For retailers, the months between October and December are by far their busiest time of year, so it can be expected that all of their time and energy goes into executing a successful holiday season, right? Wrong! In addition to laying a strong foundation for Holiday Readiness, executives and decision-makers must simultaneously look forward to their 2016 strategic planning. For many, this plan includes expanding and enhancing omnichannel operations.
Omnichannel and Store of the Future
The discussion regarding the importance of omnichannel retailing has dominated the industry for the last five years, and this year is no different. But, before we delve further into this topic, we want to clarify the differences between Multichannel, Crosschannel and Omnichannel operations. These terms are often used so interchangeably that even those of us working in the industry get confused!
Multichannel: multiple channels to engage customers and to purchase products, including brick-and-mortar stores, websites, call centers and catalogs
Crosschannel: a combination of different channels for the same purpose, such as purchase at home and pickup in a store
Omnichannel: multiple channels to engage customers AND provide consistent experience
- Example: Start shopping online, continue on mobile, checkout in the store based on previously selected products. Pay online and have it shipped to the house
The fact of the matter is that consumers today aren’t just shopping for a product; they’re looking for an experience. Competitive pricing is no longer enough to keep customers coming back; ultimately, what will prompt them to choose your store over another will be the quality of their experience and the flexibility of their choices. Omnichannel retailing shows a 90%+ higher year-over-year rate for customer retention, and a 3%+ increase in customer lifetime value.
In order to execute this strategy successfully, retailers must have a Point of Sale (POS) system that allows customers to take full advantage of this flexible shopping experience. In considering a new POS system, the two most common questions are:
- Our existing system meets most of the business requirements — is the ROI for the new system significant enough?
- Large system change carries a significant risk and time commitment — will this be a distraction from direct revenue generating activities?
- Will merging sales channels negatively affect margins or brand recognition?
While all of these concerns are certainly valid, our experience is that the benefits of a new, more robust POS system far outweigh the drawbacks. Some of the pros include, but are not limited to:
- Increased consistency across experience, aesthetics and data integrity
- Mobile and self-mobile checkout
- PCI Compliance and EMV Compliance (Oct 1st deadline has passed)
- Advanced security and encryption for customer data protection
- Customer identification and guided shopping
- Usage efficiency and overall reduction of routing
- Improved integration capabilities with Software as a Service (SaaS) offerings:
- Traffic data
- BI, advanced analytics and loss prevention
- Loyalty programs
- Workforce and task management
- Special orders
- Promotions and discounts engine
- Multi-language and multi-currency support
- Updated/supported OS, database and equipment versions
But, in a saturated market, which POS system is best?
The Forrester Wave published a report in July of this year analyzing 10 different POS systems to determine which systems truly offered the most robust qualities and capabilities for both retailers and their customers. They weighed the individual components of each system and gave them an overall score for both their strength of current offering and their future strategy. The report found that, while all 10 systems* held up fairly well in each respective category, clear winners emerged within the Omnichannel space:
Leaders (with eCommerce integration): Aptos, Demandware, Fujitsu, NCR, and PCMS
Competitive: Microsoft Dynamics, Oracle, SAP, and Wincor Nixdorf
Based on this information, it’s clear that retailers have several strong options available for improving their omnichannel presence in 2016. Investing in a new POS system will improve the way your customers shop, whether it be in a brick-and-mortar store or on their phone, and we urge you to make this a critical initiative in your 2016 Strategy. New POS systems focus not on the “Sale”, as their name implies, but on the “Service”, helping retailers to offer a consistently superior experience across all platforms. Instead of logistical concerns dominating and shaping the purchase process, the customers themselves determine their shopping experience. Omnichannel retailing gives shoppers the freedom of choice; the right “Point of Service” system provides the experience that makes them choose you.
*Watch out for the new kid on Retail block: Infor announces CloudeSuite Retail