Why Omnichannel is Critically Important to Wireless Retailers Omnichannel is... · Why Omnichannel...

Why Omnichannel is Critically Important to Wireless RetailersHow wireless retailers should approach their digital and physical connections with shoppers

An industry whitepaper

iQmetrix | Omnichannel for Wireless Retailers

OMNICHANNEL RETAILING has been a pervasive topic of discussion across the spectrum of retail formats, like department stores, discount stores and specialty retailers, for the past decade. As e-commerce and digital technologies have asserted their influence on retail, operators became convinced of the need to create seamless shopping experiences for their customers, no matter where those experiences originated or were fulfilled.

One of the important lessons that retailers have learned along the way is that each purchasing channel — whether website, mobile, catalog, streaming, social or in-store — holds a unique and distinctive place in the fabric of their shoppers’ lives. That means the way Macy’s pursues omnichannel is likely to be quite different from the approaches at Home Depot or Best Buy.

Ultimately, the choices belong to the shoppers, not to business owners. Shoppers will move through their purchase journeys in the manners of their choosing, and it’s up to retailers in each category of goods to anticipate, recognize and respond to their preferences, which may change at each moment of interaction.

For wireless retailers, the nature of the purchase occasion, shopper mindset and marketplace structure present distinct differences from the mainstream when it comes to implementing omnichannel.

And so it’s important to ask how today’s wireless retailers, in particular, can make the most of the omnichannel opportunity.

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Each purchasing channel

holds a unique and

distinctive place in the fabric

of their shoppers’ lives.

Omnichannel’s origins

Retailers have been working to incorporate digital selling techniques for nearly two decades. During the late 1990s, an online store was a tactical defense against so-called “pure play” online retailers like Amazon.com, CDNow and Pets.com. High-profile early efforts by chains such as JCPenney, Office Depot and Eddie Bauer were described as “multichannel,” meaning the physical and digital (and sometimes catalog) channels were run separately and not operationally linked.

Multichannel retailers very soon confronted the difficulties inherent with separate-but-parallel selling environments. A primary challenge is to maintain brand consistency across multiple touchpoints. Consistency of assortments and online price visibility also presented challenges.

Retailers also faced a number of operational issues. One sticking point was how to fairly account for an item sold online but returned to a physical store. A related challenge was keeping accurate tabs on inventory across multiple store and fulfillment center locations.

As retailers faced down these issues, they recognized that presenting a seamless, connected experience to shoppers across multiple points of interaction was a paramount requirement. Even in those early days, multichannel shoppers were recognized as being higher in total value compared with single-channel shoppers. Keeping these best customers satisfied and coming back became a high priority.

The term “omnichannel” appeared in the late 2000s as thought leaders sought a way to distinguish this more consistent, shopper-centric approach to retailing from the early disconnected multichannel approaches.

To better cultivate their relationships with omnichannel shoppers, retailers by necessity learned to focus on operational competency — inventory availability and visibility across physical, digital and mobile touchpoints being of paramount importance. As consumers became fonder of overnight delivery, buy-online-pickup-instore (BOPIS) and buy-anywhere-return-anywhere services, operators were challenged to put an even sharper edge on their processes.


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“In multichannel they’re just

offering customers a selection

of channels to choose between.

In omnichannel, a retailer is

working toward a 360-degree

view of its customers’

purchases across all channels.”

– Bill Davis in a 2013 interview 1

Omnichannel’s present impact

Retailers of all stripes are now doing their best to live up to shopper expectations that are being shaped by service standards established in the digital sector. Free and overnight delivery, store pickup options, “long-tail” or “endless aisle” product assortments, detailed product descriptions, convenient returns and rock-bottom prices have become, not points of differentiation, but requirements s to compete.

Cross-device shopping has become a norm for many consumers, resulting in multi-touch journeys that may begin with a search engine or social media post, then lead to online price research and one or more store visits. Very few high-consideration purchases begin and end on the same store visit, and retailers have become grudgingly accustomed to “showrooming” behavior, in which a shopper visits a store to inspect a potential purchase, then orders the item from a cheaper online source.

For these reasons, it can be difficult to separate a store purchase from a digital one when understanding shopper behavior. In their 2017 State of Retailing Online report, the National Retail Federation and Forrester Research found that, while digital (online and mobile) sales grabbed about 11 percent of all U.S. retail purchase dollars last year, digital touchpoints had an impact on more than one third of all retail sales, or more than $1 trillion.


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Conversely, e-commerce sales are influenced by store experiences as well. “Stores are no longer just a selling space, they’re also the warehouse, billboard and training center for the next generation of consumers,” says a 2017 report from SapientRazorfish and Salesforce. “Our research shows that in-store activity generates nearly half of all e-commerce activity for leading retailers.”

A study of 46,000 shoppers published in the Harvard Business Review 2 spoke to the value of omnichannel shoppers.

“In addition to having bigger shopping baskets, Omnichannel shoppers were also more loyal,” the authors wrote. “Within six months after an Omnichannel shopping experience, these customers had logged 23% more repeat shopping trips to the retailer’s stores and were more likely to recommend the brand to family and friends than those who used a single channel.”

Faced with these realities, wireless retailers are taking steps to incorporate omnichannel methods into their ongoing quest to put shoppers at the forefront and remain competitive.


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“The more channels

customers use, the more

valuable they are.”– Harvard Business Review study

Where do wireless retailers stand?

With more than 120,000 outlets across North America, the wireless retail industry is comprised of diverse store formats and business models. The Tier-1 carriers who own their own networks — Verizon, Sprint, AT&T and T-Mobile — operate some 20,000 doors consisting of flagship, corporate-owned and branded “authorized dealers.” Tier-2 or “indirect” carriers, which lease network capacity —Boost Mobile, Virgin Mobile, Cricket, MetroPCS and many others — account for another 100,000+ locations.3

There are thousands of independents as well, and large chain retailers like Best Buy (1,026), Target (1,800), Walmart/Sams (5,000) and Costco (727) add thousands more indirect locations offering mobile devices.4

At many of the carrier flagship stores, such as Verizon and AT&T’s locations, as well as at the 360 Apple retail stores, omnichannel is a well-developed and evident business model, with fairly seamless integration between the digital and in-store shopping experiences, incorporating state of the art inventory management.

And yet the more numerous indirect wireless retailers are not on par with their carrier or brand counterparts when it comes to omnichannel implementation.


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Leveling the playing field, however, is not always a matter of will or knowhow:

• Some indirect wireless retailers have contractual restrictions on how they may market directly to their customer base after the purchase. For example, they may not be allowed to send an email campaign to all clients who are eligible for an upgrade.

• Some indirect wireless retailers are restricted from selling anything online at all. For the most part, though, selling accessories online is allowed, as is taking reservations for phones online to be later picked up in-store.

• Some carriers strictly prescribe what the in-store experience looks like at affiliated retail stores, so selling techniques like “endless aisle” interactive screens or brand kiosks can be difficult to implement.

• Canada’s anti-spam legislation (CASL) imposes rules on retailers as to how they may communicate to customers. Wireless (and all other) retailers are required to properly secure permissions from customers and provide straightforward “opt out” options.

Some wireless retailers maintain their connections with customers within the rules using opt-in SMS (text) messaging services. Offers and brand messages can be embedded within e-receipts or in email updates to customers about drop-shipped product delivery.

Within stores, Wi-Fi is nearly a universal feature. This is a convenience for shoppers but also an enabler for sales associates with tablets used to facilitate sales, show product information and order accessories from the “endless aisle” assortment. There are numerous installations of interactive kiosks deployed by specific hardware and accessory brands, as well as tablets mounted in displays.


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What traits of wireless customers should guide omnichannel priorities?

For most consumers, mobile devices — smartphones, tablets and accessories — fall into the high-consideration purchase category. Because device owners must also maintain a service account, wireless retail stores are geared for a more thoughtful, assisted purchase experience as compared with many other household purchases.

Wireless stores are a distinct form of retail environment for several reasons:

Mobile-first shoppers

Most shoppers own and use personal mobile devices these days for at least part of their shopping and purchasing activities, but only wireless dealers can be certain that is true for every customer who enters the store with the intent to upgrade or replace their phone. This means communications channels such as SMS text messaging or email can be particularly effective for maintaining contact between sales encounters.

High transaction values

List prices currently reach $800 - $1,000 for high-end smartphones, while the cumulative cost of a typical 2-year wireless contract with unlimited data can add another $2,000. This level of investment is a primary reason why mobile phones are “high-consideration” items as compared with many other routine purchases.


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Low repurchase frequency

A strong majority (72 percent) of mobile phone owners wait two years or longer before replacing their devices with newer models.5 After that much time, the consumer may need to go through a new high-consideration research and decision process because the features and costs have changed significantly since the last purchase decision. Very likely, even the sales associate who helped them the last time has moved on. From a customer relationship management (CRM) perspective, the wireless store may not have an institutional memory of the customer whatsoever.

Limited store assortment

Most wireless stores have a few dozen models of mobile devices on display, with stock kept securely in the back room. High-margin accessories such as protective cases, clip-on camera lenses, charging cables, and screen protectors come in many models and colors, but turn slowly. The merchandise investment and space limitations, of course, makes it impractical for stores to compete with the breadth and depth of inventory available online.

Complex sales encounter

Because smartphones are such high-consideration items involving high costs and complex options, sales associates understand they are usually in for lengthy service experiences. Associates typically address numerous questions and provide detailed explanations. Very often they also assist with activating the new device and loading it with personal data before the customer leaves the counter.


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What omnichannel features should wireless retailers offer?

If wireless retailers are a little different than other mainstream retail sectors, the fundamental goals of their omnichannel strategies are still quite similar. At the core, the objective is to deliver superior customer experiences inside and outside the store, with continuity of branding, merchandising and service standards at every point of contact along the path to purchase – website, mobile app, email and social media marketing, in-store kiosk and at the point of sale.

Messaging: The long repurchase cycle presents CRM challenges since smartphone customers may have little incentive to interact with the retail store between phone upgrades. That makes it desirable for stores to find opportunities to communicate with customers as a follow-up to purchases and in preparation for new purchases. Messaging should be as targeted and relevant as possible. The objective is to foster more intimate customer relationships, encouraging more repeat visits (digital and physical) and better customer retention.

Endless aisle: This technology — a natural feature of the digital store — can also be used to allow physical store shoppers to browse and select “long-tail” add-ons and accessories on a kiosk, screen or tablet in the showroom. Given the proper data integration, retailers can push selected products over to their POS solution, where they can be checked out on a single invoice at the same time as a smartphone purchase.

Drop-ship: For some add-on items that are difficult to inventory at the store level, the best service option may be drop-ship integration with vendors who can reliably deliver items to the customers’ homes or offices. Best practice would be to provide customers with accurate availability and delivery information, drawn from the retailer’s online inventory application.

Point of sale: Other sales enablement features are tied more closely to the POS system. These include appointment scheduling, order online for in-store pickup (great for urgently-needed replacement batteries or charging cables) and the ability to schedule and manage the pre-order queues for hot new phone releases.

Reporting: From an overall management vantage point, integrated omni-channel systems present a superior opportunity to get reporting and analytics that can guide key business decisions.


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Conclusion: Essential omnichannel benefits for wireless retailers

Wireless dealers certainly have some unique traits compared with mainstream retail. Price points are high and visit frequency is low. Meanwhile, their customers’ collective omnichannel experience across numerous other retail formats has primed them to expect high-quality, seamless interactions, marked by consistency across all touchpoints. The truth is, retailers only get one chance every couple of years to win a new sale from most customers. Meeting their expectations for high service standards is no longer an option.

For wireless dealers, the payoff comes in the form of reduced slippage between the initial — often digital — shopping encounter and the final sale. It can help bring in more higher-margin add-on accessory sales while encouraging increased visit frequency and better customer retention.

In a retail sector that is subject to rapid, even radical, change, wireless retailers will win by providing digital and in-store experiences that are every bit as sophisticated as the smartphones themselves.


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Wireless retailers may get

only one chance every two

years to win a major sale

from a customer.

IQMETRIX Contact:

www.iQmetrix.com

[email protected]

1-866-iQmetrix (1-866-476-3874)

Resources from iQmetrix:

Omnichannel solutions

POS & retail management solutions

Demo requests

About iQmetrix

Founded by wireless retailers, iQmetrix is the leading provider of innovative software solutions for the wireless market. With platform-built, metrics-driven products from POS and full-suite retail management software, to endless aisle, drop ship, e-commerce, and digital signage, iQmetrix has taken its unique understanding of the pain points in the industry to create better experiences for wireless retailers and their customers. Currently powering over 19,000 wireless locations, iQmetrix is a software as a service (SaaS) company with offices in Canada and the U.S.

1 Bill Davis, quoted in BrickMeetsClick.com, “Defining omnichannel retail” (9/16/2013)

2 Emma Sopadjieva, Utpal M. Dholakia and Beth Benjamin, “A Study of 46,000 Shoppers Shows That Omnichannel Retailing Works” – Harvard Business Review (2017)

3 iQmetrix internal sales data and company web sites.

4 Company web sites.

5 “Smartphone Owners Wait Years to Replace Handsets” – eMarketer (6/29/2016)

© 2017 iQmetrix


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