thanks to the 131 senior-level retail participants who responded to our Annual Report of the Grocery Industry survey, whose shared viewpoints and valuable time have enabled us to carry on a tradition that’s spanned a healthy 83 years. As we look ahead to next year, we encourage continued participation from this year’s exceptional base of executive panelists, and hope to have a chance to tally a wider pool of views for an updated annual survey, for which advance feedback and guidance are warmly welcomed.
Meg Major
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Twitter @Meg_Major/@pgrocer
While the omnichannel needle is decidedly moving in the right direction in the retail food world, a daunting journey is in play for many.