forrester omnichannel2"Amazon is the leader and gaining every day in outpacing traditional businesses because they sell online." At least that's the conventional thinking. And yes, Amazon sales are increasing. But according to L2's Omnichannel Retail 2014 report, brick and mortar retailers are outpacing both Apple and Amazon in terms of e-commerce growth.


The increases are not just small upticks. In the first quarter of 2014, "e-commerce growth at Home Depot (54 percent), Costco (48 percent), Macy's (31 percent), and Walmart (30 percent) bested the great white shark of retail, Amazon, who registered sales growth of 20 percent." What's going on here is that these traditional retailers have taken advantage of the last 10 years (yes, it's been 10 years!) and have made strides in recognizing the role of online sales and customer behavior. 

What many retailers abhor is referred to as 'showrooming' where retail customers look at merchandise on the shelves of the physical store and look at their smartphone devices to find the same items at better prices. Amazon has fueled this practice and even on the company's new Amazon Fire Phone, provides a dedicate function to snap a photo of the product (not necessarily the UPC code). Amazon then finds the product available on Amazon.com and offers its one-click purchase. 

L2's report shows that the showrooming trend may be reversing as customers are becoming more familiar with online shopping. Consumers are now looking for products online even before visiting the physical store and making their purchases from home. Multichannel enabled retailers are making it easy for these shoppers to take advantage of their stores by offering in-store pickup in as little as 30 minutes. 

The biggest roadblocks to retailers cashing in on the multichannel purchasing trends (according to Forrester's study in 2014) are still lead by the retailers' lack of a business model that supports full implementation (50%). Of equal difficulty is lack of store associate training (40%) and integration of back-end technology (40%). Clearly there are organizational as well as technological hurdles that are likely to take yet another 10 years to overcome.

forrester omnichannel

The good news for retailers is that their physical store presence is becoming an asset as omnichannel retailing becomes a mainstream consumer practice. Overall integration of the business to merge the online and in-store operations should be the focus of top level executives so that line of business interests are consolidated rather than working at odds. Retailers that concentrate their efforts are likely to continue to ride the crest of the customers' interest.

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