2014 was the year that online retailers finally recognized the advantages of brick-and-mortar stores. E-commerce giant Amazon opened its first retail stores, including several pop-up stores for the holidays. And Warby Parker, which had already experimented with storefronts in 2013, showed a neat payback this year. The company’s stores are seeing about $3,000 in annual sales per square foot — far better than Best Buy and even topping Tiffany & Co.
With such great success, it only makes sense that we can expect the savviest retailers to use new solutions to deliver the three things customers want — convenience, service, and value — where they want them in 2015.
So move over, e-commerce — 2015 is the year that omnichannel comes of age.
Omnichannel Success Stories of 2014
To see where omnichannel commerce is going, we have to see how it got here.
In 2014, a number of online retailers looked like new dogs learning old tricks. While Warby Parker was the clear frontrunner, it wasn’t the only player worth watching. Sephora built on its position as an omnichannel leader by integrating digital gifting into its overall marketing strategy and topping L2’s annual Specialty Retail Study for the third year in a row — with the highest “digital IQ.”
Nordstrom — considered by many to be the leading omnichannel retailer in the world — drew some criticism when it acquired Trunk Club earlier this year. But the acquisition makes sense for Nordstrom, which has built its business and reputation on a foundation of outstanding customer service, and it was ultimately a smart move.
Meanwhile, Target is figuring out its particular brand of omnichannel commerce. By offering Curbside, an in-store pickup service, and acquiring a personalization platform to customize the in-store shopping experience, Target shows it “gets” what customers want (i.e., a satisfying shopping experience wherever they go). Expect more acquisitions and growing digital spending from Target in 2015.
Omnichannel success stories like these will encourage other online companies to meet shoppers in person and entice traditional retailers to invest heavily in digital solutions, but the strategy is hardly surprising when you look at the numbers. According to Forrester Research’s figures for 2014 retail sales in the U.S., online sales will amount to less than 10 percent of total sales.
Upcoming Trends in Omnichannel Commerce
Leading companies have recognized that showrooming and e-commerce don’t spell the end of retail businesses. However, silos that prevent retailers from integrating digital intelligence and technology into their operations can certainly turn them into dinosaurs. And e-commerce and omnicommerce will only continue to evolve in 2015. Here are my top five predictions for 2015:
1. Webrooming will eclipse showrooming. Not even lower-ticket items are safe from webrooming, and smart e-commerce-first companies are taking advantage by opening stores.
2. Retailers will significantly increase their digital spending. Retailers are attempting to keep up by integrating web, mobile, and in-store shopping experiences. While few will argue that the expenditures are necessary, it won’t be easy to prove ROI.
3. E-commerce social shopping will go mainstream. Twitter and Facebook tested buy buttons in 2014, and they’ll roll them out in 2015. For lower-priced items and e-commerce-only merchandise, social shopping buttons will begin driving real revenue. For example, Urban Outfitters aims to maintain its lead by working with Wanelo to allow in-app e-commerce sales.
4. While you’ll see more buttons in 2015, you won’t see fewer stores. In fact, the big opportunity is connecting to in-store sales, where 90 percent of retail sales happen and brand enthusiasts may become advocates.
5. In-store analytics will improve, but brands will struggle to use it. It looked like 2014 was going to be a big year for e-commerce-style analytics in the physical store, especially with all of the hype around iBeacons and big funding rounds for companies like Nomi at the end of 2013. However, beacons haven’t attracted much more than test-and-learn dollars from retailers, and Nomi had to merge with a competitor.
Retailers are certainly going to continue testing the waters, but keep in mind that there’s still no platform that offers these in-store insights to the brands that sell in these stores.
By looking to the past, we can see the direction our future is headed. Believe me: Omnichannel isn’t slowing down. In fact, 2015 is going to be the year of omnichannel commerce, and retailers who can delight customers wherever they shop — whether that’s curbside, online, or in store — will be the real winners.
