Amazon’s Unexpected Move

Amazon, the world’s largest e-commerce company, began secretly opening the first of 20 planned retail convenience stores under the Amazon Go name in 2018.

In 2015, Amazon created Amazon Books, a chain of physical bookstores. It bought Whole Foods, a high-end organic grocery store business, two years later.

Observers were not surprised, as Jeff Bezos has previously revealed his intention to open a physical store in 2016. Still, why would a billion-dollar, wholly internet company take such a risky step?

According to Natalie Berg, author of an Amazon business book, Amazon sees the future of retail as “mixed.” Customers may prefer online to offline, or vice versa, but they rarely do so separately.

Berg also believed that focusing on physical storefronts would help Amazon break into the fashion retail market and save shipping costs, as well as pricey returns from unhappy customers.

Perhaps Amazon had foreseen something before countless other e-commerce success stories. The COVID-19 pandemic, however, revealed the full depth of this potential.

Let’s fast forward to the year 2020.

The first two quarters of 2020 saw a consistent flood of retail-related bad news. During the pandemic, global brands crumbled and were forced to file for bankruptcy protection.

Neiman Marcus is a department store in New York City. JCPenney. J. Crew is a brand that sells clothing. GNC. Brooks Brothers is a brand of men’s clothing.

Inditex, the European retail behemoth, said in June 2020 that it would liquidate over 1,200 locations worldwide due to a 44 percent drop in first-quarter revenues between February and April 2020. To offset these losses, it plans to bring its biggest brands, such as Zara, Bershka, Pull & Bear, and Massimo Dutti, online and use omnichannel strategies.

This is the point at which the plot twists.

While many brands struggled during the pandemic because they were unprepared for digital and e-commerce, Inditex used omnichannel and saw digital sales increase by 74% in the first half of 2020. Inditex also stated that some time before September, it had received one million online orders in a single day.

Target, a department store operator in the United States, used omnichannel to promote bargains on its website and provide same-day services including Drive Up, Order Pick Up, and Shipt.

Target recorded record sales and earnings in the second quarter of 2020, with a 24.3 percent increase in sales and an 80.3 percent increase in profits. Meanwhile, digital sales had increased by 195 percent, thanks to internet ordering.

Integrating its physical and digital retail selling skills yielded significant benefits (for example, online ordering and store pickup).

Target also discovered that multi-channel shoppers spent four times as much as store-only shoppers and 10 times as much as digital-only shoppers. It was also determined that Target’s physical locations fulfilled more than three-quarters of its internet transactions.

Taking The Risk

These are heartening tales. They envision a “blended” future that includes both offline and online shopping, as well as physical storefronts and e-commerce. In this regard, omnichannel may be the next great step forward.

Why does this matter in this context?

Because, as these studies reveal, customers have discovered and enjoy omnichannel.

Consumers who are tech-savvy will grow to expect it.

One thing to be clear about: omnichannel is not the same as multichannel. You’re online if you have both physical and digital stores. However, you aren’t really running an omnichannel firm if the customer experience isn’t connected between the two.

Furthermore, because of the supply chain complications that omnichannel brings to the table, there is genuine industry apprehension. According to Stridec Marketing Manager Ella Bugayong-Pabellano, who has worked in retail for years, sales and marketing must combine with inventory management, warehouse fulfillment, and IT.

With the right IT partners that can handle both supply chain and front-end customer relationship management, omnichannel is a viable option (CRM). One of the most significant advantages of this leap forward is the opportunity to learn more about The New Customer of 2021.

To chart The New Consumer’s path to buy in this new Age of Privacy, innovation and sensitivity toward new customer data-gathering norms will be required.

The top retail businesses in the Philippines are already taking moves toward this probable future. And we know of at least one company that is working to make omnichannel a reality.

However, omnichannel isn’t just for the fashion industry. It is applicable to B2Bs as well as service industries such as banking.