Build touchpoints and they will come: transitioning to omnichannel retailing

Abstract

Purpose The purpose of this paper is to provide an analysis of a major retailer’s transition to omnichannel retailing (OCR) from an existing multichannel retailing (MCR) base. Using the illustrative case of Seven & I (S&I) Holdings, the paper positions OCR in terms of its goal to provide added customer value through a seamless brand experience. Design/methodology/approach The research uses a case study methodology, based on a series of in-depth interviews. Executives at S&I were interviewed as the core of the case, and supporting interviews were carried out with executives at Yamato Transport, Inditex Japan and Rakuten. Data collected in interviews were cross-referenced to industry and trade press reports, providing an illustration of the motivation and strategic decisions behind the transition to OCR, and of factors that have direct impact on the implementation of the model. Findings The results illustrate the difficulty in achieving OCR in terms of unifying customer experience across multiple channels. The case demonstrates the potential for cross-channel integration through multiple, but integrated touchpoints, and the leveraging of existing multichannel retail infrastructure and systems. In addition to confirming previous conceptual understanding of the transition process, the core findings demonstrate the importance of the strategic implementation process, the importance of the retailer’s brand portfolio and brand management, and the need to adjust and leverage existing facilities and infrastructure. Research limitations/implications The study is limited by the single case employed, although the complexity of OCR implementation does not take away from the practical implications in a broader sense. It could be argued that the Japanese retail industry has some differences to other markets, but the customer-orientated nature of S&I’s implementation, and its aim to leverage existing infrastructure, is illustrative for similar strategies of retailers elsewhere in the world. Practical implications The study has value to both researchers and practitioners as a structured synopsis of an actual case of transition, and adds to the literature that relates to OCR and to Japanese distribution. It demonstrates not only the need for robust supply chain, logistics, IT, marketing and retail infrastructure, and integration across distribution systems, but also the importance of the retailer’s brand portfolio, which may need significant adjustment to best promote added customer value. The success of S&I is predicated on both the high population densities, characteristic of the Japanese market, and a strong, longstanding MCR base. Similar systems and implementation issues apply to other markets that operate under similar conditions. Social implications The social implications of the paper relate to the fact that, although the transition to OCR may be a difficult, costly, and time-consuming proposition for a retailer, increasingly consumers are coming to expect both informational and purchasing options for brands to be available as, when and where they want them. The 24-7 nature of omnichannel also generates significant challenges in terms of work volumes and environmental impact. These issues are touched upon this paper. Originality/value This paper provides a case of a major and well-known retailer and the transition process towards an OCR model, of which there are currently few case studies available. It also adds significantly to the body of literature relating to Japanese distribution and provides insights into strategy not generally known in the English-speaking world.

Exploring trends, implications and challenges for logistics information systems in omni-channels

“…The importance of developing IS for omni-channels has been recognized in the literature (Kembro et al, 2018). Larke et al (2018), for example, noted the need to coordinate information 386 IJRDM 47,4…”

Switching Marketing Channel in the Purchase Process – What Pushes Consumers to Change Behavior

“…Another researchers claim that the offline beliefs, attitudes and behaviours make a strong impact on online loyalty [16]. However, the phenomenon of marketing channels proliferations as well as touchpoints [11] and the reality of shifting from multichannel retailing towards omnichannel retailing [17] create more and more opportunities for the buyer to change channels in the purchase process. It seems that the more possibility to change marketing channel the biggest influence of any potential factors on channel switching.…”

Look Before You Leap: Economics of Being an Omnichannel Retailer

“…These heterogeneities would not have any impact had the omnichannel retailer been able to offer the product at the same price as its non-omnichannel peers, as availability of additional flexibility at no additional cost would have pushed all the customers to the omnichannel retailer. However, becoming omnichannel entails additional cost to be incurred on top of the cost of operating individual channels in isolationto bring the two sets of services into a bouquet of integrated services (Larke et al, 2018;Hossain et al, 2017). The retailer needs to enhance its supply chain capabilities, augment logistics competence, improve operational efficiency, increase visibility across channels, and ensure perfect integration between channels (Hansen & Sia, 2015;Simone & Sabbadin, 2017).…”

“…As provisioning of additional convenience comes at a cost, "designing [omnichannel model] to achieve optimal value requires improvements in service to the level at which the customer is willing to pay for the additional cost of that service" (Larke et al, 2018). Thus, an omnichannel retailer faces the issue of deciding how much flexibility should be provided at what cost so as to attract a sufficient number of customers at the increased price.…”