omnichannel - newstore...customer journey is greater than its parts. there has been bias by...

OmnichannelLeadership Report

2 0 1 9 - 2 0 2 0

An assessment of

over 200 luxury,

premium and lifestyle

brands’ omnichannel

competence.

I N T R O D U C T I O N 2

M E T H O D O L O G Y 4

E X E C U T I V E S U M M A R Y 6

O M N I L E A D E R S 12

D I S C O V E R Y 14

P U R C H A S E 18

F U L F I L L M E N T 22

C O N S U M E R E N G A G E M E N T 28

A S S O C I A T E M O B I L I T Y 32

C O N C L U S I O N 36

Contents

O M N I C H A N N E L L E A D E R S H I P R E P O R T 3O M N I C H A N N E L L E A D E R S H I P R E P O R T2

They’ve jumped through those hoops quickly and efficiently because they recognize we’re not in the midst of a trend - this is the future of retail. Omnichannel is strategic.

With the 2019-2020 Omnichannel Leadership Report, we aim to show how the sum of the customer journey is greater than its parts. There has been bias by retailers around certain services and solutions, such as mobile point-of-sale, customer relationship management and store fulfillment. But today’s shoppers expect the core capabilities and then some. The challenge is in having a truly differentiated omnichannel experience while staying true to your brand promise.

Omnichannel is strategic.

Let us help you understand how your customers experience your brand across touchpoints.

Request a custom report today: www.newstore.com/myscore

Introduction

Om

nichannel Leadership Report

Retail has been on the omnichannel

track for years now. In fact, the industry

seems to be not only bored with the

term but also frustrated. Why?

Because it’s really hard to pull off.

The Omnichannel Leadership Report aims to show how the sum of the customer journey is greater than its parts.

T he technology trying to make omnichannel work was built years ago, when online and

offline were separate concepts. We might want to move on because time has passed, but we’re not yet in a position to do that. There are still too many brands grappling with how to wholly transform their business to accommodate the modern shopper. They may be aware of the need to look through an end-to-end lens, but we’re still seeing a lot of fragmented strategies that address individual touchpoints versus the entire customer journey.

That’s not to say there aren’t brands reaping the rewards of change. A number of brands have gone all-in to overhaul their operations from the top-down and inside-out. They’ve put mobile, connected inventory and real-time data at the heart of their approaches, making digital and physical retail feel like one for today’s customers. This is what shoppers expect after all. They want to shop at TUMI - not TUMI Online or TUMI In-store. That’s a distinction we make, not them.

To be frank, what the outliers have done that the majority of the industry hasn’t is get out of their own way. They aren’t stuck on the cultural shifts required to become an omnichannel organization.

Y O U R R E S U L T S

O M N I C H A N N E L L E A D E R S H I P R E P O R T4 O M N I C H A N N E L L E A D E R S H I P R E P O R T 5

The 2019-2020 Omnichannel Leadership Report is a critical assessment of over 200 luxury, premium and lifestyle retail brands. The brands have been classified based on price point and how they sell their product, as well as categorized by the type of goods. For our fourth edition, our team of researchers audited each brand’s in-store technologies, website, mobile properties and call center. We visited their New York City flagship or full-line retail stores, where we spoke with customer support and store associates as secret shoppers to understand omnichannel competence, looking specifically at the seamlessness of the end-to-end customer journey.

In the following section, you’ll find an overview of the data points we collected on each brand. They map to the major junctions in the omnichannel customer journey - Discovery, Purchase and Fulfillment - plus the golden threads of Consumer Engagement and Associate Mobility. Each brand received a score from 0 - 100 (100 being the optimal score) for each section, as well as an overall score based on the average of the sections. All data points were weighted on a relevance scale (low to high), which determines the significance of the capability, process or experience to omnichannel.

Benchmark each brand’s progress toward becoming an omnichannel organization

Determine which omnichannel strategies retailers are investing in and their effectiveness

Review if/how store associates are using mobile devices to execute store operations

Evaluate the connectedness of customer, order and inventory information, and its availability to customer service and store staff

Examine how brands apply a digital perspective to brick-and-mortar, integrating technology and innovation into their store experiences

R E S E A R C H O B J E C T I V E S

Methodology Data Points

Discovery• Inventory visibility

• Recommendations & reviews

• Shoppable mobile apps

• Digital marketing & social media

Purchase• Mobile checkout

• Endless aisle

• Checkout efficiency

• Contactless & digital payments

Fulfillment• BOPIS

• Ship to store/ship from store

• Delivery methods

• Returns

Consumer Engagement• Promotional & purchase notifications

• Profile personalization

• Shopping cart curation

• Conversational commerce

Associate Mobility• Inventory visibility & endless aisle

• Mobile checkout

• Clienteling information

• Store fulfillment


48%

32%

46%44%

34%

76%

40%

87% 87% 87%

92%

80%

Overall Discovery Purchase Fulfillment Associate Mobility

Consumer Engagement

I N D U S T R Y A V E R A G E

L E A D E R A V E R A G E

O M N I C H A N N E L L E A D E R S V S . I N D U S T R YExecutive Summary

The word omnichannel has a new buzz about it.

It’s become crystal clear to the industry that in order to survive the new retail world order, having an omnichannel experience is table stakes. While this knowledge abounds, we’ve heard more talk than we’ve seen action. That’s not to say there hasn’t been progress. Our assessment of over 200 brands shows modest growth and some extremely inspiring bright spots. The trajectory of the industry is in the right direction.

For the bulk of the space, what we’ve observed is that the behaviors are there — store associates and customer support want to provide the highest level of service. They want to be able to see a 360-degree view of each shopper, but online and in-store systems are disparate. They want to make common retail tasks like returns and exchanges fast, but workflows are cumbersome.

The purchase phase especially needs attention, where most brands are grossly underperforming across channels. Also, despite more associates having access to mobile devices on the store floor, they are limited in the tasks they can use them for. This is hindering many brands from elevating their store staff into a living website, point of sale, call center and fulfillment source.


NotableFindings

Discovery ConsumerEngagement

Purchase Associate Mobility

Fulfillment

of brands do not have a store locator on their mobile app, a truly surprising statistic since apps are the easiest bridge between online and offline.

of store associates can contact a customer outside the store, still low given the popularity of SMS.

of brands allow the use of digital payments, which is a big step forward for the industry.

of store associates use a mobile device or a tablet, finally more than the percent-age of consumers using mobile in-store (60% per secondary research).

of brands offer buy online return in-store, although more suggest they do but they really hack the process.

Finding customer or product information in-store, online or through apps.

Engaging with a brand/customer before, during and after a purchase.

Completing the purchase of a good or goods in-store, online or on mobile.

Using mobile to complete omnichannel capabilities and engage and transact with customers.

Obtaining a product by collecting it in-store or having it delivered.

76% 25%

74% 68%

56%

17%from 2018

33%from 2018

NEW! 12%from 2018

8%from 2018


Takeaways

The leaders are breaking away from the pack.

The truth is in the numbers - the report’s omnichannel leaders are notably more

competent in each category and overall than their industry peers. We’re seeing it

quite significantly when it comes to mobility - the leaders using mobile have only

small gaps in their offering, while the laggards are hardly using mobile at all. WBR

Insights found more than half of retailers feel ill-prepared to support mobile tech.

But it’s time to overcome the paralysis and just do it (like Nike).

Luxury and basic brands are edging out the market.

Stores are critical to luxury shoppers. More than any other demographic, they

place a high importance on product touch and feel and store inspiration. It makes

sense then that luxury brands had the highest overall score average (41). Not too

far behind is the basic brands category i.e. the ones you find in a traditional shop-

ping mall. As the makeup of malls change, these brands are evolving to stay

relevant. Don’t count out the mid-market brands, though; many are on the cusp

of tech adoption.

Digital natives still have room to improve.

Some believe superior technology is a qualifier of a DNVB. But reaching this level

takes time. And the brands we analyzed are not there yet. They averaged a 37

in the report with many brands at the bottom. While their stores are fun to shop,

most have entered physical retail with barebone systems that patch together

solutions. As these brands mature, they’ll scale - that’s when we expect to see

them introduce connected and sophisticated platforms.


From front-end mobile tech like its Nike App to back-of-the-house data and analytics capabilities, the brand is writing the playbook for how to successfully unite digital and physical retail. Just look at its New York City flagship, which boasts six floors

Overall

OmniLeaders

Moncler has been on a mountain-sized mission to reinvent itself since CEO Remo Ruffini took the helm in 2003. The culmination is the Genius project, which required significant capital investment in IT and omnichannel platforms. Moncler now has a regular dialogue with shoppers through innovative product drops and designer collaborations. Much of this happens in-store, where associates leverage RFID technology to track and access deep inventory as well as clienteling solutions to keep shoppers inspired and wanting more.

Louis Vuitton is well on its way to matching its IRL experience with its online one. The brand has long prioritized making its customer journey seamless across channels, a task most other luxury brands reserve for their stores. Louis Vuitton store associates are able to see a 360-degree view of the shopper, both for owned stores and department stores. This information and more is all accessible from an iPhone, which store teams carry on the floor to provide the highest level of service and personalization.

Banana Republic has been outfitting itself for an omnichannel world over the last few years. This Gap Inc. brand caters to its customers’ wants and needs by offering solutions that bridge the in-store and digital realms of shopping. Most notable is the ability to reserve in-store items from the web, as well as buy online pickup in-store (BOPIS). These, and then some, are all in an effort to keep driving traffic to stores, where Banana Republic engages shoppers with a simplified and information-rich experience all from a mobile device.

1 . N I K E

2 . A T H L E T A

3 . M O N C L E R

4 . L O U I S V U I T T O N

5 . B A N A N A R E P U B L I C

Nike is just doing it in more than sports retail but now all of retail. In the last year it has doubled down on its D2C strategy, spending $1 billion on its omnichannel transformation.

of experiences including custom-izations at the Sneaker Bar and digital Pick Up Lockers. Nike is winning at the engagement, efficiency and experience game, and what it has built is marveled by consumers and retailers alike.

Athleta is flexing its musclesin athletic and athleisure wear.

Currently in “high growth mode,” the Gap Inc. gem continues to invest in business areas that set it apart from its industry counterparts, such as sustainability and inclusivity. Additionally, it’s one of the first brands in its parent company’s portfolio to run its stores on mobile, connecting shoppers with high-demand products and demonstrating its commitment to socially-responsible activity. Athleta also landed its first-ever sponsored athlete this year, USATF athlete Allyson Felix. This will surely help the brand keep its leading position in the race for athleisure market share.


DiscoveryIt’s all about the advantage. The better you know your

shopper (past purchase history, style preferences, personal

milestones) and the better they know your product

(specifications, sizing, availability), the more likely they are to

shop with you than your competitors. In today’s experience-

first retail environment, consumers are happy to browse and

be entertained. But when it comes down to business, time and

accuracy are of the essence. Here we focus on the ease and

efficiency of finding customer and/or product information

online, in-store and with mobile.

01 D

isco

very

Stuck In-AppIn-app is the new online. Synchrony research found the number of retailer mobile

apps used by consumers doubled from two per phone to four in 2018. Despite all

the time consumers are spending on native apps, only 24% of brands have a store

locator on their mobile app. Consumers still love to see, touch and feel products -

more than three quarters of brands are missing out on the ripe opportunity to drive

foot traffic and ultimately, store sales.

Free To Roam Over half of consumers that use retail mobile apps use them while shopping in-store.

Likely, they’re looking up product information or want access to exclusive deals

and discounts. Kudos then to the 43% of stores that have publicly-available Wi-

Fi. Having Wi-Fi is a win-win - it drives convenience and experience for customers,

while giving retailers the opportunity to zoom in on customer behavior.

Partly Cloudy Inventory Accurate inventory is hard, but shoppers expect it. And they expect it wherever

and however they shop. Retailers are making positive strides in terms of in-store

inventory visibility - associates at 95% of brands can check their store’s inventory

levels with a POS system. However, when you put the shopper in-app, things aren’t

as clear. Only 26% of brand apps show in-store inventory information for stores

near you.

The Digital CrossoverOnline product recommendation engines can lead to a double digit lift in sales.

Consumers also love these web features, and are more likely to shop on a site that

curates a look for them without much search effort. When it comes to in-store

though, these tools aren’t yet ubiquitous. 55% of associates can’t access related

products on a POS and even more (58%) can’t look up product pairings to make

recommendations. Time to apply a digital perspective to physical retail.

24%of brands have a store locator on their mobile app

43%of storeshave publicly-available Wi-Fi

95%of associates can check their store’s inventory levels

42%of associates can unlock upselling opportunities

This section of the report had the highest overall average at 48%. As brands reinvest in their direct to consumer strategies, they are prioritizing data and analytics as it relates to customer and product visibility. With discovery being the first step on the customer journey, it’s important to add value off the bat so net-new customers become loyal repeat ones.

A N A L Y S I S

Time and accuracy are of the essence.


The brand makes it easy for customers to search inventory both on its website and in-store. Online, you can see which stores near you have items in-stock. In-store, you can search product several ways - by looking it up on a wall-mounted screen or via a store associate. Associates have access to accurate, enterprise-wide inventory all from an iPhone.

DiscoveryLeaders

Free People has really unlocked inventory availability.

When shopping online, once you select a size it automatically tells you if the item is available for in-store pickup and where. You can look for availability up to 100 miles away. This same experience exists in the brand’s mobile app and in-store. Discovering product is core to the Free People “boutique” vibe - there is even a “Back In Stock” page online next to the new arrivals, to make sure you never miss out.

Burberry has uncloaked product visibility via the Burberry app, a new gateway to the brand with features that allow you to explore and browse the latest collections. You can even find your nearest store in the app; save an item to your wish list then pick it up in person. You also experience this seamless commerce in-store - when a store associate pulls looks for you, they can add the items directly to your cart using an iPhone.

Athleta has exercised serious innovation in order to help you discover apparel and gear for your next adventure. Its newly reinvented app lets you browse and shop when on the go. But you can use the app in-store too - with the scan feature, you can scan product barcodes to see item info and find more sizes. If you don’t want to use your phone to find what you’re looking for, store associates can check inventory at the brand’s 100 stores from their mobile device instead.

Adidas has jumped over hurdles to put its brand and products right at your fingertips with its exclusive app. The live chat feature is especially noteworthy, as it connects you with customer support agents (around the clock, seven days a week) who can help guide you through your shopping journey - sharing product details, stock levels and more. You’ll find the same helpful sales people in-store.

1 . L U L U L E M O N

2 . F R E E P E O P L E

3 . B U R B E R R Y

4 . A T H L E T A

5 . A D I D A S

It wouldn’t be a stretch to say that Lululemon has perfected its product — and also how shoppers discover it.


PurchaseThe purchase experience often determines a customer’s

relationship with a brand. Checkout is the make-or-break

moment. If it is long and complicated, shoppers will abandon

their online order or walk out of the store empty handed.

Today’s buyers expect checkout to be fast and efficient -

whether online or in store, they want to purchase products

with nothing more than a tap of a button. In this second

section we look at how retail brands are removing friction

from the buying process, making purchasing goods in-store,

online and on mobile simple.

Wrapping It Up 90% of brands still have a traditional cash wrap, even though some

don’t need it to complete a checkout. If you’re not using it as intended,

why not transform that real estate into selling space? You can turn

it into a dedicated online order pickup location, or install a demo or

customization bar.

Let’s Get DigitalBy 2025, a majority of shoppers will carry a phone but no physical wallet. Nearly

three quarters of brands have already set themselves up for success by allowing

the use of digital payments, such as Apple Pay, Google Pay, Alipay and more. This is

up from 57% last year, which shows growth toward quick and easy payments. Even

so, only 23% of brands advertise the option.

The Forgotten Buying ChannelFor unknown shoppers to become loyal customers, you need to offer a broad range

of support services. While calling may no longer be the norm for consumers, call

centers are still a demand source. However, they aren’t evolving at the pace of

digital channels. Only 17% can see or look up a customer’s online shopping cart to

place an order.

Help WantedThere has been a lot of chatter about self-checkout, especially with the launch of

Amazon’s cashierless Go stores. Despite the renewed allure around the concept,

and its proliferation in grocery and pharmacy, it’s not catching on for apparel retail

- less than 2% of stores offer it as part of their checkout service. As consumers

increasingly dictate their shopping experiences, it’s plausible we’ll see this figure

increase in the years ahead.

90%of brands have a traditional cash wrap

74%of brands allow the use of digital payments

17%of call centers can look up an online shopping cart

<2%of brands offer self-checkout

Brands continue to improve the overall purchase process. This is especially true in-store where mobile point-of-sale systems are being used to diminish lines and cater to phone-dependent shoppers. We see retailers working hard to make their physical retail locations profitable. But that’s not to leave other properties behind on the curve. Shoppers don’t see in channels - they expect the buying experience to be apples to apples wherever they buy.

A N A L Y S I S

Checkout is the make-or-break moment.

02 P

urch

ase


With Instant Checkout in the Nike App, Nike Plus members can skip lines by simply scanning an item and tapping the purchase button. In the app and in-store, you can also pay with Apple Pay and PayPal to ease the transaction. Nike truly wants to build up its direct relationships with customers by making their lives a little easier.

PurchaseLeaders

Timberland has blazed a trail with its fast, easy and secure checkout experience, which exists at purchase touchpoints from the call center to online to in-store.

Its call center is especially seamless — customer support can look up wish lists and online shopping carts (and edit or remove items, too) as well as place an order for in-store pickup.

Michael Kors fashions memorable service to be the heart of its brand, especially when it comes to the purchase process. When shopping online, you can easily ship one item to an address and pick up another in-store, all within the same transaction. You are also served up exactly how many KORSVIP points you could earn for your order, putting glamorous perks like free shipping and birthday rewards at your fingertips.

Athleta keeps everyone moving at the register. Its point-of-sale system is completely mobile so you can check out from any corner of the store. This isn’t the experience for just a simple, single transaction though - store associates can process endless aisle transactions from their iPhone as well as mixed cart. Athleta is always thinking about the conveniences that will be the most valuable to customers and this is one of them.

Saint Laurent’s client service team makes La Différence - in-store and online. They can quickly access your customer profile, including saved wish lists and shopping carts. Furthermore, the brand happily accepts telephone and call center orders. The service representatives even take the time to provide product recommendations and other information while they have you on the phone.

1 . N I K E

2 . T I M B E R L A N D

3 . M I C H A E L K O R S

4 . A T H L E T A

5 . S A I N T L A U R E N T

Nike’s House of Innovation raises the bar for all brands when it comes to the customer buying experience.


FulfillmentOrder fulfillment is a modern-day retail battleground. The

back-end and supply chain complexities are not lost on us,

but these aren’t things a consumer is privy to. After they place

an order, they expect to collect it in-store or have it delivered

in the fastest and most cost-effective way possible. If, from

the consumer perspective, the process is anything less than

smooth, you’ve lost out to their expectations. In this third

section, we analyze which omnichannel fulfillment options

retailers have implemented to surprise and delight shoppers.

Infinite Shelf SpaceThe more inventory associates have access to, the more they can sell. And when

associates are selling, you create a brand relationship built on trust and reliability.

47% of brands are capitalizing on the benefits of endless aisle, selling stock from

any enterprise location. That’s up from 33% last year. Interestingly though, many

brands fall back on referring shoppers to their e-commerce site or they request an

often clunky store-to-store item transfer.

Retail’s Return Fake Out To be customer-first means allowing shoppers to take any action, including returns.

56% of brands offer buy online return in-store (compared to 23% last year).

Originally the number was higher (79%); however, after digging into return policies,

we found 23% of brands actually hack the process. Meaning, they accept returns

in-store only to send items back to the warehouse and issue the refund days later.

Returns are a retail service - if you expect to cross-sell or upsell, consumers should

be able to get their money back on the spot.

Order Here, Pickup ThereIf consumers can save money on shipping and get the instant gratification of same-

day retail, most will do it. While the benefits of BOPIS are becoming increasingly

clear, the adoption is still low as only 25% of brands offer BOPIS (slightly less than

last year, although remember we surveyed more brands this time around). Brands

are leaving a lot of additional revenue on the table, specifically luxury and premium

where the average rates are 16% and 19%, respectively.

Reservation For One, PleaseLike BOPIS, offering reserve online pickup in-store is a convenience factor that

can’t be beat. Especially for customers that still view shopping as a multi-sensory

experience and want to try on apparel, footwear and accessories. That said, it’s not

a consistent fulfillment option as more than three quarters of brands don’t offer

it. This could potentially alienate the subset of buyers that prefer purchasing in-

person.

47%of brands can perform an endless aisle purchase

56%of brands offer buy online return in-store (BORIS)

25%of brands offer buy online pickup in-store (BOPIS)

22%of brands allow shoppers to reserve items online

In the age of Amazon and the convenience economy, the bar is set high for order fulfillment. Out-of-stocks can be a trillion dollar problem, but more and more retailers are averting this dilemma with endless aisle - opening up the potential for a double digit lift in sales. There is still work to do around BOPIS and BORIS though, two cornerstones of store fulfillment.

A N A L Y S I S

A modern-day retail battleground.

03 F

ulfil

lmen

t


The brand maximizes its inventory across the enterprise, using its store stock to ship from store and to fulfill BOPIS orders - the latter of which you can pick up at customer service. On the flipside, it also has a generous return policy, especially if you have REI membership - you can easily return any time without a receipt.

FulfillmentLeaders

LOFT has been riding high for awhile in the fulfillment category.

For several years now its been delighting customers with the ability to order and ship out-of-stock product from other locations or a nearby warehouse. This endless aisle capability combined with last mile delivery and the ability to BOPIS is so important for the brand’s consumer who is usually a working woman on the go.

Kate Spade has had BOPIS in the bag for some time now - not only for its convenience factor for shoppers, but also the incremental sales it drives from added store traffic. Once customers are in-store, the brand’s store associates are empowered with mobile clienteling information that they use to ensure the shopper gets what she wants and by any means possible.

Nike continues to train consumers to expect its Nike App in every part of the shopper journey. You can use the app to enjoy all-star treatment and friction-free fulfillment in the New York flagship. In the Speed Shop specifically, just reserve items before you enter the store, then pick them up at the dedicated lockers using your member pass. It’ll get you in and out with your items in minutes.

Through rain, sleet or snow, one of L.L. Bean’s core tenets is to get things to cus-tomers quickly and accurate-ly through exceptional logis-tics and fulfillment. In some cases, this means shipping to a nearby store for pickup - it could take several days though, so the better bet is to reserve or order online and pickup in-store. Sim-ply go to the store’s pickup counter to grab your goods.

1 . R E I

2 . L O F T

3 . K A T E S P A D E

4 . N I K E

5 . L . L . B E A N

REI has reached the peak when it comesto order fulfillment.


Sustainability Shoppers are more mindful now than ever before, especially the millennial constituency.

They have an unwavering expectation that the brands they buy align with their personal values.

In an effort to stay relevant, leading brands are taking the pledge of sustainability. It makes sense: the apparel industry is the second largest environmental polluter in the world.

Currently, there are 131 certified B Corp fashion and apparel companies. Brands like Allbirds, Athleta, Cotopaxi, Eileen Fisher and Patagonia have all committed to making environmentally-conscious decisions each step in their retail chain. Today, more than half of their products are produced from sustainable sources.

Many other brands have been vocal about their sustainability goals, too. Everlane’s Saitex denim factory recycles 98% of its water. Zara pledged to make its collections from 100% sustainable fabrics by 2025. Abercrombie & Fitch Co., Fast Retailing Co., and Tapestry, Inc. are U.N. Global Compact participants - their operations align with the organization’s 10 universal principles for human rights, labor, environment and anti-corruption.

The Retail Industry Leaders Association (RILA) found nearly 68 million Americans base purchasing decisions on their values. They will also spend up to 20% more on environmentally-sound products. What’s your sustainability strategy?

Experiential RetailIs experience per square foot the new sales per square foot? For many retailers, it seems so.

It’s hard to capture consumer attention these days, which is why brands are merging entertainment and technology with traditional shopping. After all, they need to set their stores apart from online - immersive and interactive experiences are such ways to do it.

Most stores today aren’t actually experiential, but there are some retailers doing it well. When Roots put its, yup, roots down in Boston, it introduced its gallery concept. Each section of the store tells a part of the brand’s story based on a single product. In New York, L’Occitane en Provence’s Fifth Avenue store (the Retail Design Institute’s 2018 Store of the Year), features bike rides and hot air balloons. They’re virtual, but where else in NYC can you transport yourself to the south of France?

And of course, the Nike House of Innovation 100. The top retailer in our report has brought the innovation of its sneakers and apparel to life in the form of 68,000-square-feet of store. As Amazon trains us to shop from our couches, how will brick-and-mortar convince us to get up and experience something real?

Trend Watch

SubscriptionsConsumers have long appreciated subscriptions - just look at Netflix, Spotify and Blue Apron.

McKinsey & Company found the subscription economy has grown by more than 100 percent a year over the past five years. Why? Well, for one consumers are fickle with their time and money - subscriptions are a more controlled way of shopping. There’s also the element of surprise and delight, which is a win for the customer (discovery) and the brand (satisfaction). Finally, exclusivity - giving shoppers something of value that everyone else doesn't have.

American Eagle launched a subscription service in the form of rentals. “Style Drop” is a no-commitment option for fresh picks delivered directly to your door. Ann Taylor Inc.’s brands have similar programs, called “Infinite Style” and “Infinitely LOFT,” where you can enjoy a size-inclusive rotating wardrobe. The URBN brands have Nuuly - a new service whereby you pay just $88 for six items a month.

This market is estimated to reach $1.9 billion in global value by 2023 per Allied Market Research. While cancel rates are high (up to 40% of subscribers ultimately call it quits) and the reverse logistics are complex, there’s a big recurring revenue opportunity here. Are subscriptions the real deal?

New Store FormatsBrands are feeling the squeeze of evolving customer expectations and increased competition.

While stores have closed in the last few years as a result, it’s a reflection of the individual retailer and not retail overall. Look at all the digital native brands expanding into brick-and-mortar. It plays an important role, but physical retail is not one-size-fit all.

Lululemon is opening four different types of stores - from pop-up to large format experiential retail centers. Foot Locker, one of Nike’s most important wholesalers, is rolling out stores that are four times the size of existing locations. Abercrombie & Fitch Co. is taking the opposite approach. Its closing its flagship shops and focusing on smaller stores. And then you have Glossier, adding flagships to its fleet but also experimenting with temporary stores.

What this tells us is that there is no longer a specific formula to brick-and-mortar. It’s clear physical retail still matters, but it's up to the individual retailer to make the most of its real estate - be it 10,000- or 50,000-square-feet. Will competitive advantage be had in a flagship or a showroom? It’s ultimately a brand-level decision.


ConsumerEngagementEvery twist and turn in the customer journey is an opportunity

to engage shoppers. To engage means to interest, to

captivate, to draw attention - and for the retailers doing it right,

it means to win. Because at the end of the day, it's the highly

engaged customers who buy more, promote your brand and

stick around. This fourth section explores the ways in which

brands leverage data, technology and the human touch to

engage customers before, during and after a purchase.

Going Way Back In TimeConsumers on the receiving end of personalization believe it to positively impact

their purchasing decisions. Yet, personalization wouldn’t be possible without

a complete picture of shoppers. The canvas is only partially painted - 79% of

associates can see in-store purchase history, but only 58% can see online purchase

history. This is because, surprisingly, many brands still operate disparate systems

that don’t open up access to all past purchases.

Help Me Help YouCustomer data is a slippery slope, but it is what enables a store associate to

clientele at a high level. To build a rapport with shoppers, you need more than an

email address. Most brands are reduced to just that, though — only 27% of store

associates are able to add notes to a shopper’s profile with a POS system. That

means they are pretty limited in their ability to help.

What’s In Your Cart? There’s no online or offline. At least not in the eyes of modern consumers who start

their buying journey in one place and expect to finish it in another. But only 10%

of store associates can see what’s in a shopper’s online cart. Often, to access this

information they request the customer look it up themselves on the website. Not

exactly seamless shopping.

Don’t Leave ‘Em HangingThe associate to customer relationship isn’t within four walls anymore. Led by

millennials, consumers prefer text messaging over other forms of communication.

It’s why mobile messaging is starting to infiltrate business as a means of marketing

and customer engagement. Today, a quarter of store associates are able to contact

customers outside the store to share information on new arrivals and events, to

confirm appointments, and more.

10%of associates can access an online shopping cart in-store

27%of associates can add notes to a shopper’s profile

58%of associates can see online purchase history in-store

25%of associates can contact customers outside the store

Retail brands are putting genuine effort into being customer-first. The changing nature of physical retail is helping in this regard —with more technology and unique store selling points, associates can really be of assistance to shoppers. We’re seeing mobile enable this. At the same time, channel fragmentation still exists. Eliminating the disconnect will be key to a frictionless customer experience.

A N A L Y S I S

Data, technology and the human touch.

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This engagement extends to the store environment as well, where Everlane hosts physical events to promote in-person interaction and open studios to talk with Everlaners. As a result, they have access to robust customer info and are able to add personal notes to shopper profiles based on their one-to-one relationships.

ConsumerEngagementLeaders

Thom Browne designs in-store experiences that woo you from the moment you walk through the door.

From their mobile devices store associates are able to access a customer’s past purchase history, preferred items and browsing behavior, which helps them deliver a top-notch luxury experience that matches the brand’s aesthetic.

Tiffany & Co. shines brightly by combining digital-savvy and white glove customer service. It’s store staff use mobile to augment their clienteling efforts. If you have an upcoming birthday, anniversary or wedding, they want to know it; they want Tiffany to be part of life’s biggest celebrations. They take notes and save items to your account for later so you can buy the brand for all milestone events (or so someone can gift you!)

Fendi wraps store visitors with a warm feeling and wants everyone to leave satisfied whether you buy something or not. If you’re not quite ready to commit to a purchase, its store associates offer to take down your personal information so they can stay in touch. Sure enough, you’ll get an email with product details on your favorite bag - they’ll also share info on that wallet you made a side comment about, in case it’s also on your wish list.

Ermenegildo Zegna’s store associates tailor your experience efficiently and personably - and they’ll stick by your side with an iPad in hand to make sure your shopping trip is nothing short of memorable. This level of service is at the core of the brand’s DNA, and it is powered by customer data from different channels as well as marketing.

1 . E V E R L A N E

2 . T H O M B R O W N E

3 . T I F F A N Y & C O .

4 . F E N D I

5 . E R M E N E G I L D O Z E G N A

Everlane goes the extra mile to engage its shoppers. In fact, the sole metric the brand tracks on social media is consumer engagement.


AssociateMobilityConsumers are inseparable from their mobile devices. They

believe their personal mobility should be matched by every

business they come into contact with. In retail, this means

having a connected store associate with endless intelligence

in order to deliver a top-notch customer experience.

Associates are the heartbeats of a brand - they have a

larger impact on revenue when they use mobile to execute

omnichannel retail. This final section looks at just that.

Make Way For MobileRetail IT leaders agree mobile makes their brands more competitive. It’s why 68%

of them are providing associates with mobile devices on the store floor, be it a

smartphone or tablet. This is compared to 60% last year, showing gradual growth

in adoption and an increased understanding about how mobile makes associates

more productive and stores more profitable.

Mobile Inventory ManagementMore than half (51%) of store associates can see local and organization-wide stock

on a mobile device. Sometimes the devices are ruggedized tablets or smartphones

and sometimes they’re consumer devices; regardless, inventory lookup is the most

common use of mobile in-store by frontline staff.

Associates UntetheredMobile devices are small enough for associates to carry around the store floor, and

46% do. With constant access to a device, they can help customers with everything

on the fly, from returns to inventory. For the associates that don’t have a device

on their person, they have to leave the customer’s side during crucial shopping

interactions.

Check, Check Me OutAccording to Adyen and 451 Research, retailers lose nearly $1.1 billion in potential

sales due to long lines. Mobile checkout is therefore a brand and a customer’s

dream. 33% of brands offer mobile checkout, although most are keeping their

capabilities basic - only 19% can place an endless aisle order and even fewer (14%)

can complete a mixed cart transaction.

68%of associates use a mobile or tablet device

51%of associates can see inventory via mobile

46%of associates carry their mobile devices on the floor

33%of associates can complete checkout with a mobile device

We’ve watched mobile make its way into retail for years now - from consumer apps to display devices to mPOS. Even so, mobile is still the Achilles heel for many brands. Omnichannel means always connected, so there is no true omnichannel without mobility. An improvement to associate mobility, i.e. putting real-time customer, order and inventory information into their hands, would help raise scores for a number of brands in the report.

A N A L Y S I S

The heartbeat of a brand.

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It does so by giving all store associates a tablet that they can use to help customers and personalize the shopping experience. From the jewelry counter, they can look up product inventory, order items from another store and complete your checkout. It’s a no fuss, luxury experience.

AssociateMobilityLeaders

Theory hypothesized its stores would feel more expansive and airy without a traditional cash wrap. It was right.

Having store associates that can do everything from an iPad mini gives shoppers more opportunity to interact with the brand’s modern essentials and minimalistic store setup. The associates are always nearby and able to assist though, offering mobile checkout with flexible payment options like Apple Pay.

Suitsupply uses mobile to ensure customer data is never in, well, short supply. It’s stylists have quick access to shoppers’ information like suit and shirt measurements from their iPad. They also use them to show you how items look on others, giving more personality to the garments and revealing how they wear in real life. When it comes to checkout, associates use iPod to make the process pain-free.

Nike equips store associates for the big game with iPad and iPhone. The devices fuel their store experience in the same way the Nike App does the customer. If you can’t find what you’re looking for, they can use their phone to look up all the products available to try on or buy. They use mobile to ensure the customer has a winning experience, every time.

LOFT elevates their store associates with phones that operate as a point-of-sale. This is perfect for mobile-savvy millennials, who already interact with the brand frequently on mobile (we’re looking at you, LOFT Mobile Insiders). The real-time view into product, content and community - for associates and customers - is what drives the brand’s ability to provide a more personalized experience.

1 . T I F F A N Y & C O .

2 . T H E O R Y

3 . S U I T S U P P L Y

4 . N I K E

5 . L O F T

Tiffany & Co. maximizes its luster by using every square inch of its stores as selling space.

O M N I C H A N N E L L E A D E R S H I P R E P O R T36

We will never not see change in the

retail industry. While it would be

easier if they weren’t, consumers are

a moving target; always shifting based

on various technology breakthroughs.

Omnichannel isn’t a wait and see game,

though - today’s retailers need to be

proactive in evolving their organizations

at the foundational level. But it isn’t

good enough to take steps that merely

simulate the omni experience. This is

clear enough by the delta between the

leaders and laggards in the report. The

leaders have implemented the core

building blocks and are homing in on

exactly what their customers want and

need. Even more, they’re taking action

to be predictive so they can answer the

call of tomorrow’s shoppers.

So, what does tomorrow look like? We

suspect in the next report we’ll see

mobility scores on the rise. Consumers

are not laying off their smartphones. In

fact, they’re relying on them for just

about every utility and before we know

it they won’t need anything else to go

about their day-to-day. The same is

true of store associates. Their will to

use mobile is there. Time for brands to

institute the way. This is why we believe

digital native brands will put pressure

on traditional retailers in the not-so-

distant future. They may not have

the most sophisticated technology

today, but they do have the makings

of a connected retail environment — a

reason to not underestimate them, but

rather learn from them.

Overall, it’s important to remember omnichannel is not one-size-fits-all.

The way to the top is with individual

innovation and experimentation. Not

all retailers have the cash flow of Nike

to make their transformation a reality.

But what every brand can do is set

goals and be willing to experiment.

The omnichannel leaders in this report

have taken chances and embraced

change — whether with store format

or technology or marketing. Now is

the time for every brand to make

omnichannel its opportunity.

Your Results

Want to know how your brand performed in the 2019-2020 Omnichannel Leadership Report?

We can produce a custom research brief for you, including:

• Your score among the 200+ brands researched

• An individual analysis of omnichannel capabilities

• A competitive analysis of brands in your segment

• A breakdown of your technology and mobile hits and misses

• Anecdotal commentary based on our in-store excursions

Request a custom report today by visiting:

www.newstore.com/myscore

Conclusion

DISCLAIMERThis report is the result of research done by NewStore, Inc. and reflects NewStore’s analysis and assessments of the subject matter. NewStore does not represent or warrant

that the use of the guidance in this report will lead to any particular outcome or result. Additionally, this report is not intended to provide any legal, taxation or accountancy advice.

NEWSTORE is the trademark of NewStore, Inc. The content of this document is protected by international copyright. All rights reserved.

Omnichannel Leadership Report

NewStore operates a platform for retailers to run their stores on iPhone.

It provides Omnichannel-as-a-Service with the only integrated cloud OMS and mobile POS. Intuitive store associate apps allow retailers to offer seamless shopping experiences through endless aisle, mobile checkout, store fulfillment, real-time inventory and clienteling.

With an API-first architecture and an expansive ecosystem of partners, retailers can deploy fast and flexible omnichannel with ease. Brands that run on the NewStore platform include Decathlon, Outdoor Voices, UNTUCKit and more.

NewStore was founded by Stephan Schambach, who pioneered e-commerce at Demandware (now Salesforce Commerce Cloud). The company has offices in Berlin, Boston and New York.

Learn more at www.newstore.com

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