Wal-Mart and Friends Get No Love From Online Buyers: Cue Amazon?
These days, consumers are a hard crowd to satisfy. Thanks to companies like Amazon.com (NASDAQ:AMZN), customers expect a lot — an expertise in both brick-and-mortar and online retail — and if and when retailers fall short, they suffer a plunge. Companies like Target (NYSE:TGT) and Wal-Mart (NYSE:WMT) have worked furiously to beef up their online presence and put them on the same playing field as Amazon, but recent reports still indicate that customers are not satisfied, and that could result in them doing even more business with Amazon.
According to Retailing Today, Forrester Consulting recently interviewed 256 decision makers from retail and manufacturing organizations in the U.S., the United Kingdom, France, and Germany, along with 1,500 omnichannel shoppers, and found that retailers are not meeting customers’ demand for a smooth, integrated shopping experience both in stores and online. Consumers desire a more sophisticated omnichannel experience, and experts believe that the current organizational and technological challenges retailers are facing are keeping them from effectively meeting that demand. This, in turn, gives digital leaders like Amazon even more room to solidify their online businesses, and discourage customers from brick-and-mortar shopping.
Wal-Mart and Target certainly aren’t the only retailers navigating the current organizational, operational, and technology challenges that many companies face, but they’re the easiest example of how even some of the most powerful corporations are facing difficulties as they try to move forward and develop their businesses online. Considering the Forrester survey also found that 71 percent of shoppers expect to view in-store inventory online, and 50 percent expect to buy online and pick up their purchases in physical stores, according to Retailing Today, retailers have a lot of work to do if they ever want to meet that demand.
Currently, Retailing Today says that only one third of the retail decision makers surveyed said that their companies are able to provide customers with in-store pickup of online purchases and online visibility of inventory across the channels.
Back in January, Wal-Mart global e-commerce CEO Neil Ashe said in a private interview at the World Economic Forum that Wal-Mart would be able to match the e-commerce might of Amazon within two years thanks to the expansion of new warehouses across the country used to distribute online orders. The Bentonville, Arkansas-based company recognizes that Amazon, one of its main rivals, significantly outcompetes Wal-Mart when it comes to its online business, and that’s a reality that the retailer is trying to change as it works to augment fulfillment from existing stores and distribution centers with online-only facilities, allowing online orders to be met faster and more efficiently. That is Wal-Mart’s way of trying to overcompensate for Amazon’s free and sometimes same-day delivery.
However, many consumers, investors, and analysts are still very skeptical that Wal-Mart can ever match Amazon’s online retail power, and furthermore, some don’t even expect it to get close anytime soon. That’s because Wal-Mart still needs to concentrate on its struggling brick-and-mortar division, and it’s thus safe to say that the company’s executives have a lot on their plate. Still, Retailing Today highlights Chris Donnelly, global managing director of Accenture’s Retail Practice, who maintained that, “Thirty nine perfect of customers surveyed say they are unlikely or very unliekly to visit a retailer’s store if its website does not provide physical store inventory information,” so it would appear as though time is of the essence. If a retailer’s online presence dictates how many customers will end up visiting its physical store, it’d be a mistake to put that online issue on the backburner.
The issue is not necessarily a lack of will to get a company’s online business sorted out. Rather, it’s a lack of expertise. Retailing Today reports that many companies are currently struggling to integrate back-office technology across all of their channels, and that results in their inability to provide customers with an accurate view of real time inventory across stores and distribution centers — something consumers evidently really want. Brian Walker, chief strategy officer at hybris, maintained via Retailing Today, “As customers expect retailers to provide consistent and contextual service across every channel and interaction, retailers need to adopt new technologies that enable this critical transformation to omnichannel customer engagement and service. This is going to be vital to meeting customers’ expectations and, frankly, survival for retailers.”