Retailers make progress in melding sales channels to assist shoppers in buying what, when and how they choose.
I am the omnichannel shopper that e-commerce analysts, online retailers and industry observers are always buzzing about.
My recent shopping history is a fitting example. A few weeks ago, I purchased a handbag from Urban Outfitters Inc. I found the bag on the retailer's e-commerce site but went to the merchant's store to buy it because I wanted to touch and feel the soft buttery blue leather before I handed over my credit card. A month earlier, I ventured into a Neiman Marcus store to try on a pair of jeans. The store didn't have my size but the associate helped me purchase the correct size online from a kiosk in the store. And, a few days ago, I used an m-commerce app on my iPhone to check into a Macy's store, which earned me a coupon I could use on that very shopping trip. My shopping activities over the past few months have touched the web, the mobile web and physical stores.
Omnichannel—the buzzword du jour in retailing today—stems from the Latin word "omnis" which means "all." In retail circles, the interpretation of omnichannel is to take all channels and meld them into one. This way, retailers can make their entire product inventory available to all consumers and consumers can shop with them in any way they want.
Retail chains today talk a big game about delivering omnichannel shopping experiences and how they are unifying the shopping experiences consumers have when shopping on the desktop web, mobile web and in stores. But is it really happening?
Internet Retailer sent me on a mission to find out. I trekked to four stores operated by four major chain retailers: Sears Holdings Corp.'s Kmart, Staples Inc., Target Corp. and Walgreen Co. I questioned, I observed and I strolled the aisles. Are employees instructed to match prices in stores with those on their retail sites? Do store clerks really offer customers the chance to buy online when a product is out of stock in the store? Are they armed with mobile devices to help consumers buy or get product information or reviews online?
The answer, in short, is yes. Retailers are making progress on training store employees to help shoppers purchase how and when they want. They are using store kiosks to help shoppers buy items that aren't in stores, and are incorporating mobile devices in stores to make consumers' shopping experiences better. While there are areas that need improvement, my trip showed me that merchants are starting to get it.
Here is my journey.
Notebook in hand and eyes wide open, I stride into my first store of the day—superstore Kmart.
Before I have a chance to step through the automatic doors I'm hit with an illustration of Kmart's omnichannel efforts. Plastered outside is a sign for MyGofer.com, a shopping service that lets consumers order products online that are then available at a local Kmart store for pickup as early as that day. "Shop our store on MyGofer.com," it reads. "Shop online. Get it today. For more information, ask a sales associate."
So I do. A friendly manager shows off lockers that resemble little dog crates. Inside are bags containing the goods consumers have ordered on MyGofer.com. Only a few lockers are filled with bags so I ask how many orders the store fulfills via MyGofer each day. She says between one and four an hour, sometimes reaching as many as 50 a day.
Next, I stroll down aisles and approach an associate stocking flip-flops. I ask her if there is a way to order something online if the store runs out of a product or doesn't carry it. She walks me over to a kiosk where I can order from Kmart.com. She says associates are trained to offer customers the option to order online if the store doesn't carry exactly what they want. I ask her how often this happens and she said it happened just a few hours earlier. A man wanted a patio furniture set the store didn't carry, so she helped him order it online at the kiosk.
After my trip I called Imran Jooma, executive vice president and president, online, marketing, pricing and financial services, for Sears Holdings. He told me half of Kmart's online sales come from cross-channel transactions where consumers either buy online and pickup in store or order in a store and ship to their home. Customers can take both those actions at all of Kmart's approximately 1,200 stores, he says.
"We have created a step-by-step training program, which includes hands-on demos that teach associates how to leverage our cross-channel capabilities," Jooma says. The training is required for all store associates, he says, and managers are instructed to reinforce the importance of integrated retail shopping options every day.
In addition to store marketing and employee training, Kmart promotes its store pickup service prominently on its e-commerce site and in print, circulars, targeted e-mails and digital marketing, Jooma says. And, a recently released humorous online video, "Ship My Pants" that highlights Kmart's ability to ship products to consumers' homes when they aren't in stores, went viral, garnering more than 17 million views on YouTube, spreading word of the service farther.
While still in the store I venture over to the appliances department. I come across a sign on a washer. "Make the smart choice," the sign encourages. "Protect your purchase beyond the manufacturer's warranty." It asks me to scan a QR code or text the word SMART to 88588 to learn more. I opt to text and await a response. I don't get one. I text again. Radio silence.
After my visit, I sent an image of the sign to Kmart's marketing team and they investigated. The sign, they report, was outdated and should not have been on display. Jooma says the chain works hard to make signage is up to date and suggests that this was an isolated case. Half of Kmart's online sales are picked up at a store or ordered in one.
Kmart takeaway – Kmart gets it right by making it clear via knowledgeable employees and store signs that it offers services such as MyGofer and by training employees to help shoppers order from Kmart.com if an item isn't available in a store. But it misses the mark on mobile. Kmart took the first step by prompting shoppers to use their mobile devices to get more information, but it failed to follow through. "Mobile offers the opportunity for retailers to really hit a home run on customer experience," says Larry Freed, president and CEO of ForeSee. "But you've got to be smart about promoting that brand experience." That, of course, means making sure it works.
I next trek across the parking lot to visit my local Staples. The web retailing behemoth sold $10.3 billion online last year, helping it secure the No. 2 spot in the 2013 Internet Retailer Top 500 Guide, which ranks retailers by their web sales. I wanted to see how easy it was for a shopper to complete one of those web sales in a store.
As I approach the store, I see a sign that illustrates Staples' omnichannel strategy: "Save time and reserve online. Pick up your items in store." I've actually used this service to purchase some hard-to-find, odd-sized envelopes and it worked smoothly and easily.
I mosey over to the checkout counter where I eye a payment card terminal featuring an enticing offer: If I download the Staples app and check into the store I can get coupons! I download the app, using the store's prominently advertised Wi-Fi network. It works smoothly.
I check in, and receive a coupon for a free ream of Staples multipurpose paper with a store purchase of $40 or more. A tap of a Redeem Now button within the digital coupon brings up a 16-digit code with instructions to provide the code to the cashier before my purchase is totaled.
I approach a friendly associate and ask if he can help me order something online that is not in the store. He brings me to a kiosk where I can order a wide variety of goods from Staples.com that I didn't know the office products retailer even sold, such as medical supplies, including IV racks. There are a lot more products online than in the store, the associate explains, noting that the laundromat next door recently used the kiosk to order garment bags. He estimates shoppers use the kiosk to place an order at least three times a day. A Staples spokesman later told me it recently incorporated specific information on using store kiosks into its employee training programs.
In research prior to my field reporting, I noted that Staples stores also will match local competitors' prices, as well as those on Staples.com, if a shopper requests it. The retailer introduced the policy in 2000, a spokesman says.
The associate says that while most Staples products sell for the same price online as in stores, it is store policy to give the shopper the better price if there is a difference. A customer can request a price match by pulling up the online price on her smartphone or at a store kiosk and show it to an associate, or bring a local competitor's coupon or flyer. Checking in at a Staples store via the retailer's app enables a shopper to procure a coupon.
Staples takeaway – Staples gets high marks for promoting its online reservation service, training employees to help consumers find products online, offering Wi-Fi in stores and for its easy-to-use mobile app that offers store coupons.
Prices may typically be similar or the same at Staples.com and a Staples store. But not so at Target, I quickly realize on my next shopping trip. Prices often vary, sometimes greatly, between Target.com and a Target store. However, Target makes clear it will give the astute shopper the lower price.
Target in January announced it would make its temporary holiday price matching policy permanent. The offer, which originally ran from Nov. 1 to Dec. 16, guarantees consumers that Target stores will match prices on qualifying items sold at Amazon.com, BestBuy.com, Walmart.com and ToysRUs.com—including BabiesRUs.com—and Target.com. Shoppers also can seek a refund of the price difference if they find a lower price in a Target circular, a local competitor's printed ad or on those e-commerce sites within seven days of buying the item at a Target store.
As I enter a shiny new Target I immediately see dozens of large signs looming at the end of shopping aisles advertising "Target's Price Match Guarantee." "Shop with confidence," they read. "We'll match the price in store if you find the identical item at a local competitor, select online retailer or Target.com." I approach the Guest Services desk and ask about the policy. A clerk says she matched the online prices on two items sold that day—one at Amazon.com, one at Target.com. "We match prices on Amazon all the time," she says. She shows me how she uses an iPad to check online prices if a shopper requests a price match.
Target outfitted customer service desks chain-wide with iPads when it made the price-match policy permanent, a Target spokesman later told me. To ensure associates can easily get online with the iPads, Target last fall equipped all its stores with Wi-Fi.
I head over to Electronics, flag down an associate and continue my questioning. "Do prices often differ on Target.com and in Target stores?" Yes, she says, giving me a play by play of a recent price match on a television selling on Target.com for between $300 and $400 that was priced between $600 and $700 in stores.
However, the clerk was not able to complete the price match right there in Electronics, nor at checkout. Target's policy requires customers request price matches at Guest Services. I then ask the associate if she is trained to help shoppers order products from Target.com if the store doesn't carry them or they are out of stock. She says yes, and notes how she helped many shoppers buy televisions on Target.com that were out of stock in the weeks leading up to the Super Bowl.
Target takeaway – Freed says it is not unusual for retail chains to vary store prices by market, and set their online prices to compete with other e-retailers. I saw that firsthand in my trip. And Target is not alone. Speaking with Internet Retailer earlier this year, Neil Ashe, president and CEO of Walmart Global eCommerce, a unit of Wal-Mart Stores Inc., said prices on Walmart.com are based on competing against other online retailers. Stores compete against rivals in each local market. If a customer complains about a lower price at Walmart.com than in a Wal-Mart store, the manager has the power to make the customer happy, presumably by matching the Walmart.com price.
Target's size allows it to source products at low prices, likely similar to the prices Amazon.com pays, which means it can heavily promote its price-matching policy, says Leslie Hand, research director for market research and advisory firm IDC Retail Insights. (Target is the fifth-largest U.S. retailer by global sales; Amazon is eighth.) "As long as they don't wind up selling goods below cost, this method may work for them," she says.
While Target is making progress, it falls short on delivering on the omnichannel promise by requiring customers visit a service desk to have a price matched. After my visit, I asked Target why this is. The spokesman says for now it only has outfitted Guest Services with the iPads necessary to validate online pricing. He says the retailer doesn't want consumers with price-match requests to hold up the checkout lines.
My final trip of the day is to drugstore chain Walgreens, where I've seen employees wearing T-shirts reading: "Download our app." The shirts list Walgreens' app features, such as access to mobile coupons and weekly ads. Do consumers use the app in stores? Are there other omnichannel initiatives in stores? I wanted to know.
Strolling the aisles, the first web-to-store connection I notice is a large sign reading "Web Pick Up." I ask an employee how often consumers order online and pickup in store. Only about once or twice a week, she estimates. Walgreens launched in-store pickup of online orders in April 2011. It is now available in more than 800 stores in the Chicago, Indianapolis, New York and San Francisco metro areas. That's about 10% of Walgreens' locations.
The retailer says shoppers who frequent stores and Walgreens.com and use the retailer's mobile apps are three times more profitable than those who shop in one channel, and says that it will be extending the program to more locations.
Next I notice an advertisement for Walgreens' mobile app on the payment terminal at checkout—it features a similar bulleted list that appears on the aforementioned T-shirt. It encourages shoppers to download the app right then by scanning a QR code with their smartphone; the app messaging has appeared on terminals since June 2012.
I ask an employee if anyone does this, and she says she has never seen it happen. Walgreens won't reveal the number of downloads the app has or how many active users the app has, but the Android app has accumulated nearly 23,000 reviews, while the iPhone app has more than 55,000 reviews of all its iterations.
I believe the associate in regard to scanning to download, as the checkout line is long and I would be irked if the customer in front of me held up the line to download an app. However, she notes that many shoppers store their Walgreens loyalty program membership information on their smartphones and use the mobile version of the membership card at checkout. Consumers can order online and pickup their goods at more than 800 Walgreens stores.
Walgreens takeaway – While I didn't see consumers using or downloading the mobile app in the store, it doesn't hurt to promote it, Freed says. "You can look at mobile web use in stores as a threat or an opportunity," Freed says. "If I was a retailer I'd much rather have a shopper using my app over a competitor's." If a shopper has a reason to bring up the Walgreens app for coupons, reviews or other helpful shopping tools, it can improve her shopping experience and ward off showrooming, he says.
Final takeaway – I was impressed with the steps retailers are taking to help consumers shop across channels and according to consumers' preferences. They are training frontline employees to assist and are clearly promoting shopping options with in-store messaging, improved in-store pickup options and informative mobile apps. There are kinks that retailers will likely be working out for the next few years, but merchants are improving. And progress is always a good thing.