Are mass merchants’ online/offline pushes falling short of omnichannel expectations?
Target has a varied approach to omnichannel delivery and pickup that involves testing a number of different strategies, including the Instacart and Curbside apps. Walmart is accelerating expansion of its online grocery pickup and has begun using a mobile-driven service to simplify in-store pickups for online general merchandise orders.
“As the definition of omnichannel evolves, some retailers forget the importance of delivering the right experience to get consumers to actually purchase,” said Bridget Fletcher, vice president of marketing at Rakuten Marketing. “An omnichannel strategy needs to be cognizant of all of the touch points in the consumer journey that span screens and a multitude of interactions that include the retailers Web site, mobile site, mobile apps, publisher sites and social media.
“Omnichannel is becoming synonymous with offline/online, but retailers need to be vigilant about ensuring they deliver a cohesive set of experiences that engage and inspire a consumer to buy – before shipping methods are even considered,” she said. “Although shipping is important, shopping is a critical piece of the puzzle.
Consumers increasingly expect on-demand purchasing and delivery experiences, which Walmart and Target are clearly trying to address.
Target has said it expects nearly 25 percent of Target.com sales will be fulfilled by a store during the holiday season, either through Order Pickup or shipping from a store.
One of Target’s strategies is to ship orders from a store, which provides an average delivery time of two days. The retailer reports that 462 stores, or more than one-quarter of the chain, ship Target.com orders.
Target.com shoppers can also choose to pick up their order from a store, with more than 80 percent of orders ready within one hour.
New this year, Target shoppers can opt to have 200,000 online-only items shipping to a nearby store for pickup.
Through the Curbside app, shoppers can ice up their purchases at the entrance of a local store. This service is now available at 121 stores in San Francisco, Philadelphia, New Jersey, New York and Chicago.
Using the Instacart app, on-demand grocery delivery is now available in San Francisco and Minneapolis.
Target is also offering free shipping on all Target.com offers from Nov. 1 through Dec. 25.
One way Target could improve the experience would be to only show items that are available for pickup in-store.
Walmart is accelerating the expansion of its online grocery pickup, which is currently available in more than 20 markets.
Walmart reports that customers who start using online grocery spend nearly 50 percent more than similar customers who shop only in stores.
The retailer recently said the shopper who accesses Walmart in multiple ways is a key focus going forward.
Walmart has also begun using a mobile service across the chain that lets a store know when a customer is coming to pick up an online general merchandise order before they walk into the store and informs the shopper when the order is ready to pick.
However, Walmart has a $50 minimum threshold on online orders to qualify for free shipping. Instead, the retailer is encouraging shoppers to pickup orders that do not qualify for free shipping at a nearby store.
Walmart could focus on reaching consumers by increasing relevant touch points on other channels, such Instagram and Facebook.
The idea is to go beyond online/offline touch points to put in a personal touch even when there is no face-to-face interaction.
Walmart and Target will be both be looking to see which of these strategies resonate best with shoppers. But they will also be comparing them from an operational standpoint – which are easiest to implement, which do shoppers and associates understand better.
“Walmart and Target’s decisions will put pressure on suppliers to turn around orders faster than ever before in order to avoid inventory shortfalls,” said Mike Elmgreen, chief revenue officer and co-founder at Handshake.
“Over time, rather than shipping only to a Target or Walmart warehouse, suppliers may need to more frequently ship directly to the store or even begin drop-shipping directly to the consumer,” he said.
“As these big box chains fully embrace the omnichannel, on-demand realities of today’s market, their requirements will likely trickle down to other retailers and their suppliers as they attempt to keep up.”
Chantal Tode is senior editor on Mobile Commerce Daily, New York