OMNICHANNEL RETAILING / CROSS CHANNEL RETAILING

What is Omnichannel retailing , to understand this we need to first understand the various channels in retail industry :
1. Brick and Mortar stores (BNM)
2. E-Commerce
3. Catalogue Stores


1. BRICK and MORTAR STORES

These are the regular retail stores where we walk in, pick our products, bill them and leave. Though they are customer friendly, it is becoming more and more expensive for retailers to maintain physical stores in today's retail environment. With retailers working on wafer thin margins in grocery and FMCG, it is getting difficult to maintain profits by running a physical store. Moreover brick and mortar stores have high overheads such as Monthly Bills, Repair and maintenance, store sales staffs, management staffs, housekeeping and security expenses, rentals, CAM charges, etc. To dilute the expenses, retailers have moved on to open bigger Hypermarkets and reduce the number of departmental and supermarkets in their chains. Exclusive brand outlets are fading off and multi-brand outlets are gaining popularity in value retailing. In this growing trend small retailers and entrepreneurs find it difficult to penetrate the market and fight alongside with big time retailers. This is also one of the main reasons FDI in Multi Brand Retailing is opposed in India. Types of Brick and Mortar stores are :
- Chain Stores
- Department Stores
- Category Killers
- Store on Wheels
- Dark Store


2. E-COMMERCE

The latest mantra of every retailer. Reduced operating expense, better offers for customers, more number of products to offer, etc, are the benefits of E-commerce retailing. The best example is FLIPKART, which started of an online book store with a total face value of just 4,00,000 and has grown into a muti billion dollar company over a short time span of less than 10 years
(60.8 billion in revenue for FY 2013-14)
Flipkart is an e-commerce company founded in 2007, by Sachin and Binny Bansal. It is registered in Singapore, and owned by a Singapore-based holding company;. It operates in India, where it is headquartered in Bangalore, Karnataka (Credits : Wikipedia)
Online stores also offers customers a wide range of products, one stop shopping and home delivery options. Competition in Online retailing has further pushed the online retailers to offer various modes of payment from online payments to cash of Delivery. E-commerce is also helping the customers to save time in today's fast paced life. A few online retailers have taken the technology to new levels, one such retailer is RAYBAN who offers customer to try their sunglasses in a virtual environment.
You can try it if you haven't through the below link :


RAYBAN VIRTUAL MIRROR : http://www.ray-ban.com/usa/virtual-mirror

3. CATALOG STORES

Catalog stores , also known as catalog merchant. In this case the merchant sells his product to his customer through catalogues. Once the customer fianlises his/her selection then the merchant picks the product from the back warehouse and bills it for the customer. This is cost effective but with Online stores gaining market, catalog stores are fading off.


OMNICHANNEL RETAILING

Now that we have understood the above channels of retailing, we can proceed to Omnichannel Retailing. Omnichannel was preceded by multichannel retailing where in the retailer had presence in both Brick and Mortar and in E-commerce channel of retailing. Slowly multichannel retailing gave way for Omnichannel retailing where in retailers have one database serving all their products to both the customers online and offline. Customers can surf online and buy from a BNM store or see the physical product in a BNM store and buy online. This has also taken shopping experience to a all new level where in when a particular product is out of stock in a BNM store, sales staff can assist customer purchasing the product online and pay for the same at the BNM store or take a cash of delivery. Omnichannel retailing has picked pace and will be the future of retail industry. In near future, retailers will have fewer stores, either exclusive or cash and carry format stores and the rest will be Hubs spread across geographic locations for distribution of products purchased online. Customer loyalty programs will play a big part is retaining customers, we will discuss the same in my future blog. BNM and E-Commerce are closely interlinked in this format and with mobile technology revolutionising the way we browse, retailers are releasing apps in various platforms of mobile OS.
Thus making their presence in Mobile, social media and PCs through E-commerce and through BNM stores in tangible format for customers to choose from. Pricing strategy and category mix is usually maintained the same across all platforms thereby ensuring hassle free shopping for customers.
Dark Stores also known as dotcom centre, these are retail outlets or distribution centres that caters exclusively for online shoppers of that particular retailer. Its a large warehouse that can either be used to facilitate a "click-and-collect" service whereby a customer collects an item they have ordered online, or as an order fulfilment platform for online sales.
There is a new format of retailing which is also gaining popularity which is CLICK and COLLECT stores. Click and Collect model enables the patrons to avail a personalised, one-to-one service and experience the brand first hand. Unlike the conventional retail shops, these stores are also equipped with iPads that give access to the online portal as well aid the customers to place an order instantly in case of non-availability of a product. These facilities are transforming the whole process of purchasing products into a gen-next experience.
LENSKART , an Indian Eye-wear retailer has introduced this format of retailing in India recently


Happy Shopping :)