The digitisation of retail ensures that purchasing is accelerated and simplified. However, these benefits come along with some limitations and risks that need to be taken into account when launching an innovative Omnichannel approach. Basically, these can be divided into three risk phases: the time during shopping, channel selection and media selection.
Confusion and risk perception as digitisation problems
During the purchasing process, risk perception of customers is determined by their assessment of payment security, flexibility, data protection and legal certainty.
In order to reduce the uncertainties on the side of the consumers, it is essential to conduct a clear, transparent and proactive investigation into data security and the legal requirements. Innovative retail technologies can also reduce uncertainty. Applications such as virtual fitting tests complement the search for information in the stationary shop virtually and offer the customer a cross-channel shopping experience.
In addition to risk perception during purchasing, customers may be unclear even before they actually make use of a channel. The so-called consumer confusion arises from the offer of the same services in different sales channels, especially if the channels are offered, but rather uncoordinated and inconsistent with each other. The customer is therefore often unable to see why special offers are not communicated in the same way via all channels or why the assortment is different in online, mobile and stationary retail. Too much consumer confusion can lead to postponement or cancellation of purchase decisions, declining customer loyalty or poor referrals. Omnichannel retailing has different dimensions of consumer confusion:
- channel similarity: in the worst case, leads to consumers not noticing the relevant services of a channel and using the “wrong” channel;
- channel overload: Consumers try to process a flood of information caused by the channels in a certain time unit;
- channel ambiguity: Consumers do not understand the different advantages of the individual channels and their individual specifics and therefore do not use them in a targeted and efficient way.
To minimize consumer confusion, retailers need to reduce channel resemblance, channel congestion and perceived channel ambiguity, and to articulate the benefits of each channel differently depending on customer integration.
Digital divide – the exclusion of non-digitalized
The last phase in which the digitalisation of retail is being hampered is the digital divide. The digital divide describes a digital inequality. This term refers to differences in the possibilities for accessing and using digital media, especially the Internet. The main problem with the digital divide is that the digitalisation of retail via mobile or Internet no longer reaches all population groups in the same way as it has always been the case in stationary retail. If technical resources are not used, some consumers will not benefit from the benefits of Omnichannel retail, but will even be excluded from it. This applies not only to the Internet, which according to the current ARD/ZDF online study, 79.1% of the German population uses, but also to mobile applications such as location-based services or augmented reality. Especially for applications that access location data, almost two-thirds of smartphone owners say they don’t disclose their location for privacy reasons. According to a Statista survey conducted in 2014, 27.5 million Germans do not even have a smartphone with the option of downloading apps.
In order to serve all consumers equally, retailers must continue to offer a unique and holistic mobile, virtual and stationary shopping experience. The sales channels are increasingly merging, but they must not be allowed to channel each other. Each channel must be given the same attention, and the individual characteristics of each channel must be taken into account, otherwise Omnichannel retail will not only lose its purpose in existence, but will also lead to the exclusion of non-digitalised consumers. Despite the limits and risks listed above, innovative Omnichannel retailing offers many opportunities for retailers and customers who are part of a future-oriented retail concept.