Welcome to The Grocery Trader’s Omnichannel Retailing feature. ‘Omni’ is transforming the retail universe, including grocery. In case you’ve managed to miss it, here’s a lighthearted look at the ‘Genesis’ of the phenomenon changing our lives, and where we are.
In the beginning was the shop. And then there was the Big Shop, offering all the products consumers could desire, as long as the shops were open. But then there came the Internet. And after that came the smartphone. And the retailers and their IT partners said, “Let there be shopping by all these channels. So the people can shop on the Internet whenever they want, wherever they are, any time night or day.” And the consumers saw it, and said it was good.
But just how good a state is Omnichannel in now? In 2011, ten years after the dot-com revolution, Darrell Rigby from Bain & Co. wrote in the Harvard Business Review that many traditional retailers were “lagging in their embrace of digital technologies.” He argued that to survive, they must pursue a strategy of omnichannel retailing, which he defined as “an integrated sales experience that melds the advantages of physical stores with the information-rich experience of online shopping.”
In Darrell’s view, still valid now, retailers faced challenges in reaching this goal. As he saw it, many traditional retailers weren?t technology-savvy. Few were adept at test-and-learn methodologies. He reckoned they would need to recruit new kinds of talent.
The other major point as Darrell saw it, was that the traditional retailers also needed to transform the one big feature that pure internet retailers lacked – physical stores – from a liability into an asset. They must turn shopping into an entertaining, exciting, and emotionally engaging experience. In the grocery retail sector the tail – the stores – wags the dog, ie the major multiples’ omnichannel offering. Home shopping means you don’t have to get in the car to buy everything, but it has its limitations.
Mintel’s 2014 Online Grocery Retailing report shows 20% of adults now do all or most of their grocery shopping online – confirming the UK’s leadership in online grocery retailing in Europe. Yet less than 5% of the total food retailers’ sector sales are online, so online shoppers underindex in value sales. It’s up for debate how much this is linked to the poor customer experience many shoppers have when buying non-food items like consumer electronics online from supermarkets, and what retailers can do about it.