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4 Challenges of Omnichannel Retailing and How to Solve Them

4 Challenges of Omnichannel Retailing and How to Solve Them

Published on: 09 Dec 2020 7 min read

(Updated August 2023)

Navigating the omnichannel retailing landscape is not an easy task. The goal of omnichannel is to improve customer experience while benefiting all stakeholders. Ideally, everybody should win. Buyers get better customer experience through multiple sales channels while merchants increase their revenue, often rapidly.  

4 Challenges of Omnichannel Retailing 

However, businesses need to be aware there are cross-channel commerce challenges that can lead to significant revenue losses if they remain unaddressed. In this blog post, we discuss 4 major omnichannel challenges and offer ways to resolve them. Hopefully, this piece will bring your business closer to delivering a truly personalized experience and customer service.

What Is Omnichannel Retailing? 

Compared to the traditional single-channel retail model in which retailers rely only on either offline or online product sales, the multichannel approach adds greater convenience for customers. Through the omnichannel approach, they can make a purchase across multiple devices and online platforms. It combines the benefits of both online and offline services to accomplish the end goal: delivering greater customer experience. 

In addition, omnichannel taps into website campaigns, email and text marketing, social media, and print advertising to expand the brand’s reach through various channels all working at the same time. This dynamic digital presence gives customers an instant and continuous stream of content that solidifies the experience the product offers and builds brand and customer loyalty. 

Yet despite the many benefits it brings, creating a seamless omnichannel model for your retail business does come with certain challenges. Let’s go over each one so you can be better prepared on how to address them.  

4 Challenges of Omnichannel Retailing 

1. Data Synchronization 

Data can be the most powerful tool for your success if you use it correctly. Yet data’s goal is not always to give you all answers; sometimes it shows you the direction in which to look for them. However, its importance is evident and with so much information to analyze from multiple channels, you are almost bound to make mistakes.  

Data loss and misinterpretation of customer trends, purchase interests and patterns happen without a solid omnichannel strategy in place. Poor data synchronization can sabotage your whole omnichannel system and prevent it from working seamlessly. In contrast, if your data is well synchronized, you will be able to gain valuable insights into buyers’ behaviors and get accurate and powerful demand predictions.  

How to Solve It 

First, build a data management strategy that will allow you to create data categories and store specific information in each one. Also, you should monitor and measure the growth of your channels using sales history. This will allow you to manage data optimally and avoid or minimize synchronization issues.  

We advise retailers to stick to a single reliable enterprise-grade eCommerce system like SAP Hybris or IBM Websphere Commerce, which help streamline operations and handle multiple customer touchpoints.

2. Channel Conflicts 

You should monitor and manage all your channels as equally important, but it is often the case that businesses pay attention to one of them leading to others lagging behind. It is usually the channel that brings in the most profits that gets overplayed. As a result, not all channels are fully integrated with one another, and have different control and distribution.  

On top of that, there could be disagreements across management teams as each of them has different sales targets and channel goals. Consequently, retailers fail at delivering personalized customer experience and cannot adequately meet customers’ demands.  

How to Solve It 

Prioritizing one channel over another is not effective, as it may lead to missing orders. Omnichannel retailers must keep up to date with inventory data for each channel and measure sales growth, respectively.  

You can achieve this with the help of real-time data analytics which helps identify deficiencies, predict disruptions, and find various opportunities for improvement. If your budgets allow it, we advise you to adopt a real-time integration solution for optimal results. 

3. Lack of Visibility 

It is hard to offer great products tailored to a specific customer base without clear inventory visibility. Add all those channels into the mix.  

What happens when you have listed 2-day delivery, but the item arrives 2 weeks later? What if there is different item information across channels? Or worse, you realize the item is out of stock. 

What customers expect and want the most is to get what they are looking for as quickly and effortlessly as possible–they don’t care about channels. Besides having an effective order fulfillment process in place, gaining visibility is critical for making forecasts for product demand. 

How to Solve It 

Your eCommerce platform should have automated inventory management for real-time inventory data and tracking. Keeping up with technology is key to building a successful omnichannel retail strategy and offers a way to manage demand and supply variability.  

Or, you might have to choose a separate inventory optimization software that would enable you to determine how to manage your inventories across the supply chain. In this way, you would significantly raise customer experience to the level your business requires. Through inventory visibility, you will make sure that best-sellers are always available and there is no excess stock of slow movers.  

4. Ineffective Logistics 

Just as making a purchase should be an easy, pleasurable experience, so should returning an item and asking for a refund. A product may have arrived damaged, or it may have been the wrong size, color, or style from what the customer ordered.  

This part of the retail business is called reverse logistics and directly impacts brand loyalty. When customers decide to return a product, this means there is a reason they are unhappy with it and their experience will get worse if they cannot remedy the situation in a fast and efficient way.  

How to Solve It 

If a customer experiences difficulties returning a product, they are highly likely to leave the brand. Therefore, it is crucial that you have an adequate return policy in place, one that has no extra charges and makes the entire process quick and almost effortless.  

A simple return process that is accessible from any channel and device is critical for keeping customer satisfaction up. Shipment status and tracking are also an important feature. In addition, you must pair it with constant communication to alleviate the stress of your customers and keep them updated. 

How to Create a Great Omnichannel & Customer Experience 

If done right, omnichannel services make for an excellent customer experience and this is what keeps buyers coming back. Every business or marketing strategy that yields remarkable results, however, must be executed thoughtfully and with careful planning.  

First, you must identify the weaker aspects of your process, such as data synchronization issues, potential channel conflicts, lack of inventory visibility and ineffective reverse logistics and address them holistically. This means talking to your management teams openly, introducing the necessary changes across all channels and deploying the right digital tools that help with optimization.  

Conclusion 

Today, there is no single way customers shop. They buy groceries, furniture, clothing, electronics – anything, really, with a few clicks or swipes, driven by the need for quick gratification. To satisfy this need, you must create a smooth shopping experience across all your channels. This, as discussed in this article, can be quite challenging.  

However, offering a great omnichannel experience is the only way for you to remain relevant. Remember that there are certain aspects of the process you need to keep in mind as you go about building your strategy. The first step to improving your omnichannel retail model is being aware of the challenges and facing them head on.  

Scalefocus is here to help. Our experts will provide full replatforming, custom chat bots, integration with international shipping and warehouse providers, and sophisticated affiliate management that will take your omnichannel customer experience to the next level.

Reach out to discuss our fully personalized technology approach that will ensure your omnichannel strategy is impeccable and yields the desired business results. 

About the Author:

Velina has been writing in one way or another most of her life. In 2020, she took a leap of faith and left advertising to explore the unlimited potential of the technology world. She is interested in topics such as FinTech, Digital and Neobanking, Payments, and Embedded Finance among others. Outside of technical writing, she enjoys vegan food, films, and creative storytelling.

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