Monday, May 13, 2019 OMNICHANNEL Adapting to change as a rule

Estimated reading time: 5 minutes
OMNICHANNEL Adapting to change as a rule

Being the key fair for volume footwear at the international level, it is reasonable to claim that a large part of the footwear worn by women, men and children in the world has been presented at Expo Riva Schuh. This exclusive marketplace, which never fails to foster the meeting between manufacturers and distributors, is however only the first of many stages leading to the final consumer.

Regardless of the length of the process leading the product to its final target, flexibility - namely  the ability to adapt to change and respond to the numerous factors (economic, sociological, technological and cultural) that can affect the market, is an increasingly required ability.

Flexibility is thus strongly connected with the omni-channel concept, a strategic model now prerequisite for the modern companies working in the fashion industry. Let’s talk about it with one of its leading experts, the omni-channel strategist Daniel Agis.

What is omnichannel?

“Omnichannel refers to a strategy based on the integration of multiple sales channels, traditional physical channels and online channels, carried out by a company. Omni-channel will replace Multichannel, a system that still prevails today where the brand’s activities are non-integrated as regards sales channels. Multichannel does not aim at the synergy between the various channels, except as regards a few basic elements. Omni-channel, on the other hand, aims to offer a seamless customer experience regardless the channel(s) used. In the digital age the buying decision process is not at all linked with the sales channel as customers are used to shifting from the physical to the e-commerce world and vice versa according to their needs, preferences and opportunities. This is true for all sectors, from hotels and restaurants, to consumer products, technology and, goes without saying, fashion."


What issues have the brands been faced with during the first stage of Omni-channel implementation?

"Designing logistics is the first challenge faced by companies choosing omni-channel retailing, a task that arises spontaneously when a company’s goal is to allow the consumer to make purchases online while getting the product at the store or to return items using a channel of his/her choice. In practical terms, therefore, there are no specific stocks for any channel and therefore such management is thus extremely complex to design."

What does it mean that, according to the omni-channel approach, customers ought to be allowed to benefit from the same conditions and advantages such as prices, discounts and promotions regardless of channel used?

"Omni-channel retailing cannot be reduced to mere logistics issues. Commercial transparency on the part of the companies becomes an essential condition, as well as a corporate configuration that allows it. There are other fundamental aspects when it comes down to competitiveness such as the way the information obtained by the customer is processed, the way commercial operations are carried out in each channel and consumers’ behavior is monitored (including those who have visited the physical and/or online stores but have not made any kind of purchase). The quality of big data analysis is playing an increasingly significant role in the company's performance, since the mere collection of data is no longer enough. Not to mention that the CRM must integrate all channels and this is a goal not easy to implement. Omni-channel means integrated communication too, which leads to omnimedia that presents the same narrative structure adapted to the various communication formats, whether physical or digital."

What are the main innovations currently affecting and changing the development of the purchase process?

“Fully integrated logistics and marketing coupled with a much deeper knowledge of customers' behavior is bound to significantly affect the way companies organize their products range, how they plan the launch of their products and the production strategies. We can easily state that the difficulties when it comes to implementing Omni-channel are not limited to technical issues (software, HR training for big data and social media communication). As a matter of fact, transforming the corporate culture is of paramount importance.  The main difficulties are experienced with managers, as it is necessary to completely rethink their role by questioning the status quo and the privileges acquired in the company structure. Summing up the answer to your question, Omnichannel brings about technological innovations in almost all areas of corporate management, either in the form of software and also in logistics automation, but what it mainly brings about is a brand new of the relationship with the customer which is an unparalleled revolution in the world of distribution."

Who are the pioneers of Omni-channel in the footwear sector and accessories and in what way did they stand out?

"I usually say that Omni-channel, in the fashion industry is still" aspirational". It is true however that there are companies that have made great strides in many of the key stages, especially those concerning logistics. Although, as I mentioned above, omni-channel is a change in the way a company conceives the whole business. From a certain point of view, semi-vertical distribution companies are moving forward, having always mastered logistics processes. In particular, those used to an intensive use of technology like Inditex – which is in an advantageous position compared to others – do stand out. The most important luxury brands with a strong command of their distribution and communication channels prioritize omnichannel in their development plans. In the same way major sports brands like Nike and Adidas are reorganizing their worldwide distribution in order to become truly omni-channel. Moreover, some noteworthy omni-channel projects are being carried out as regards the integration between physical channels (wholesale) and online platforms (such as Farfetech). Today it is known that large department stores (Macy's, El Corte Inglés, etc.) strategically resort to omni-channel to overcome the worldwide crisis thus offering a better service increasing traffic and synergies between the online platform and physical stores."

In light of the above, the question arises: is Omnichannel exclusively meant for large brands and distribution groups?

"My answer is no, in fact it's just the opposite. Obviously, the change process begins with the largest players, companies and distribution groups. However, omni-channel is a great opportunity for smaller, dynamic and creative companies too. And not only as far as their products, but also in their overall vision and approach as a brand, that is, communication and marketing approach. Omni-channel allows you to bring about a sound internationalization of your business, supported both by online channels and physical channels. The (good) news is that such expansion is no longer affected  (only) by the physical channels’ development (exclusively) which requires an investment in facilities that is not affordable by medium and small enterprises, as well as a higher management risk or even agreements with large international distribution groups that are usually inaccessible. On the other hand I also think that a company with a lighter and more flexible configuration, being aware of the need to change, can be faster in breaking down those barriers that jeopardize the full implementation of a true omni-channel corporate culture."