Omnicommerce – From buzzword to business strategy
Omnicommerce proved to be a hot topic in the world of payments in 2016. Fast forward to the New Year and it’s still a leading point of discussion as businesses of every size find ways to provide consumers seamless, connected commerce.
After an exciting and eventful NRF Retail’s BIG Show 2017 – where we launched Vantiv OnDemand Payments – Ned Canning, our senior product manager, core innovation and eCommerce, sat down for a discussion on omnicommerce, including where the industry stands and, more importantly, where there’s room for growth in 2017.
Q: How should we define Omnicommerce?
The phrase itself (and its definition) has changed over the past few years. Originally, Omnicommerce referred to a combination of brick-and-mortar and online strategies that businesses used to promote sales and brand affinity among consumers. As newer customer touchpoints get rolled out, however, the definition of Omnicommerce expands – it’s now a strategy that combines both online and offline interactions to allow businesses to offer an enhanced, consolidated, and often on-demand consumer experience across numerous commerce channels. As web-based shops and stores become more popular, a large component of Omnicommerce will become the seamless consumer experience, regardless of the location of the actual sale.
Q: What is driving the demand for Omnicommerce?
In short, the growth and evolution of internet-capable devices has been a key driving force behind Omnicommerce demand – it all comes down to changes in consumer behavior. As mobile devices increase in both ubiquity and accessibility, consumers are streaming to a plethora of new touchpoints that are just starting to be understood and utilized by businesses.
Furthermore, as these devices are used to solve non-shopping or non-retail cases, the ability to incorporate a businesses’ influence into a customers’ daily life increases dramatically. For example, if refrigerators can provide shopping advice or coupon reminders to a consumer, that’s an entirely new access point that a brand now has to reach a consumer.
Q: Where is Omnicommerce going? Where might it end, if it does?
The demand for Omnicommerce offerings from merchants is continuing to expand as more consumer devices enter the Internet of Things (IoT) ecosystem. One of the biggest areas for growth at the moment looks to be connected cars – and this is only just conceptually starting to get up and running. To be honest, it’s really tough to tell at this early stage whether an ending is even in sight. If you think about it, I don’t know how many of us would have thought that a refrigerator would have been a significant consumer touchpoint. It’s the growth and broadening of devices and use cases like these that will result in Omnicommerce booming.
Q: Are there any immediate barriers to Omnicommerce growth?
I wouldn’t say barriers, but growth may be slightly tempered by security and privacy concerns – especially as more and more devices become seamlessly connected to brands, advertisers, etc. In this scenario, there’s always going to be pushback from consumers, often rightly so, as far as how much interaction and connectivity should take place. We’re seeing consumers show a greater understanding of both the pros the cons of connected devices. That said, we’re just barely scratching the surface on Omnicommerce capabilities and the room for growth is substantial.
Q: What makes Omnicommerce (and these new technologies and touchpoints) appeal to consumers?
There are three main points a commerce touchpoint needs to hit upon if it is going to appeal to consumers and significantly alter behavior. First, it has to be convenient; a quick access point where you can infuse payments and commerce in a seamless way, solving an everyday problem for a consumer. Secondly, it must be accessed through ubiquitous devices/technology that make sense for a merchant to address on from a strategic standpoint. Lastly, that touchpoint must be secure – consumers are getting more weary of connected devices, payments and commerce as breaches and hacks continue to proliferate the news.
Q: Are there security benefits to using mobile or web-based payments?
The simple answer is yes. What the industry is seeing is that the flagship mobile payments standards are very convenient and secure. However, as Omnicommerce evolves, the security concern becomes the devices through which personal and payments data is being passed – more often than not, you’ll find these are the weakest links. If you expand the nature of the connected devices consumers are using and, are often making transactions from, every single link in the chain needs to be secure. That said, fraudsters move fast – just like technology does. There is always going to be the need for renewed vigor and focus on security as the industry evolves to become more convenient for consumers.
Q: What use cases have gained the most Omnicommerce traction?
The buy online and pick up in-store use case is currently front and center. One of the main reasons being that online no longer means strictly desktop computers and a broadband internet connection. Regardless of what connected device a consumer is using, brick-and-mortar stores and online commerce are starting to become more compatible and convenient.
In fact, we can often tell what’s gaining traction by how people react when it’s not available. For example, I was recently taken aback when I tried to return an item of clothing I bought online at a physical brick and mortar store – and was unable to do it. This is a good example of what’s becoming the norm in Omnicommerce – the best omni players in retail are conditioning consumers to expect the best.
Q: Are there any other industries besides retail with successful use cases?
Aside from retail, I would have to say QSRs and fast food restaurants. Starbucks, for example, has a mobile system that’s tightly integrated with every store that’s around the customer to determine particular inventory. It will inform you what you can buy and tell you where you can get it. The tight integration is what provides this amazing customer experience, but the seamless experience hides how complex the integration is. Bigger picture, we’re seeing a marked increase in digital order sourcing as opposed to brick-and-mortar retail. Grocery also has a lot of runway for buy online and pick up instore capabilities – largely due to the fact that you can forecast many consumer purchases with accuracy and frequency.
Q: Can you discuss the impact of Omnicommerce on this past holiday shopping season?
Realistically, the biggest impact was seen in the migration of big retailers shifting the shopping experience from brick-and-mortar to digital retail. Consumers were voting with their feet during the holidays and moved online for improved retail experiences. The retailers that are adapting to this consumer change are reaping the benefits and seeing a rapid uptick in omnichannel commerce.