The End of Mobile Commerce: Why Retailers Haven’t Nailed Omnichannel Yet

Smartphones are now a driving force for omnichannel and e-commerce adoption across the world, transforming the way consumers shop and interact with brands. However, in their efforts to reach consumers in every channel and beat the competition, many brands are missing the mark with mobile commerce. Retailers often regard mobile as a separate commerce engine instead of focusing on delivering a seamless commerce experience across all channels and touchpoints.

The Problem With Branded Mobile Apps
Branded apps are a prime example of the mobile challenge. Very few retailers have been able to sustain a successful mobile app because it requires too much work for consumers to access, update and manage. Furthermore, very few mobile apps actually provide value to consumers, which results in low download and engagement rates.

A study by Deloitte found that 80 percent of branded apps have been downloaded less than 1,000 times. Despite these depressingly low download rates for the majority of branded retail apps, companies are still investing heavily in this market.

The reality is the future of mobile shopping isn't branded mobile apps. In fact, it's not mobile commerce at all, but rather omnichannel commerce. While many brands use this buzzword and understand the intent, the majority are facing up to the challenges to become truly omnichannel.

According to recent research from Accenture, only one-third of retailers have operationalized even the basic features of an omnichannel retail experience, including in-store pickup for online orders, cross-channel inventory visibility and store-based fulfillment. Among those brands that do get on board, they soon face the typical transition challenges of getting accurate inventories from their stores, enforcing pickup and delivery procedures in stores not used to doing this, and improperly incenting store personnel to execute against the high expectations of online customers.

Even though most retailers are ill-equipped when it comes to omnichannel features, consumers demand these capabilities. An eBay study found that 77 percent of shoppers expect a seamless, integrated experience regardless of whether they're in-store, online or using a mobile device. Additionally, Forrester Research discovered that 71 percent of shoppers expect to view inventory online, and 50 percent expect to buy online and pick up in-store.

This is a worrisome scenario for retailers which fail to implement omnichannel initiatives. Companies that don't meet customer expectations online and offline face declining revenues and profitability.

How to Bridge the Omnichannel Gap
To overcome these challenges and transform retail businesses in an omnichannel environment, companies need to bridge the gap between mobile and other online and offline channels. There are several steps retailers can take to do this:

1. Branded mobile technology for in-store associates: Even though most branded retail apps gain little traction among consumers, it's the audience retailers typically focus on. Instead, retailers should shift their priorities to focus on empowering in-store associates with mobile technology.

Armed with mobile and tablet technology that's tied to the retailer's core commerce platform, in-store associates can offer shoppers more valuable assistance. With access to product information, customer history, preferences and wish lists, and inventory levels right at their fingertips, retail associates are better equipped to drive sales and create a more engaging customer experience.

In-store associates can also use mobile and tablets for checkout capabilities that are based on the commerce platform. While mobile queue-busting point-of-sale technology has been around for some time, a clienteling experience that can be instantly converted to checkout anywhere in-store via mobile is a game changer. As a result, 30 percent of retailers plan to change or revamp their POS system to a mobile-enabled, commerce-driven alternative in 2014, according to industry estimates.

2. Single, unified back-end technology platform: One of the first and most important steps in building an omnichannel experience is unifying all existing technology platforms in an organization. Stand-alone technology platforms that don't work in unison compromise the customer experience and make it difficult for retailers to transform their offerings to meet customer expectations.

To keep up with changing consumer demands and the fast-paced nature of an omnichannel retail environment, brands need an easy to manage back-end technology system that allows them to update content and promotions in real time. It should also incorporate advanced analytics capabilities to give brands insights into consumer behavior and provide a more personalized shopping experience in every channel.

3. Cloud technology: In addition to consolidating technology systems, retailers can also take advantage of cloud-based or hybrid cloud solutions they can access and manage from any device.

Private or public cloud technology enables retailers to improve lead tracking, sales metrics and cross-channel conversions by linking internal data with other sources such as social data that influences the shopping experience. This includes converting web traffic and social interactions into store traffic as well as measuring promotion redemption of online offers in brick-and-mortar locations. With cloud technology, retailers can also connect to a central data storage repository and sync data and content on the go.

Transitioning to the cloud is a catalyst for converging digital and physical commerce. As more retailers make the shift, omnichannel selling will become easier and more sophisticated.

4. Organizational alignment: According to Forrester Research, 60 percent of all U.S. retail sales will involve the internet in some way, whether as a direct e-commerce transaction or as a way for shoppers to conduct research before purchasing. The same study found that approximately 10 percent of total retail sales in the U.S. in five years will be made online, up from 5 percent in 2012.

While e-commerce sales are contributing to an increasing portion of overall revenue for many major retailers - far outpacing brick-and-mortar sales growth - most retailers' organizational structures have yet to follow suit. Many retailers still rely on outdated corporate structures with disparate organizational and technology siloes.

To ensure success in an omnichannel environment, retailers need to realign their existing processes and systems. Then they can focus on hiring a talented head of omnichannel, who can spearhead other cross-channel initiatives that improve the customer experience and foster long-term innovation and growth.

In the future, mobile commerce will evolve into a truly omnichannel experience. Mobile apps will be lighter - a blend between today's apps and a completely online experience. By following the steps outlined above, retailers can prepare for this shift and stay ahead of the competition. This will foster a more seamless, omnichannel shopping experience that delights customers, improves profitability, and streamlines internal processes and structures.

Rick Chavie is the chief solution officer at hybris, a software company that sells enterprise multichannel e-commerce and product content management software. Rick can be reached at rick.chavie@hybris.com.