Omnichannel comes of age with new index

BY Dan Berthiaume

WASHINGTON — The National Retail Federation (NRF) and e-digital consultancy FitforCommerce are launching the Omnichannel Retail Index to help retailers benchmark against industry best practices.

This first-of-its-kind bi-annual report examines 120 retailers across multiple categories and their use of omnichannel strategies across web, mobile and store. A variety of strategies that align back-end systems to provide a consistent front-end experience across all channels, including buy online pick up in store, real-time inventory availability and mobile optimized websites.

In July 2015, FitForCommerce used a mystery shopping method to evaluate specific omnichannel offerings and capabilities across Web and mobile sites, as well as in-store.

Some of the key findings in the report include:

  • Half of the bricks-and-mortar Index retailers show in-store product availability on their product detail pages;
  • Another half let customers look up in-store inventory on their mobile device;
  • 23% offer buy online pick up in store options for their customers;
  • 84% let registered customers see a bag or a cart that is consistent across different platforms;
  • Nearly half of multichannel retailers provide in-store signage designed to educate shoppers about their omninchannel offerings (buy online pick up in store, reserve online, etc.);
  • Three out of five retailers in the Index offer “save for later” functionality with their online shopping cart;
  • Half of the retailers offer free return shipping; and
  • Three-quarters of the retailers in the Index offer a “click to call” service feature on their mobile websites.

The establishment of this index, especially with the leading retail trade organization as a founding partner, demonstrates that the age of omnichannel has truly arrived. “Omnichannel” has essentially come to be a synonym for modern retailing, which out of necessity must meet the needs of constantly connected customers whose lives cross between physical, online and mobile channels.

“In an increasingly competitive landscape, retailers are taking a truly customer-centric approach to running their business and developing innovative solutions to meet their customers’ expectations,” said NRF senior VP and executive director Vicki Cantrell. “The Omnichannel Retail Index provides the industry an in-depth and practical method to benchmark their organization’s initiatives in the digital space against best practices from around the industry and all the methods that exist when it comes to how customers engage with brands across all touchpoints.”

The industry is approaching the point where omnichannel becomes as assumed a capability as basic e-commerce, with the Internet of Things (IoT) on the horizon as the next emerging retail IT practice. Historically forward-thinking retailers such as, which is enabling automatic shopping via smart device with its Amazon Dash service, are already starting to offer IoT-based retailing.

"Brands and retailers need to or already are concentrating enormous resources on enabling the omnichannel customer, whether the brand or retailer calls it omnichannel or not,” said Bernardine Wu, CEO of FitForCommerce. “The Omnichannel Retail Index is a guide for vetting business cases and prioritizing investments, especially because today’s innovations become tomorrow’s best practices, which become the next day’s table stakes.”

The next index is slated for release in 2016. The NRF-FitforCommerce partnership may lead to future content, research and thought leadership in omnichannel.


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Which area of the industry do you think Amazon's entry would shake up the most?

Supervalu CEO to retire at end of fiscal year

BY David Salazar

MINNEAPOLIS — Supervalu announced Thursday that CEO Sam Duncan has informed the company’s board of the directors of his plan to retire on Feb. 29, 2016 when the company’s fiscal year concludes. Duncan took over as Supervalu CEO in 2013 following the company’s sale of five retail grocery banners to Albertsons, and he has 46 years of experience in the grocery and retail business.

“Supervalu is a terrific organization and we have accomplished a great deal together during the past two and one-half years,” Duncan said. “I have thoroughly enjoyed working with our employees and thank them for all of their hard work and dedication. I am also looking forward to finishing the year strong and continuing to drive sales and cash through my remaining time at the company, as well as providing time and support to ensure a smooth transition for my successor.”

Supervalu’s non-executive chairman Jerry Storch credits Duncan with turning the company around since he took over, repositioning the company’s three core business segments — independent business, Save-A-Lot and Retail Food banners.

“Sam has made a tremendous contribution to SUPERVALU during his tenure as President and CEO,” Storch said. “The company is in a better place today because of Sam’s leadership. The Board is very grateful and appreciative for Sam’s contributions to the Company.”

Accompanying the announcement of Duncan’s retirement is the news of a new CFO and COO for the company. Supervalu’s Bruce Besanko is now EVP, COO of the company, and Susan Grafton is the company’s EVP, CFO. Besanko will oversee the company’s independent business operations and the Retail Food banners, as well as merchandising, marketing and pharmacy operations. 

“I’m very pleased that Bruce has been promoted to the role of COO for our Company,” said Duncan. “He has done a superb job as CFO for SUPERVALU, working with me and the leadership team on all aspects of the Company’s turnaround success. Additionally, we are very fortunate to have Susan in our ranks as someone who can step right into the CFO role. She has a tremendous financial background and has been instrumental in helping us reposition our financial organization and the overall business over the past one and one-half years.”

Storch said that a search is currently underway for Duncan's successor.


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GMDC: Exclusive products, differentiated marketing key to capturing today’s shoppers

BY Richard Monks

Consumers are continuing to view shopping in new ways, and experts say retailers need to adjust their merchandising efforts to keep up with the dynamics of this rapidly evolving market.

“The modern-day shopper is looking for a unique message that speaks directly to them,” Edgewood Consulting Group account director Bernie Wojtas said during a recent Global Marketing Development Center Infocast webinar on merchandising differentiation. 

With online shopping, an increasingly competitive brick-and-mortar environment and a host of other options available for customers, creating a notable point of difference and making shoppers feel that a store understands them is more crucial than ever, Wojtas said during his 40-minute presentation, titled “Successful Merchandising Differentiation in an Ever-evolving Retail Landscape.”

Wojtas and GMDC director of insights and communications Mark Mechelse, who hosted the lunchtime webcast, noted that consumers’ shopping experiences and what they expect from retailers continues to evolve and bears little resemblance to what it was just a few years ago.

“Shoppers are seeking a more personal connection to products they use,” he said. “Especially in recent years, they are looking for the notion of exclusivity. They want products that are personally designed for them.”

With some analysts estimating that between 20% and 25% of the products found on store shelves today will only be available online by 2020, it is critical for retailers to optimize their mix. However, Wojtas and executives at GMDC warn that merchandising optimization is not the same as merchandising differentiation.

Despite retailers in every channel working diligently to offer the right products and set themselves apart from the competition, the majority of these efforts have focused on varying assortment and/or pricing strategies, Wojtas said. In recent years, however, the importance of merchandising and so-called “shopability” have taken on more significance as retailers look for ways to stay competitive and levels of shopper loyalty continue to erode.

“Merchandising is first and foremost about optimization,” Wojtas said. “We all spend countless hours optimizing assortment, pricing strategies, navigation, what mix we have on the shelf and other things like promotion. But, since everyone is optimizing well, nobody really stands out. The target has to be optimization and differentiation. Optimization and differentiation drive efficiency and effectiveness.”

The emphasis that retailers have put on merchandise optimization and the growing number of shopping alternatives that have sprung up in recent years has led to an erosion of consumer loyalty, he said, and it is essential for retailers to find ways to get that loyalty back.

One of the best ways to do that, he stressed, is to create a memorable shopping experience, employing a wide range of technology and sensory experiences that make customers feel that the retailer truly is offering something unique, giving them a reason to return to that store.

“Engage shoppers and bring go-to-market strategies to life through visual, personal solutions,” Wojtas said, offering the experience of a retailer who used a combination of unique lighting, signage and displays to transform an ordinary men’s grooming aisle into a “Man Zone” as an example of how to make a lasting impression on shoppers and help make them repeat customers.

“This is how a traditional retailer can compete versus e-commerce retailers who don’t have the luxury of connecting with shoppers on a multisensory level,” he said.  

The other key to providing shoppers with unique and memorable experiences, Wojtas noted, is to reach consumers across a wide range of touchpoints. As shoppers have become extremely dependent on technology for research, advice and feedback, merchandising vehicles that take advantage of this phenomenon can prove highly effective, he said.

Like so many past marketing and merchandising innovations, these efforts require collaboration between retailers and suppliers, Wojtas said, noting that a growing number of vendors have begun to embrace this new approach to merchandising.

“Retailers are moving from best practices to next practices,” he said. “Historically, conversation concerning merchandising circled around optimization. Now, optimization is considered a cost of doing business.”

However, he said, only a handful of these retailer-supplier collaborations have been able to make the most of the multiple touch-point strategy that is required to achieve differentiation.

“The reality is that customers see multiple touchpoints acting independently,” Wojtas said. “Retailers’ channel knowledge and operations exist in technical and functional silos.”

Ideally, he said, customers will view multiple touchpoints as part of the same brand, and retailers will develop “a single view of the customer but operate in functional silos.”

However, what Wojtas terms the “nirvana” scenario will see customers experiencing a brand, not a channel within a brand as “retailers leverage their single view of the customer in coordinated and strategic ways.” 

As essential as creating a unique and personalized experience is to ensuring that retailers continue to attract shoppers into their stores, even the most Herculean efforts will fail if they are not executed well, he said. 

Wojtas said that if retailers and suppliers adhere to what he calls the four Es (exclusive, experience, ever present and execution), they will stand out in the marketplace and move beyond just optimization and into differentiation. Doing so, he stressed, will help them maximize sales and margins, grow their return on investment, increase shopper loyalty and increase conversion rates.

Ultimately, he said, this strategy will allow retailers to stay ahead of the competition.

“The future is in optimization and differentiation,” Wojtas said. “That will determine retail winners.”

Cick here for a PDF of this story, including more charts. 


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Which area of the industry do you think Amazon's entry would shake up the most?