Retail of the future : O2O or O&O?

Abstract

Retail industry has transformed in the first decade of this century and new trends continue to disrupt it. Rise of the online channel has pushed the entire retail industry to innovate and think of novel ways to attract and retain customers. With increasing competition, retailers need to differentiate themselves and be relevant to customers. 'Customer is King' is more valid today than ever before. From the customer's point of view, convenience of online retailing is attractive, but physical stores continue to have strong appeal. Access to smartphones and the internet gives customers the flexibility to frequently shift between these channels. This poses a great challenge for retailers on how to provide an omnichannel experience that is personalized but not intrusive. This work explores the need for innovation in the retail industry by researching changing customer behavior and socio-economic trends. Customer's affinity for online channels is not debatable, but this does not mean the end of physical retail. This study examines the importance of physical footprint and the new role of Brick & Mortar in omnichannel settings. It looks into facilitators of transformation of physical retail store from point of sale to point of customer experience. Research indicates that online and offline channels will coexist. Channel integration aims to ensure that online and offline channels do not compete with each other, but complement each other. Further, this study reports the benefits and challenges of channel integration. Finally it proposes an implementation roadmap for the channel integration based on the customer value proposition and dynamic roles of each channel in omnichannel retail.