A long path to unified commerce
From a barter exchange of surpluses to shopping as entertainment
Dawn of commerce
Around 8000 years ago there was a transition in the primitive society. A hunter-gatherer society turned into farmers. They could produce enough goods not only for survival purposes but also surpluses available for sale or exchange. This gave a start to supply chain and trading places development, and a merchant class emerged.
Between 8000 and 3000 BC trade grew rapidly. As a greater diversity of goods became available and therefore tradable, a value method beyond bartering came about: money. It became the universal medium of exchange and the fuel behind the shopping experience.
In medieval Europe commerce has got a new form. As a transport between towns and settlements developed, marketplaces and fairs were organized. They lasted for weeks and attracted tradesmen from the far lands. Those were the first prototypes of shopping malls as we know them today. Fairs gained popularity and spread throughout the world.
Industrial Revolution
The Industrial Revolution had a huge impact on the retail landscape. Industrialization dramatically reduced the amount of manual labor thus brought people the mass production of inexpensive products. Mom-and-pop and manufactory shops were replaced by specialty shops and department stores. As these new retail formats emerged, storefronts replaced market trading, and the concept of brand identity was born. Retailers needed to establish an identity for their stores. They were building direct manufacturing relationships, obtained exclusive rights to sell certain products and became less reliant on national brands that subjected them to price competition.
Retail brands have changed the game. People were visiting chains dedicated exclusively to particular brands. These shops formed new avenues, what we now call “high-streets”. By the early 1900’s chain stores led a dramatic restructuring of the retail industry, setting off an unprecedented wave of expansion across all types of merchandise classifications. For the first time, shopping became a form of entertainment.
In the middle of the 19th Century, it was the first time when thousands of goods were available for purchase under one roof. This formed a shopping experience of nowadays. 1930’s brought us first supermarkets and shopping malls. Later on, there were convenience stores with extended hours of operation. Department stores transformed to shopping centers, supermarkets to hypermarkets. After WWІІ, we’ve seen a rise of Big Box retailers: Wal-Mart, Kmart and Target. Today, the retail landscape has evolved again with online shopping.
Rise of e-commerce
In 1980’s millions of Minitel terminals were lent for free to telephone subscribers in Great Britain and France. Users could make online purchases, make train reservations, check stock prices, search the telephone directory, have a mail box, and chat in a similar way to that now made possible by the Internet. It was the most successful predecessor of the Internet. And those mail orders were a prototype of e-commerce.
In 1994, the Internet appeared and a year later Amazon.com has sold its first book online. It was an official start of a new era in retail — e-commerce. Here are some of the significant changes influenced by e-commerce:
- logistics development;
- online payments;
- transparency in price competition;
- improved suppliers’ inventory accuracy;
- taxes policies changes.
But the most important change influenced by e-commerce is a raised bar of customers’ expectations from retail experience.
From multichannel to omnichannel
Online stores became an additional sales channel for traditional brick-and-mortar retailers along with catalogues, kiosks and other meanings to sell goods. Customers were opted either to buy product in-store or online, order through a catalogue or using a self-service kiosk. A lack of systems integrity and pricing wars between online retailers and brick-and-mortar stores caused different products availability and pricing online and in-store. Separate channels that don’t know too much about each other and don’t care about consistent customer experience — that what multichannel retail is about.
The main trouble with multichannel is customers don’t think with channels, they think with brands. They want a seamless experience when shopping in-store or online, using a smartphone in public transport or on a big screen at home. Savvy retailers started to stitch channels in order to ensure that their customers receive the same experience through different touchpoints and devices involved within interactions with their brand. In omnichannel retail, there is no such term as channel cannibalization, no pricing mess, no stock inaccuracies.
Unified commerce
While retailers are trying to piece processes and systems together, they are over-promising and under-delivering on the customers’ desired channel-agnostic experience. Retailers can no longer afford to think channels. Now is the time to think about contexts and services.
Unified commerce services
Here’s a list of services customers are now expecting from their commerce experience.
Buy online, pick up in store
Delivery service is convenient. But sometimes it’s more handy to pick up merchandises in-store on the way home than to stay homebound during a two-hour delivery window.
Reserve online, pick up in store
Planning shopping online is gaining momentum. It’s good to know that you can reserve products in-store before visiting it. Going to the other side of the city to know that a product is already sold is a big disappointment.
Buy online, ship from store
A young lady walking past a shop window notices a dress she loves. She’s got no time so she decides to check this dress online later. After viewing product pictures and customer reviews she decides to buy it. During checkout, she notices that delivery takes 2–5 business days. Does it take so long to bring a dress from the store across the street? Experience is broken. Customers don’t want to know about retailers internal processes, warehouses and distribution centers. If they see a dress in a store across the street, they expect it to be delivered as soon as it takes to bring it from this store.
Buy in-store, ship from warehouse
Stores have a limited space. So there’s often no possibility to accommodate all the assortment available for sale in-store. But the physical store is still a place where customers go to see products live, feel the materials, talk to an assistant. If a customer wants to buy a product that’s not available in store but is available on site or somewhere else, don’t make him go to another store or channel. Create an order to be delivered to his home from a warehouse, another store or vendor.
Buy anywhere, ship anywhere
Days when visiting store was the only way to do shopping have gone. Customers buy goods using their smartphone in the subway, a tablet in a cafe, a laptop at work, a smart-TV at home etc. There are now plenty of possibilities and contexts. Retailers can’t restrict customers’ freedom of choice concerning methods of purchase and delivery. They need to make sure that whenever and wherever customers makes a purchase they receive a good and consistent experience.
Returns across channels
When it comes to returns customers are often forced to return merchandises through the channels they were bought. The trouble is there are no channels in customers’ world, only brands. So it’s hard for them to understand why do they need to send a package back to the warehouse by post when it’s more convenient to leave products in a store nearby.
Inventory visibility across channels
Instead of struggling with webrooming retailers need to tame it. Preliminary product investigation allows customers to make a purchase decision faster in-store. It’s always good to know that a product is available in a local store before visiting it. So inventory visibility across channels makes a shopping process more pleasant.
Order visibility across channels
Unfortunately, annoying services know more about cross channel experience than retailers. When I search for something on my smartphone an advertising then follows me on my laptop and tablet. But when I place an order online nobody in the store knows anything about it. Orders history, viewed items, abandoned carts — all this information must be available for shop assistants to provide a customer with a seamless brand shopping experience.
There is still a lot of work for retailers to provide a seamless channel-agnostic commerce experience. But it’s worth the effort. Those who succeed to satisfy growing customers’ expectations will see an important profit increase.
This is the second article in Retail Transformation series. Please, share your opinion on unified commerce services. And don’t forget to subscribe not to miss our next article “Hybrid retail spaces”.
