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Execution archivos - Shelfmanager https://frogmishelf.com/blog/tag/execution/ Increase sales and productivity with an optimized in-store SKU level execution Logo starbucks Logo 7 eleven Logo Bizarro Logo Farmacia ahumada Logo Bci Seguros Logo Burgerking Logo Burgerking Logo starbucks Logo 7 eleven Logo Bizarro Logo Farmacia ahumada Logo Bci Seguros Logo Burgerking Logo Burgerking Logo starbucks Logo 7 eleven Logo Bizarro Logo Farmacia ahumada Logo Bci Seguros Logo Burgerking Logo Burgerking Mon, 14 Mar 2022 22:35:38 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.4 https://frogmishelf.com/wp-content/uploads/2022/05/cropped-favicon-frogmi-32x32.png Execution archivos - Shelfmanager https://frogmishelf.com/blog/tag/execution/ 32 32 Phantom inventory 101: Its symptoms and how to treat it https://frogmishelf.com/blog/phantom-inventory-101-its-symptoms-and-how-to-treat-it/ https://frogmishelf.com/blog/phantom-inventory-101-its-symptoms-and-how-to-treat-it/#respond Mon, 14 Mar 2022 22:26:36 +0000 https://frogmishelf.com/blog/inventario-fantasma-101-sus-sintomas-y-como-curarlo/ Let's put ourselves in the following situation: an in-store walk-through.
The objective is to experience the store from the customer's perspective...

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Let’s put ourselves in the following situation: an in-store walk-through.

The objective is to experience the store from the customer’s perspective to assess whether the standards defined by the company are met.

When walking down the aisles, it is impossible to avoid noticing empty shelves, locations that do not have enough stock, out-of-stock products generating dead areas, and others that cover more than the optimum, taking advantage of open spaces.

When checking the system, the inventory indicates that there is sufficient stock. Then, the replenishment of the product is coordinated since -theoretically- the backroom has enough inventory. It only needs to display it and make it available to customers.

However, the problem does not end there. When looking for the products, it is discovered that they are not there, there is no stock inside the store or in warehouses. This situation is called phantom inventory.

What is Phantom Inventory

Phantom inventory is inventory that does not exist in reality but appears to be in stock, like a ghost. Thus, the inventory system shows existing on-hand units, even though it is not actually in the warehouse or available on the shelf for the customer to see and buy.

These discrepancies between system information and reality can originate for several reasons, such as typing errors in the sale, carelessness in inventory receipt, and product shrinkage. But regardless of its origin, the detection and management of phantom inventory become complex since the system considers that the product is in stock, even though the store has no physical units.

The pain for retailers is evident when they believe that a product is available but – in reality – it is not, risking OOS and the associated loss of sales, as we saw in our previous blog. Another drawback of phantom inventory is its perpetuity. As the system indicates that the retailer has enough stock, the reorder point is never reached to restock, maintaining the situation over time. Thus, a pivotal act to break this vicious cycle is detecting signs of phantom inventory.

The symptoms of phantom inventory

To manage phantom inventory, the first step is to identify it and locate these gaps. However, as phantom inventory can originate for several reasons, it is difficult to detect the root cause for its management. That’s why retailers should focus on recognizing the visible symptoms, those that make the existence of phantom inventory evident.

One such symptom is stockouts. We have already seen that one way to recognize this symptom is to have eyes and hands in the store, spend time physically verifying where there are stockouts, and then check them against the system to identify an inconsistency in the inventory.

Considering that the average retailer handles around 16,000 SKUs simultaneously, this manual task can be challenging to tackle. In addition, it is clear that the larger the assortment, the greater the complexity of the job, making the management of phantom inventory uphill.

The second option for pinpointing symptoms of phantom inventory will be to rely on data analytics and artificial intelligence (A.I.) tools that can predict potential stock outs through analytical observation, identifying patterns and inconsistency in the data. There are three alerts that may suggest some deviation and phantom inventory risk.

  1. Decrease in turnover: a decrease in the turnover of any SKU in respect to the normal or the projection.
  2. Sales $0: the data shows that there are no product sales, despite having positive inventory. It can also be considered an alert when sales show anomalies concerning the demand projection.
  3. Changes in sales trend: The sales pattern of a product changes abruptly, for no apparent reason.

One of the most significant advantages of using a data analysis system with A.I. and Machine Learning is that the algorithms refine the predictions as they are used. In this way, the alarms will become more and more accurate, improving the ability to diagnose phantom inventory.

What to do to treat your stores

Once the symptoms and products at risk of phantom inventory have been recognized, the hypothesis must be validated. Regardless of the method used (manual or through A.I.), a cross-check should be made between the system and total physical inventory (units displayed in the store plus backroom units). This evaluation will shed light on inventory disparities and where adjustments need to be made so that the system information reflects the store’s reality again.

At Frogmi, we know that managing phantom inventory is a complex process and one that must be performed constantly. Regardless of the methodology used to detect the problem, the solution involves manual in-store work to validate the possible inventory discrepancy. Our SKU-level task management solution is ideal for addressing this challenge from both methodologies, as it allows you to view information at the store-product level.

For example, a manual phantom inventory survey can be performed. One of the functions of Frogmi is the ability to generate tasks from a product (or the absence of it), which means that when stockouts are identified during a store walk-through, an automatic replenishment task can be created by simply scanning the product. If the area in charge of replenishment does not have enough units to replenish, a case of phantom inventory will have been found, enabling its immediate management.

On the other hand, if an A.I. system is used to alert phantom inventory, Frogmi can be easily integrated to generate automatic validation tasks specific to each store at SKU level. Thus, each store will have the opportunity to manage those products that behave atypically in sales or inventory turnover.

In our experience, the ideal plan of action is to use both tools simultaneously, facilitating the diagnosis of phantom inventory and decreasing the associated losses. This reaps the benefits of A.I. while empowering store personnel with self-management tools, improving inventory management, shelf availability, and, consequently, sales.

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Emerging technologies: using AI to identify phantom inventory https://frogmishelf.com/blog/emerging-technologies-using-ai-to-identify-phantom-inventory/ https://frogmishelf.com/blog/emerging-technologies-using-ai-to-identify-phantom-inventory/#respond Tue, 21 Sep 2021 12:39:59 +0000 https://frogmishelf.com/blog/emerging-technologies-using-ai-to-identify-phantom-inventory/ The use of technology in retail is not new. However, in recent years we have seen an increase in its benefits and possibilities within stores...

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The use of technology in retail is not new. However, in recent years we have seen an increase in its benefits and possibilities within stores. The digital world is here to stay, and retailers must be at the forefront to make the most of these new tools that have become indispensable in decision making, process improvement, and taking advantage of the opportunities it offers. 

The problem of supply is a reality for all retailers, which goes beyond customer dissatisfaction and lost sales. Companies make great efforts to design products, strategies, and campaigns. However, this effort will be in vain if the product is not available on the shelf for the customer. 

In this context, retailers are paying more and more attention to inventory management and the replenishment process. But what about managing phantom inventory?

Phantom inventory is when the system shows positive stock for an SKU or item, but the store, in reality, has no units of that SKU, or the product is not visible for the customer to purchase. In other words, it refers to products that the system thinks are available to the customer, but in practice, they are not. They are like ghosts since they appear in the inventory system but do not exist on the shelf. 

These discrepancies between the actual inventory and the one reported in the system can arise for several reasons. According to a study conducted by MIT Supply Chain Management, among the most common causes are the following:  

1. Inventory errors in the sale: mistakes can be generated when scanning the products when making the sale. This is a common situation in products with varieties, such as different yogurt flavors. 

2. Errors in receiving inventory: are generated when products are received without a detailed review. For example, the entry of products in pallet format or grouped instead of considering the unit. In these cases, the discrepancy can be generated when entering and confirming a quantity different from the physical amount in the system.  

3. Operational execution and compliance: Non-compliance with procedures and protocols can lead to phantom inventory problems when, for example, products are left in the warehouse or backroom and not on the shelf. Products are left out of sight in the warehouse. It can also happen due to damaged or shortage products that were not recorded in the system.

4. Shrinkage: inventory reduction can be caused by loss, theft, damage, or product consumption inside the store or warehouse by employees or customers. 

5. Misplaced products: both store personnel and customers can cause some products to be misplaced. It can happen because products are stored or displayed on another shelf, hidden behind similar products, or moved from their original place by customers inside the store. 

The impact of phantom inventory in retailing 

In our previous blog, we discussed the impact of out-of-stocks on the final sale, introducing the term Out-Of-Stock (OOS) and On-Shelf Availability (OSA). 

Retailers have visibility of stock through their inventory management systems. OOS detection is done from the same system, as it contains information on SKUs that have stock equal to or less than zero. 

Studies show that, in general, the inventory management system reveals stock problems for 2% of SKUs. This stock-out level could be considered the tip of the iceberg, as studies by the Grocery Manufacturing Association (GMA) and Efficient Consumer Response Europe (ECR Europe) show that the stock-out level is 8% in both the United States and Europe. 

The challenge of phantom inventory lies here, as 75% of on-shelf stock-outs are not reflected in the system. 47% of cases are due to a lack of stock at the store or backroom (hence, the inventory level recorded in the system does not match the stores’ reality). In the remaining 53% of cases, the problem arises because the store has inventory, but the product is not available within reach of the customer for sale.

According to the same GMA study, a retailer faces a 43% loss of potential direct sales when no stock is available on the shelf. Thus, the impact of stock-outs due to phantom inventory in retail would amount to a direct loss of 2.6% of sales. 

AI to identify and manage phantom inventory

The use of artificial intelligence (AI) in retail is on the rise. According to studies by Juniper Research, investment in this sector will reach $7.3 trillion by 2022 in areas such as customer service, automated marketing, and demand forecasting. This projection could be exceeded given retail’s ability to adapt to pandemic-driven changes in consumer habits. 

According to Boston Consulting Group (BCG), the increased use of AI in retail is critical to driving business revenue. AI allows retailers to generate and evaluate forecasts considering variables in several scenarios, such as demand, supply, inventory, pricing, and logistics. In addition, thanks to this technology, large databases can be analyzed in a short time, boosting decision-making based on real-time information. 

The development of technology has enabled the incorporation of AI-based replenishment systems. As we saw earlier, the causes of phantom inventory are varied, making its management a complex task. Given this, AI has focused on analyzing the symptoms of phantom inventory, such as sales anomalies. 

AI systems have significant advantages, as they perform a statistical analysis to evaluate the probability of an SKU being out of stock. These systems integrate a high number of variables and Machine Learning algorithms, which identify data patterns. 

Based on this analysis, it is possible to detect if the sale of a product is anomalous. We speak of anomalous sales when the actual sales of a specific SKU do not match what was planned by the demand projection system. Under AI analysis, it is unlikely that these products have zero sales if they are available on the shelf, so it is inferred that there are phantom inventory problems. 

Furthermore, a notification system can be added to the probabilistic analysis. Then, an automatic alarm will be triggered to tell store personnel which SKUs have phantom inventory problems and should be checked in the backroom for shelf replenishment.

Frogmi’s global vision goes beyond problem reporting and alerts. Frogmi offers a complete SKU-level product management solution that considers manual replenishment, specific notifications, and SKU-level tasks generated by artificial intelligence. Thanks to Frogmi’s integrated solution, the information does not remain stagnant in a report or email but is taken directly to the stores to be managed. The ultimate goal is to have a complete vision that allows preventing, identifying, and addressing possible stock-outs as soon as possible to deliver the best availability and increase sales.

At Frogmi, we know that the implementation of task management tools integrated with technology and AI solutions are welcomed by store personnel, as they deliver valuable information oriented to execution with concrete objectives. 

Although it often goes unnoticed, phantom inventory comes at a high cost to retailers. Fortunately, the technology to identify and manage it is already available through AI and in-store operation platforms. All that remains is to join this trend, so phantom inventory problems become a thing of the past. 

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Technology for an effective shelf replenishment process https://frogmishelf.com/blog/technology-for-an-effective-shelf-replenishment-process/ https://frogmishelf.com/blog/technology-for-an-effective-shelf-replenishment-process/#respond Tue, 07 Sep 2021 18:02:58 +0000 https://frogmishelf.com/technology-for-an-effective-shelf-replenishment-process/ Covid-19 has brought to light the biggest challenge for retailers: maintaining stock and replenishing products inside stores in a scenario of highly volatile demand...

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Covid-19 has brought to light the biggest challenge for retailers: maintaining stock and replenishing products inside stores in a scenario of highly volatile demand. Faced with this level of uncertainty, it became common to see images of supermarkets and stores with stocking problems, empty shelves, and dissatisfied customers.

The current context has put pressure on retailers, making it increasingly evident that to deliver the best service to customers and, consequently, avoid loss of sales, it is necessary to prevent stock problems.
To manage this challenge, the first step is to understand the problem and differentiate between two basic replenishment concepts: Out-Of-Stock (OOS) and On-Shelf Availability (OSA). Although both terms refer to supply and availability issues of a product in the store, they have significant differences to keep in mind.

  • Out-Of-Stock (OOS): according to Thomas W. Gruen and Daniel Corstenen’s “Comprehensive Guide to Retail Out-of-Stock Reduction in the Fast-Moving Consumer Goods Industry”, there are several definitions for OOS and no general agreement in the industry. However, a globally accepted definition corresponds to the metric of when a retailer intends to have a product available for sale, but there are no physical units in the store. The stock level of the product in the store and back store is equal to zero.
  • On-Shelf Availability (OSA): refers to the metric that describes when a retailer intends to have a product available for sale and the product is on the shelf for the customer. That is, when a consumer wants to buy, the product is available and exhibited within reach.

At first glance, OOS and OSA could be confused as the same concept. However, there is one key point that sets them apart: the attention on the customer experience. OOS puts the focus on the product and its level of inventory in the system. In contrast, when we talk about OSA, the focus is on availability to the customer. The discrepancy between the two terms and their perspective is evident when the product is in stock (stock greater than zero), but it is not correctly displayed for the consumer to purchase. This can happen for various reasons, such as damaged products, stock left in the back store, in the warehouse, located on the wrong shelf, or in a customer’s cart.

The effect of stock-outs

Let’s be clear: OOS and OSA problem is a waste of time, money, and energy for the retailer and the customer. But it also has a long-term implication. They both contribute to customers switching brands and retailers to meet their needs.

According to Efficient Consumer Response Europe (ECR Europe), when a consumer faces a stock-out on the shelf, they have several behavioral alternatives: buy another brand, change stores, delay the purchase, buy a smaller format, or simply abandon the purchase. On average, 21% of the time will decide to switch stores, while 9% will leave the store and abandon the purchase. According to a Grocery Manufacturers Association (GMA) study, these numbers are even more overwhelming in the U.S. market, where the decision to shop elsewhere rises to 31%. In other words, every time a customer faces a stock-out, the store perceives a direct loss with a 40% probability. If we also add the loss associated with selecting a smaller format (16%), retailers lose sales half the time a consumer faces an OSA.
But how frequent are in-store and on-shelf out of stocks? Studies show that retailers are far from delivering near-perfect fulfillment. OSA studies in Europe show an average stock-out rate of 7.1%. This figure exceeds 30% when it comes to promotional products. On the other hand, according to studies by the GMA, the OOS rate is around 8% in the United States, with no significant variations in recent years. Surprisingly, these figures show that, in practice, a customer will not find 1 out of every 12 items they intend to buy.

The level of OOS and OSA of a store has severe repercussions on service level and sales. According to the GMA study, an average retailer loses approximately 4% of sales due to stock-outs.

Using technology to support replenishment

At Frogmi, we know that making the distinction between OOS and OSA opens up a world of possibilities to improve stores’ compliance with stock levels. In fact, according to the ERC study, ensuring correct stock and shelf availability depends 85% of the time on internal store processes. Technology plays a fundamental role in having products permanently available, supporting the buying process, and increasing sales.

In our experience, the key point is the preventive and corrective identification of store and on-shelf stock-outs to activate the replenishment process.

Corrective identification refers to the ability of stores to discover when a product is not meeting the correct stock on display. On the other hand, preventive identification relies on statistical models and artificial intelligence (A.I.) to assess whether a product is out of stock or at risk of being out of stock.

Platforms such as Frogmi enable both sides of the replenishment process simultaneously: corrective and preventive. It provides new capabilities to store teams to identify when a product is out of stock quickly and easily. The task management tool sends immediate tasks to the warehouse or back store so that the product can be picked and sent to the sales floor, activating the replenishment cycle. This process is leveraged on store employees, who can continuously raise OSA incidents throughout the day, avoiding breakage during the store’s opening hours.
Regarding OSA prevention, Frogmi’s advanced analytics system identifies sales anomalies that raise alarms and trigger tasks on the sales floor. Hence, stores can assess those critical products and check if they are correctly displayed and adequately stocked.

Even though there are tools that can support the identification of stock-outs, it is always good to keep in mind who is actually doing the work. The stores’ personnel has limited time and resources to perform their tasks. Their capacity for execution is limited. The use of technology can go even further, prioritizing tasks based on strategic criteria for the business, such as opportunity cost, significant sales, or must-have products. In this way, stores can make efficient and effective use of their resources and ensure on-shelf availability.

The use of technological tools in the replenishment process will increase product availability by 4 to 6 points. At the same time, this availability for the customer will promote sales, with an estimated effect of 2 to 3 points of sales growth, according to BCG Group analysis.

The use of new technologies will be a fundamental pillar for retailers seeking to reach the next level. The replenishment process is becoming increasingly relevant to consumers. Eliminating stock-outs will be a basic requirement to deliver an adequate service level to enable a successful strategy and increase sales. Using technology in these key processes can increase operational efficiency, boost sales, and, most importantly, improve customer satisfaction.

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Omnichannel in stores: a stock and implementation challenges https://frogmishelf.com/blog/omnichannel-in-stores-a-stock-and-implementation-challenges/ https://frogmishelf.com/blog/omnichannel-in-stores-a-stock-and-implementation-challenges/#respond Tue, 24 Aug 2021 14:58:39 +0000 https://frogmishelf.com/omnichannel-in-stores-a-stock-and-implementation-challenges/ La entrada Omnichannel in stores: a stock and implementation challenges se publicó primero en Shelfmanager.

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In recent times we have witnessed the transformation of the consumer with an accelerated digitalization, caused by the growth and emergence of new technologies and the confinement and pandemic effect, which forced many brands to start operating under multichannel strategies.

While store visits fell and the e-commerce boom began, the reopening of physical stores has allowed us to see how people have started to return to the stores. The reopening has created a new opportunity: facing hybrid consumers looking for consistency between what they know about our brand and what they expect to see in the store.

When we talk about hybrid consumers, we refer to those who know the brand and how it operates, both digitally and physically—an informed consumer looking for the same shopping experience across all channels.

According to a study by Káwesqar Lab, at least 89% of consumers will continue to use the physical format to shop, and within this, 66% will opt for mixed formats, shopping omnichannel or hybrid (Ecommerce Tracker Lab June 2021 – Kawésqar Lab).

Moreover, we know that June has been the month that has registered the highest number of visits in shopping centers in 2021, increasing by 3 points the qualification of affluence to stores (source: Getin Study “the renaissance of physical stores 2021”).

This new context and changes in the consumer’s shopping style result in a direct challenge in productivity, stock assurance, and implementation to meet the current needs of shoppers and increase our average tickets.

Stock challenges

Considering the new consumers, the stocking challenge means that each store must ensure the availability of key items. For example, having stock of sizes according to the demand of the geographical location of each store, having the color curve for each product, and finally that those critical SKUs for the season or that are in online presence, are also available in our physical stores.

So, the stock challenge goes beyond just “having products” but must generate an intelligent planning and demand projection system, together with a sound logistics system that coordinates all processes efficiently. This requires technological platforms to support the operations as a whole, helping to systematize compliance at all levels in the store.

For stores, the challenge goes beyond the basic concept of the system’s stock. To achieve sales, the product must be available at the customer’s fingertips. It is essential to ensure that all the efforts made to ensure assortment are reflected in the consumer’s eyes, avoiding display shortage in the store. In other words, products should not be hidden or forgotten in the backroom but should be correctly displayed on the tables, wall displays, and cabinets, allowing them to be sold at the right time.

A technological tool, such as ShelfManager, can support stores in identifying the need for replenishment on the sales floor at SKU level so that the product is always available in front of the customer.

Implementation challenges

Currently, the average time customers spend in a store is 11 minutes per person (source: Getin Study “the renaissance of physical stores 2021”). The big questions to ask ourselves are: How do we implement with the customer journey time in mind? How do we win over the customer in less than 11 minutes?

If we think about the customer journey and take advantage of every minute of their visit as an opportunity, it is essential to consider the role played by promotional activation. This must be aligned across all communication channels in line with the company’s strategy. In addition, unique in-store opportunities can be generated to confirm and leverage the consumer’s decision to visit our stores physically.

Implementing on time and efficiently starts by ensuring communication with the store so that guidelines from different business departments, such as marketing and visual merchandising, reach the store and are correctly implemented.

In contrast, we often encounter problems of visibility and actionability to correct possible errors in these implementations, such as lack of product, POP material, or poor execution of the planogram or display, among others.

Platforms such as Frogmi allow us to send implementation tasks with all the relevant information to be executed in-store, guiding them to ensure the reception of the information and proper execution.

Considering the rise of hybrid consumers, stores must keep up with the pace of promotional activities in the digital world. Hence the growing relevance of communication to and from stores.

Technologies such as Frogmi allow HQ to receive real-time results, with valuable information such as photographic evidence. In addition, since Frogmi is a web-mobile platform, it is possible to access this information from wherever you are, thus eliminating the need for physical store visits by the areas in charge to corroborate the execution.

​​ An example of productivity with an omnichannel focus.

Based on the above, we know that increased competition and omnichannel demand greater flexibility and agility in promotions and activations, along with the need for fast and effective communication.

One retailer that today is betting on introducing Frogmi technology to its processes and workflows is La Polar. Its Operations Manager, José Ramón Sánchez, states that “The teams feel more satisfied, the level of service has improved, the products codes match, the process iteration is reduced by half, life is simplified, and everything is faster.” 

The contribution of technology to support retail strategy is driving and achieving faster and more effective communication, impacting team productivity. It enables staff to carry out all planned activities quickly and effectively while at the same time generates real momentum for the store’s omnichannel strategy.

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Omnichannel experience, why is it the key to achieving more customers? https://frogmishelf.com/blog/omnichannel-experience-why-is-it-the-key-to-achieving-more-customers/ https://frogmishelf.com/blog/omnichannel-experience-why-is-it-the-key-to-achieving-more-customers/#respond Tue, 03 Aug 2021 15:03:05 +0000 https://frogmishelf.com/blog/omnichannel-experience-why-is-it-the-key-to-achieving-more-customers/ La entrada Omnichannel experience, why is it the key to achieving more customers? se publicó primero en Shelfmanager.

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Companies today have more channels of interaction with their customers than ever before. Traditional ones, such as physical stores, have been joined by digital ones, such as apps, social networks, and online sales. The challenge now is to bring them all together. Their integration into a single system is the goal of omnichannel, a strategy, increasingly in vogue, that allows the consumer to move seamlessly from one channel to another during the buying process and obtain the most satisfactory experience possible.

Óscar Katime, partner in charge of Innovation at the EY consulting firm, lists its benefits: “With omnichannel, a better service is provided, and this will enhance market positioning; which, in turn, will make the company more accessible, closer, transparent and friendly. An increase in the number of transactions, therefore, will be the consequence.” In addition, brands will gain valuable insights into their customers’ habits through this integration.

The opportunities for organizations to drive this strategy are multiplying in the face of the rise of the hybrid consumer, who combines traditional and digital shopping. “In 2020, 52% of citizens said they go to the physical channel and the internet interchangeably, but in the future, this percentage is expected to be 78%,” says the president of the Spanish Confederation of Commerce (CEC), Pedro Campo, referring to the conclusions of the organization’s last congress.

The physical store represents the traditional place where companies offer their products and services and carry out transactions. Still, few businesses today can do without digital channels, which multiply the opportunities to interact with the consumer. Victoria Labajo, professor of Commercial and Retail Management at Universidad Pontificia Comillas ICAI-ICADE, mentions the most common: “Websites [which have virtual mailboxes and chatbots], commerce through mobile devices, sales platforms and applications, social networks and marketplaces such as Amazon or eBay. In addition to product aggregators [sites that compare different brands of the same type of product, such as ShopAlike] and promotional flash sale platforms [that offer discounts for a limited period of time].”

If managing several of these channels at once is defined as multichannel, omnichannel is merging all of them into a single system. In this way, “they are presented perfectly integrated into the same shopping experience, or some of them are combined at different points in the process,” explains Labajo. For example, “in the physical store, digital touchpoints can be incorporated: tablets to check stock or for customers to consult the catalog or search for product information, as well as augmented reality applications, such as virtual fitting rooms, among others,” the professor describes.

For Luis Soler, Consulting Partner at Deloitte, a clear example of an omnichannel business model is “the restaurant with its own website, which takes orders by phone, has a presence on home delivery platforms and, of course, has tables on its premises.” Consumers thus have multiple ways to make reservations and orders and get helpful information about the business.

Communication with the customer by all possible means

Communication is a key factor in omnichannel. When referring to it, the director responsible for Digital Business at KPMG in Spain, Benjamin Evans, mentions several essential actions that are part of its digital aspect: “Display advertising [ads that combine images and text, and that are shown on the top or side of pages in the form of banners, in Spanish, pancartas], search engine marketing [search engine ads, SEM for its acronym in English], email campaigns, push messages on the cell phone [those that arrive from an application, even if it is not being used at the time] and social networks, among others.” Likewise, the typical traditional channels for developing a communications campaign are print, outdoor ads, radio, and television, he adds.

A combination of both worlds that this expert brings up is the gradual transformation of a medium like television into something more personalized and interactive thanks to Smart TV (connected TV). “Increasingly, users will see ads on the screen that will lead to a landing page [a web page accessed from a link] by pressing a button on the remote control,” Evans predicts.

In any case, what must be taken into account, stresses Erik Rigola, digital strategy specialist at the consultancy RocaSalvatella, in the Banco Sabadell Podcast “Simple ways to sell online,” is that “there are not only digital or only physical consumers, but omnichannel consumers, so it is not so important the channel through which the customer acquires the product but the shopping experience that is provided.” 

https://www.ivoox.com/player_ej_72344830_4_1.html?c1=006dff

For Evans, the center of the strategy will always be the user. “And you have to accompany them throughout the buying process to make it easier for them to get to know the product, the brand, or the company, but especially to make them feel the most important thing,” he adds.

Inditex represents one of those cases in which omnichannel is a success, Labajo believes. “Despite having arrived at e-commerce later than some of its competitors, this firm is committed to integrating digital and traditional, and it has achieved this by favoring the generation of traffic to physical stores from its online channels by prioritizing the collection of orders in its stores. And all of this is supported by the application of the latest technologies in logistics, radio frequency control [for stock registration] and augmented reality.”

A useful strategy for any company

Experts agree that the size of the company does not matter when it comes to implementing omnichannel. “In fact, it will be easier to implement it in a small and medium-sized enterprise (SME) or a start-up, since it will not have all those layers of bureaucracy, processes, and policies typical of large companies that make it difficult to redesign the customer’s shopping experience so that it can jump nimbly from channel to channel,” says Katime, a partner at EY.

This expert believes that few companies focus correctly on this strategy, whose objective should be to eliminate frictions and barriers that the customer may encounter. “If the driving force behind implementing it in the company is only to sell more, it is implicitly saying that it doesn’t matter what the consumer thinks, and this is what unfortunately happens on many occasions,” he stresses. The increase in sales, far from being the ultimate goal, is just one more benefit that comes as a result of its correct application.

The omnichannel in small commerce

The adoption of this strategy is an excellent challenge for all types of businesses. According to Deloitte’s Soler, its implementation requires learning how to efficiently exploit the data provided by the channels to make decisions, adapting and making the supply chain more flexible, innovating in customer interaction, and training personnel.

Faced with the onset of the pandemic, retail, however, has had to make a virtue out of necessity. “During the strict confinement, many entrepreneurs launched sales through websites and social networks, implemented new forms of payment such as Bizum, sold directly through WhatsApp, or increased their presence on platforms such as Instagram, making live broadcasts with their customers,” Campo points out.

“Now it’s time to analyze these tools, which are quite widely used in companies, especially to deal with queries and gain visibility,” admits the president of the CEC. However, “the purchasing process usually ends in the physical store,” emphasizes the expert, for whom this is the essence of this type of business. For this reason, retailers advocate an omnichannel system in which the traditional and digital channels complement and enhance each other without one replacing the other.

Original source: El pais.com

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