Michael Smollan
Michael Smollan

The magic formula for successful omnichannel retailing

by Michael Smollan. Physical retailers are trying to work out the magic formula to compete with digital, when the answer is right here.

by Michael Smollan. The brilliant Rory Sutherland, Ogilvy UK vice-chairman and all-round legend, explained his theory as to why online is so successful – not for the myriad of reasons we think, but rather for the simplicity it offers. We know exactly where to get an item and its always in stock. You can log on at 2am or at midday between meetings, and the product is always there.

With innovation the watchword, retailers and brands are looking to find the sweet spot to get consumers back into our shops and malls at the same time building an online experience to drive sales. Sutherland’s theory supports this, suggesting that if someone could, in real time, digitise all the inventory in the stores around where you work or live; you would know exactly where to get any of the items you desire. And when stock arrived you would be notified so you could pop down to the store to collect it – job done. There’s no waiting for the goods; you have instant gratification; you can use the products immediately and the list goes on.

So, what if we tipped that theory on its head? All physical retailers are trying to work out the magic formula around how to compete with digital when the answer is right there. The inventory is on hand, ready to be purchased whether the consumer is off-site or in-store; and the retailer has the option to deliver any out-of-stock goods. Physical retailers could be in stock all the time even if they had to ship goods. This is a massive drawcard for physically bringing back consumers to the store – however, the reality is that very few retailers have learnt to effectively merge digital with the physical.

The ultimate point of purchase

In South Africa, I can only think of Yuppiechef where I can go into a store, look at the products, and if they don’t have them, I can then choose to have them sent to my house. It is astonishing to me that physical stores, in most instances, have as yet not worked out how to combine two of the most powerful forces in retail history – the modern trade retailer and the smartphone. You basically have every tool at your disposal to be the ultimate point of purchase. For example, you could log on to your local mall’s app, browse what you want, and then pop down to buy it because you know exactly where it’s sold, and if it’s available. Besides the fact that if they could give me my coffee just the way I like it, I would be sold on the idea.

With the device and physical footprint partnering up, you could do anything under the sun. Virtually trying on clothes; making use of loyalty cards; sourcing information about products; and the list goes on and on. Once you have a customer that wants to use this phygital or omnichannel feature, you can give them the Rolls Royce physical experience – and that damn coffee at the door they so desperately crave!

The problem is that physical retail thinks it has to compete with online when it could, other than Walmart, use the assets it has to its advantage. Instead, it tries to wring out the last bead of sweat to compete more on price which is the death knell for physical. Take Amazon for example – the biggest misconception is that Amazon is killing Walmart. If I was a Walmart exec I probably would’ve been trembling in my boots, but what they soon realised is that Amazon can only really be Amazon in major city centres because of its footprint. Whereas Walmart can be Walmart in every single town in America. I think one of the stats out of the US is that everyone in America lives within 10 miles of a Walmart store. It’s incredible.

This is a gigantic advantage over Amazon – talk about a footprint. They can compete on home delivery and Click & Collect; but even more so, they can make their stores a place people want to shop. They didn’t lose faith in physical, they merely stepped up as an omnichannel partner and made the two work together. This is really the strongest weapon physical has against digital and this will always be the case. By removing the channel divide, one can eliminate the internal competition that may be holding business back.


Main image credit: Pixabay.com.



Michael Smollan is Chief Growth & Innovation Officer of Smollan. Smollan is a leading retail solutions company that delivers growth for retailers and brand owners across five continents by covering every aspect of how their brand is managed at the point of purchase, from field sales to in store and digitally. Smollan partners with brand owners and retailers to deliver accelerated growth by increasing reach, driving availability and visibility, increasing efficiency, and delivering superior shopper experiences; operating across emerging and developed markets, in modern and general trade, and across physical and digital channels.


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