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Are You Truly Omnichannel?

There Are Many Retailers That Still Don’t Grasp the Omnichannel Concept, or Worse: They Treat Their Channels as Individual Businesses.

Peter Messana's headshoot
By Peter Messana - CEO

The pandemic pushed companies to accelerate their online channels and whether it is shipped to door, curbside, or buy-online-pickup in-store (BOPIS). The shift still isn’t understood by the larger retailers that seemingly forget that you can check prices on your phone while in the store and who run each channel on their own profit-loss.

Back 5-10 years Best Buy suffered from the ‘showrooming’ effect where people would shop their store, pull out their phones, and buy on Amazon for a cheaper price. They took a little time to react but addressed it correctly and matched Amazon and removed arduous price matching rules.

Fast forward to today. There are many retailers that still don’t grasp this concept and worse, they treat their channels as individual businesses. They aren’t truly omnichannel. Over the past two months, I have encountered some bizarre situations that aren’t necessary and are actually more costly. I suppose this is a short lesson on what not to do should you be running an omnichannel retailer.

The first one is bizarre pricing where the retailer’s online price is less than the in-store price. On the surface, this assumes the customer isn’t shopping online and in the store. Imagine the person that didn’t check the retailer’s website and bought dog food for $7 more than if they had it shipped to their house. From a profitability standpoint, it definitely doesn’t make sense as I don’t need the BOPIS labor. I am the order picker and I am entering the store one way or another. It is likely the physical store and allocation of expenses with a requirement to be profitable as an individual store, forgetting the internet exists. They gladly will price match their own site (gee, thanks).

The second encounter I had was similar to the dog food, but it was for a pair of Apple AirPods. Online had a promotion for $20 off. In-store it was full price. This was a ‘special promotion’ so it may not be the retailer’s own fault and could be co-op marketing dollars. However, where this broke down is that to get a price match they needed a store manager, the department manager wasn’t authorized. This caused me to wait 25 minutes, not to mention the amount of store labor wasted.

The last example was a coupon emailed to me for $15 off any purchase over $60. There was no mention of in-store only, so I went to the store to find out it was online only. The store couldn’t override but I could place an online order for pickup and get the discount. From a profitability standpoint, this is crazy. If there is BOPIS, the promotion should work across all channels. Why make me stand in a store placing an order?

The truth is that the customer is going to get the price they want, one way or another. Adding friction will just alienate customers and the short-term profit boost will never pay for the harm done to loyal customers who catch the wildly different pricing. It is time to look at the whole P&L and not just the channel P&L. Your customers aren’t just hanging out in one channel, they are traversing.