Omnichannel sales supports growth

Omnichannel is pretty a comprehensive concept, not always easy to understand. Even more difficult is trying to predict it's effect on sales. Yet is can be done and here's some help doing that.

By now I assume it is clear that omnichannel is the growth supporting direction in retail. Argumenting supporting omnichannel usually focuses on better customer experience which is a great goal and does have effect on sales.

What about economical indicators?

 

Omnichannel grows sales in many ways

Improving customer experience usually is the main goal in omnichannel sales but I see this mainly a step on the way to growing profit.

Omnichannel sales usually grows customer total spending over time. In other ways customer prefers your shop over others and focuses consumption there.

Omnichannel sales also brings short term value even though measuring it might come in challenging sometimes. Luckily there are some ready made calculations to help you calculate how omnichannel would support your business.

 

Click & collect brings more shoppers to store

One relevant short term effect is growing in-store sales: Customer picking up a web store order in store purchases more products while there. In other words, click & collect increases in-store sales. How much? That varies a lot of course.

We did some research on our customer base in the Nordics and based on that statistics, over 20% of customers picking order in-store made additional purchases. It's important to consider this additional sales generated without any extra action. Not bad for a click & collect "side-effect"!

Other researches* indicate this amoutn being even higher, from 40% up to 69%.

Also the amount spent on additional purchases is relevant to profit calculations. Orderdynamics research* estimates this being around 25% of the original order value. for example, customer places a 100€ order online and picks it up in store. Purchase made in-store would be worth 25€.

It is quite simple to make change to these figures: Just let your customers know they can pick their orders in store. This way you get more custoemrs to store and customers get better experience and service.

 

 

Pick & pack in store reduces stock values

This being more a saving method rather than sales growth but visible in profit anyway: handlign online orders directly in store.

Real life example: REtail chain JC picks & packs all their online orders in stores. In fact, they don't even have a warehouse. They just sell store balances online too. This way JC doesn't have to keep updated extra refill storage. Sure they need to have some reserves in-store but as total the amount is smaller.

Also there's the customer experience factor: When picking orders directly at pickup point, they get orders ready for pickup in just few minutes. This is fast service.

Being in clothiing business, leftover sizes are always problematic. With co-operation of stores and online store it is much easier to sell these with smaller discounts. Without having to ship them to separate warehouse or stores.

 

Omnichannel-analytics differs just a bit

Although providing omni-channel service grows sales in general, click & collect might actually have a negative effect on average purchase. This usually is a side effect of growing sales: Offering free delivery with click & collect makes shopping just a bit more appealing. This shows usually as low-value orders. So it still is a positive problem.

Almost all our customers providing click & collect saw their avg order value decreasing yet all of them saw order amounts and total sales increasing. Here's how starting with click & collect showed in their statistics:

Avg. purchase -13% to +5%
Order amounts +26% to +45%
Sales +19% to +32%

In conclusion: sales and order amounts grew but average purchase decreased.

Alltogether, very positive figures! Yet these are still quite short term indicators. Even more important is to follow long term customership value, that's where the biggest gain is.

 

Over 40% of online orders picked in store

Our customers providign click & collect can see how important it is for their omnichannel sales. from 40% to 60% of orders are picked in store. This indicates click & collect being a very popular delivery method. This is alsoa  strong message about what consumers expect. They clearly want delivery alternatives, to visit stores and fast deliveries. They want that convenience we alla re talking about.

Almost all our reports say the same message: omnichannel sales supports growth nicely, when done right.

 

Resources:
An anonymized report done on Viskan customer base with over 500 click & collect stores
* https://www.orderdynamics.com/blog/omnichannel-retail-roi-exist/

 

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