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How Brands Can Achieve True Omnichannel: Manage Stores More Like a DTC Website

The acceleration of e-commerce has placed great pressure on retail omnichannel strategies, with digital sales accounting for roughly 20% of total sales in Q2 2020. While the word has been around for years, achieving true omnichannel has proved challenging and many brands are still unprepared for a truly cross-channel market. In order to succeed, NewStore CEO Stephan Schambach recommends brands treat their stores more like a website.

“That doesn’t mean to reduce or eliminate human interaction,” said Schambach. “The Amazon Go model works for cash and carry businesses, but not for brands. Brands should operate stores with the same digital principles and discipline as they do online.”

Specifically, Schambach advises brands to reconsider how they utilize their store inventory as part of a larger revenue strategy. One of the successes of e-commerce is its ability to offer “endless aisle” capabilities; all products are available, because consumers have access to the entire inventory, which is spread across multiple warehouses. By contrast, traditional brick-and-mortar has been confined to what is available on the premises.

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This is no longer the case. Brands can make inventory available across all locations, whether consumers are making their purchase online or in-store. By offering multiple delivery methods, shoppers can select the most convenient option for them, whether they buy online and pickup in store; arrange for curbside pickup; or have their store purchase shipped directly to their home from another facility.

A new report from omnichannel store solution NewStore found that while the omnichannel leaders are offering this range, there is room for improvement for the majority of merchants. NewStore’s 2021 Omnichannel Leadership Report found that 32% of retailers now offer curbside pickup, while 40% offer BOPIS and 44% show available store inventory online; this is up from 25% offering BOPIS in 2019 and 32% offering inventory visibility in 2018. But this is still less than half of all retailers analyzed.

Allbirds
DTC brand Allbirds has moved from being e-commerce-only to launching multiple brick-and-mortar locations, after scaling successfully.
CREDIT: Courtesy of Allbirds

“We’ve seen an increasing number of brands roll out omnichannel offerings in recent years; they’ve had to” said the report’s authors. “It’s the only way to keep up with evolving customer expectations and keep stores relevant. But we aren’t seeing omnichannel convenience at scale yet. Consumers will continue to be conscious of what they buy and how they buy it.”

While there are many omnichannel technology solutions available, Schambach argues that the most important factor is to be in control of the process. When working with multiple retail partners, brands are able to tap into existing retail infrastructure and capabilities – but also lose oversight. Many shoppers also expect consistency from their experience, which can be hard to achieve when a brand’s products are sold through various retailers, each with differing service options.

The alternative is selling direct to the consumer, whether through brick-and-mortar or online. The pandemic led many brands to launch their own e-commerce platforms, in order to sell DTC when their retail partners had to halt operations. But even beyond the pandemic, Schambach believes that this is the right move for companies looking to grow their omnichannel strategies.

“Brands that sell through wholesale should look long and hard at that part of the business,” said Schambach. “The model has been in trouble for a long time, and it’s certainly not getting better with the pandemic. There is more profit in Direct to Consumer, and the importance of owning the brand experience should not be overlooked.”

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