The shopping experience is being redefined and reimagined through an e-revolution. The semantics of shopping are changing to give way to a more exciting, precise, and customized experience. Phones and tablets are the new “stores” allowing you to shop anytime, anywhere. Grocery shopping no longer means going through endless aisles as your app can now guide you to reach the specific item or have it delivered to your home. Buying clothes off the rack will become a thing of the past as store scanner booths can take micro-measurements to tailor customized shirts. The online “window” shopping experience is far more exciting and convenient as all recommendations are based on your shopping habits, preferences, and existing wardrobe. The traditional store may soon become a thing of the past!
The “omni-channel” approach
Imagine customers who are always “switched on” – crafting their own shopping experiences. They scour the internet for the best deal and are willing to engage on any platform that offers it. This is where the omni-channel approach comes into play. In the traditional multi-channel approach, each sales channel offers a one-size-fits-all experience. This is no longer feasible.
The shopping experience is no longer linear. Shoppers shuffle between physical stores, online stores, mobile devices, and social media with ease. The onus is on companies to ensure products are available, to be informative, and to be ready to complete sales through any of these platforms. This allows customers to connect with businesses through their preferred platform and will result in an increased customer base and loyalty. A seamless transition between the virtual and physical worlds defines the omni-channel approach. Businesses will have to adopt this model to stay competitive.
Implications for logistics
The blurring of boundaries between the online and physical spheres requires a new approach to logistics. For a customer to choose when, where, and how their products are delivered to them, careful inventory management and speedy delivery become essential elements of the shopping experience. Returns and payment methods also need to offer consumers a similar level of flexibility.
Logistics is moving away from being a back-end function to engaging more with consumers directly and in real-time to meet their expectations.
Traditionally, the logistics network and service promise was defined by channel. This is now being replaced by networks that can serve all channels; fulfillment location being picked optimally from across the network based on consumer preference and inventory availability across the extended supply chain. In fact, the channels and physical assets such as warehouses and stores are collaborating to play a complementary role in order fulfillment. Predictive logistics technologies can go even further by helping to locate products close to customers, ensuring speedy and cost-effective fulfillment. Consumers flexibility is further enhanced with a number of convenient delivery options being made available from parcel boxes to car trunks. Logistics is moving away from being a back-end function to engaging more with consumers directly and in real-time to meet their expectations.
Making the switch
In our latest trend report, “Omni-Channel Logistics”, we outline a number of case studies on businesses adopting the omni-channel approach. Tesco is an exciting example that is redefining day-to-day shopping. It lets customers create a shopping list online before coming in to the store. Once they enter the physical store an app directs the user to each item on their list.
In 2012, Audi opened a digital car showroom that offers consumers a shopping experience that combines the best of the online and digital worlds. In a regular showroom, instead of being flanked by dozens of cars, shoppers can now browse every possible combination across Audi’s entire model range and view a full-sized digital projection of the car in front of them.
So will businesses adopt the omni-channel model? Omni-channel innovation requires investment, patience, and forward thinking. Businesses may not have much choice. Those that stay stagnant shall find themselves obsolete. Our report highlights that by 2019 the number of smartphone in use is expected to reach 5.6 billion, up from 1.6 billion in 2013. This suggests that 90 percent of global consumers will potentially be online, connected, and looking for innovative ways to get what they want.
Is this bad news for small/local retailers who can’t invest in omni-channel? Not necessary if city and logistics organizations can work together as in the example of the Online City Wuppertal project explained in the report.
Omni-channel is here to stay. Logistics companies have to innovate to facilitate this evolution. The DHL trend report is intended to kick-start the process.