Track sponsored by Are Retailers Omnichannel Ready? Bill Hardgrave - - PowerPoint PPT Presentation

Track sponsored by

Are Retailers Omnichannel Ready?

Bill Hardgrave Auburn University

Are Retailers Omnichannel Ready?

Are Retailers Omnichannel Ready?

Are Retailers Omnichannel Ready?

Almost 80% of retailers believe they are “omnichannel ready”

Are Retailers Omnichannel Ready?

The Omnichannel house

Inventory Accuracy

Retailer claim: 99% inventory accuracy

Reality: 990 out of 1000 items in a category

Omnichannel Ready?

PI=actual PI<actual PI>actual Frozen Home 31% 21% 48% 25% Floor care 39% 33% 28% 9% Small appl. 31% 20% 49% 17% Electronics 39% 13% 48% 30% Boys wear 61% 18% 21% 8%

Reported IA: 87%

Inventory Accuracy

• Must blend the two channels into one

seamless channel – completely invisible to the consumer

Seamless Customer Experience

Test of Seamlessness

• Logged on off-site via laptop
• Made a purchase (shipped to home)
• Made a purchase (pick up in store)
• Searched for several items
• Opened app
• Searched for several items; no recognition of above
• Went to the store; used store WiFi
• Picked up items; browsed in store for items browsed on-line
• Result: Store did not associate my online presence with my in-store

presence

Retailer claim: SfS pick rate of 100% Reality: Items only go on pick list if more than 8 in

stock

Omnichannel Ready?

• 35-65% pick rate issues
• One retailer: 80% pick declines
• 43% at least tried SfS last year
• Potential: national retailer reducing sales floor space

and using for mini-fulfillment center

SfS

Retailer claim: 99% BOPIS fulfillment

Reality: Filling 99% of orders not canceled by customer Reality: 70% of BOPIS orders in one category cancelled due to short search window; customers were given

• ption to ‘cancel’ order (but: 40% attachment for

those that are successful)

Omnichannel Ready?

• Great potential!
• More than 60% offer BOPIS
• 60% of Lowe’s online orders are BOPIS
• 43% of Home Depot’s online orders are BOPIS
• 67% of surveyed consumers indicated using

BOPIS at least once in past 6 months

• 75% of BOPIS users bought something else

BOPIS

• “Hidden” use (ROBIS) – 74% check before going to

store

• For one retailer:
• 28% BOPIS customers made unplanned purchases
• >$18M on ~2M transactions

BOPIS

• But …
• 17% of retail apps display in-store quantities
• 31% of customers describe BOPIS as smooth

process

• 24% of BOPIS orders not ready, despite message
• therwise
• 67% of BOPIS customers had a bad experience of

some type

BOPIS

Test of BOPIS

• While in store (without using store app or store WiFi)
• Randomly select items from at least 5 categories
• Go to website via mobile device
• Check availability of items shown online against actual shelf quantity
• Initiate BOPIS order: How many? When?

Test of BOPIS

• What can be considered BOPIS?
• Pick up in 1 hour?
• Pick up in 4 hours?
• Pick up next day?
• Pick up in XX days?

Departments Sampled

Test of BOPIS: Examples

• Electronics:
• 3 on shelf; 3 available for pickup in 4 days
• Toys:
• 7 on shelf; 7 available for pickup in 2 days
• Automotive:
• 10 on shelf; 10 available for pickup the next day
• 2 on shelf; only 1 available for pickup in 2 days
• Wiper blades: ‘pair’ – both with 5+ on shelf; one available for pickup

today; one available for pickup in 4 days.

• Office supplies:
• 7 on shelf; not available for pickup

Test of BOPIS: Examples

• Tools:
• 2 on shelf; website shows 17 in stock; 2 allowed for pickup
• Garden:
• 4 on shelf; website shows 15 in stock; 4 allowed for pickup
• 4 on shelf; website shows 2 in stock; 2 allowed for pickup
• Bath:
• 4 on shelf; website shows 4 in stock; 4 allowed for pickup

Test of BOPIS: Examples

• Housewares:
• 4 on shelf; not available for pickup
• 4 on shelf; 4 available for pickup
• 4 on shelf; 3 available for pickup
• Shoes/apparel:
• 1 on shelf; ‘only 26 available for purchase’; only 1 available for pickup
• 2 on shelf; ‘not available for store pickup’

Test of BOPIS: Examples

• Electronics:
• 2 on shelf; ‘only 1 left’; 1 available for pickup
• 2 on shelf; not available for pickup
• Kitchen:
• 5 on shelf; ‘only 1 left’; 1 available for pickup

Test of BOPIS: Examples

• Books:
• 1 on shelf; ‘call store to reserve’
• 3 on shelf; ‘quantity 2’
• 2 on shelf; ‘out of stock at this store’
• 2 on shelf; ‘limited quantity’

Test of BOPIS: Examples

• Apparel:
• 5 on shelf; ‘unavailable at this location’
• 4 on shelf; ‘1 left’
• 3 on shelf; ‘out of stock’
• 9 on shelf; does not appear on website

Test of BOPIS: Examples

• Will not show quantity at store until you add it to cart, then

will let you know whether or not store has it

• Will not show a store until you select the quantity and place

into cart; then will show store that has it

Test of BOPIS: Examples

• One retailer allows you to order anything for BOPIS, but then

cancel it if they can’t fill it, rather than checking/trusting inventory count to keep you from ordering.

BOPIS Performance

Retailer Accurate Unavailable More on shelf Less on shelf A 0% 60% 32% 8% B-1 4% 84% 0% 12% C-1 8% 60% 4% 28% D 8% 0% 92% 0% E 8% 48% 4% 40% F 12% 24% 40% 24% G-2 16% 8% 28% 48% H-2 16% 0% 36% 48% I 16% 48% 24% 12% J 24% 24% 52% 0% K 28% 20% 36% 16% L 40% 8% 40% 12% M 44% 4% 32% 20% N 60% 36% 4% 0% O 80% 0% 8% 12% P-1 84% 4% 12% 0%

Test of BOPIS: Observations

• Hedging: waiting to check; delaying the pickup
• No clue: no pattern of under or over
• Faux BOPIS
• Hiding inventory: setting high thresholds

0% 25% 50% 75% 100% SKUs

> 2 units > 2 units

Hiding Inventory

0% 25% 50% 75% 100% SKUs

> 1 unit > 1 unit

Hiding Inventory

0% 25% 50% 75% 100% SKUs

> 0 units 1 unit

Hiding Inventory

> 0 units Individual Stores

Hiding Inventory

• To deliver a great customer experience, retailers must

be fundamentally sound

• It starts with inventory accuracy
• 81% of retailers indicate inventory accuracy is an obstacle to
• mnichannel

Customer Experience

Inventory Accuracy Inventory Sales Customer satisfaction Replenish- ment Product availability Forecast

Inventory Accuracy: Traditional

Inventory Accuracy Inventory Sales Customer satisfaction Replenish- ment Product availability Forecast Expose inventory BOPIS/ ROBIS Search Unplanned purchases Ship from Store

Inventory Accuracy: Omnichannel

Omnichannel Ready?

• Retailers struggle with providing the simplest of the
• mnichannel capabilities: BOPIS
• Only 1 retailer among those we tested would be

considered BOPIS capable

Thank you

Track sponsored by