As more and more brands introduce and enhance omnichannel capabilities within their technology stack, many still find themselves struggling to recognize the value they were initially targeting with these technology improvements. 

This may be due to many things, such as basics like workflow and configuration decisions, but that is an easy adjust-and-measure solve. Some brands may be experiencing adoption, accurate usage, and feedback gaps that would have been solved up front with a change management and organizational readiness strategy. That can be a bit more difficult to resolve reactively, but it can be addressed with a clear plan and some user investment. 

The hidden challenge that continues to disrupt the performance optimization of your new capabilities may very well be that you are now an omnichannel-enabled company without an omnichannel-aligned organization. 

In other words, you implemented changes to unify your supporting technology to remove silos and make you largely agnostic to individual channels, but your organization may still have departments dedicated to specific channels, which can greatly limit accomplishing the desired results.

Common Omnichannel Organizational Alignment Gaps

Inventory Planning and Allocation

Omnichannel fulfillment capabilities—storing inventory across your network of stores, distribution/fulfillment centers (DC/FC), suppliers, or other entities—are intended to enable customers to shop how they want and when they want, and have the product delivered where they want, while keeping fulfillment costs as low as possible. If your margin across your total fulfillments is still suffering, the knee-jerk reaction is to look at the order sourcing and allocation logic in your order management system (OMS) and to tweak those configurations to make some optimization. 

However, if you take a step back and look at your network, the challenge may really be that your inventory is not sitting in the optimal locations to enable the desired benefits. Taking a second step back, you may now see that you have separate teams ordering and allocating inventory for your historic store and digital channels, with reporting that isolates their visibility to only digital or store demand. The result:

• Inventory for some SKUs, typically ones expected with high demand volume, is over-purchased, which erodes your margin in the long term as a result of markdowns, or even write-offs when the product is at its determined end-of-life.
• Unnecessary increases in ship-from-store fulfillment, which has an ignored cost that often makes this route more expensive than assumed. That is the cost associated with distributing that product from your DCs to stores with the intent of selling from stores, not fulfilling from stores. Items shipped from your DCs that have been received from your vendor shipments do not carry this additional cost.
• Increased split shipments due to the allocation of inventory across your network being too narrowly focused on a specific channel’s needs for their primary business.
• Increased ship-to-store (STS) orders for pickup when the inventory could have been planned for same-store buy online, pick up in-store (BOPIS) orders. At most companies, STS orders are still shipped parcel, so that cost at the unit level is often significantly higher than the distribution cost for planning those units into the target stores.
• Missed opportunities across channels. Most often, a shipment from a store to a customer can be considered a missed opportunity to your FC-allocated inventory when the shipment is a result of an inventory outage at those fulfillment dedicated facilities. However, sometimes the store proximity and efficiency is such that not shipping from those stores is a missed opportunity in total cost for some items. You may notice that SKU A is purchased for delivery at a high concentration in specific markets where you have stores, and you can take advantage of front-loading that inventory to those locations, even if in-store sales are low. Or, in the same situation, SKU A is typically paired with SKU B, which tends to be an online-only product. You may not only push some more of SKU A to those stores, but also some quantity of SKU B to ensure you avoid unnecessary order splits. You can even determine that those SKUs make it to the stores directly from your vendors to avoid that additional distribution cost. 

All of these, and other scenarios, can be addressed by reorganizing your inventory planning and allocation teams to work as one, viewing the business as a whole, and working more closely with your fulfillment operations teams to include their insights in the inventory decisions being made.

Pricing and Promotions

When your retail store and digital teams come in on Monday and discuss the prior week’s performance, especially after major campaigns, have you ever noticed that the traffic and demand may have met or even exceeded the team’s projections, but the associated margin was somehow less than calculated? How can this be? 

Thirty percent off of all items online should be an easy calculation to predict. Have you considered that enabling an omnichannel capability to set pricing and promotion changes centrally for all channels can result in unintentional overlaps when these channel-specific teams are not working together on a comprehensive plan? Someone in the store team may have created a bounceback offer for in-store shoppers to get an additional 20% off their next purchase, and those same customers are taking advantage of the deep online discount by stacking their additional discount that was provided to them through another channel. 

You can say that you just need to tighten up on your stacking rules, but that still feels short-sighted. Instead, if a centralized team was planning pricing and promotional changes, considering the total business and executing through your centralized tooling, they could make calculated, informed decisions around deliberate company-wide and strategic channel-specific plans. This would let you avoid undesired discounts, customer confusion around what applies to them, and the worst: customer surprises when a price benefit exists in stores, but not online, and the product they pick up with their buy online, pick up in-store (BOPIS) order is marked for a lower price than they paid online.

Customer Care

You’ve enabled purchase and fulfillment flexibility for your customers, and your stores are executing against their fulfillment duties, but your store customer satisfaction (CSAT) scores, net promoter scores (NPS), and revenue expectations are not aligning with your labor plan. But you planned your labor with intelligent tools, looking at store sales and operational requirements, including order fulfillment—so why the miss in performance? 

Are your store employees also taking on all service calls for the orders they fulfill, even for orders with no relation to the store other than that the customer tends to shop in that location normally and is accustomed to contacting the store for support? You could say that you’ll now consider that time in your labor planning, just to find out that the additional consideration allocates more time than desired to non-selling activities. Instead, consider leveraging your existing Interactive Voice Response (IVR) tool used at your customer care center to route calls associated with online orders to the customer care team to take advantage of employees specializing on call-in support for all of your other orders. 

You can even transfer most of your call-in traffic from the store to your centralized customer care team to ensure consistency and limit the non-selling impact to your store employees, allowing them to focus on sales activities and operations that support and drive new sales. Does this remove all customer service needs from the stores? No, of course not. It is an opportunity to centralize your primary service needs to the team that handles customer service cases as their primary role, which opens up productive time without necessarily adding resources to your stores.

Key Takeaways

Of course, there are more examples and opportunities beyond omnichannel fulfillment within your omnichannel marketing and advertising tools and teams, and deeper opportunities in omnichannel care and services groups. What’s important to take away is that buying and implementing the omnichannel-enabling technology is one step towards being an omnichannel company, as is a well-defined change management and organizational readiness strategy to ensure the appropriate adoption, usage, and feedback channels are available to maximize the experience for your users. 

If you don’t further take the time to realign your teams and departments to centralize and integrate their efforts on behalf of the whole company, you may struggle to accomplish the desired results targeted in your original omnichannel strategy.