Omnichannel strategy and emerging retail tech have split a divide between major brands, creating greater contrast between early adopters and hesitant companies.
According to Internet Retailer, a new report from Forrester Research shows half of all online retailers plan to invest less than $500,000 into e-commerce tech in 2016. But the other half plans significant spending that ranges from $500,000 to more than $20 million annually.
Thirteen percent of brands expect to spend more than $5 million. The varying degrees of spending underscores the uneven perspectives on omnichannel selling within the retail industry. Despite early evidence that such a strategy can be successful, retailers disagree on how much investment is wise.
Forrester identified two main reasons why half of retailers resist what seems to be an inevitable industry revolution. One point of concern is whether omnichannel strategy can deliver quick returns, or if revenues are more of a long-term goal.
Retailers are also dragging their heels because they don’t feel that consumer demand has hit a tipping point.
Following Consumer Cues
Across several data points in the Forrester research, retailers seem to be split between two brand philosophies. One philosophy guides brands to build new technologies and solutions as they become available, and to be ready when consumer interest inevitably shifts toward having those solutions available.
Another school of thought prefers to wait until that demand is positioned to make a difference on bottom-lines. Some retailers may content that omnichannel strategy is an expensive investment that doesn’t necessarily differentiate its experience from the experience other retailers offer, in part because consumers don’t yet realize that they want it.
To some degree, consumer appeal drives every retail innovation. No matter how smart or well-designed technology proves to be, its long-term value is determined only by how much it is embraced by consumers.
Early adoption of technology can be risky in this sense, because it bets on that embrace by shoppers, which isn’t always a given. And even when research indicates the value and strong long-term prospects for certain innovations — as most research shows for omnichannel solutions — the greatest payoff won’t come until market saturation is such that consumers choose their retailers according to these available technologies.
To be sure, some shoppers are already doing this. But consumers haven’t reached a conclusion on omnichannel selling, which is why 44 percent of retailers, for example, still have no plans to make in-store inventory visible to shoppers online.
That strategy might be favored for its conservatism, but it doesn’t necessarily represent the best business decision.
If retailers are convinced that certain innovations are the future of retail — and industry experts agree that omnichannel selling is the future of online and offline shopping — then resisting this technology only delays the point at which those tech investments can start generating returns.
For early-adopting retailers, omnichannel selling has already proven its value. Someday it will become an industry standard. In the meantime, savvy retailers can get a head start on the pack.
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