Offline-Online Convergence Is Shaking Up the Retail Sector

CIOs are at the center of the 'omnichannel retail' revolution, where the customer expects the same great shopping experience whether the venue is a store, website, smartphone or tablet, says CIO Editor in Chief Maryfran Johnson.

The mere sound of the phrase "omnichannel retail" makes my little shopper's heart beat faster. And that's even before I knew exactly what it meant.

"A lot of people will right away start thinking 'multichannel retailing.' Omnichannel retailing is different," says CEO Daniel Burrus of Burrus Research Associates. "Omnichannel is integrated, the other is not."

But you don't have to be a bargain-hunting mall maniac to see the potential that the customer-focused concepts laid out in our cover story ("The Future of Shopping: Click and Mortar") hold for industries beyond retail. In exploring the many IT and business complexities of omnichannel approaches, which blend online and offline capabilities, we offer a glimpse into your own company's likely future.

As retailers begin crafting a single shopping experience across all customer touch points, "you think about inventory as a singular concept versus store or online," says Kasey Lobaugh of Deloitte Consulting. "It unlocks a ton of value for consumers and for the retailer as well."

Once the business's attention converges on everything that affects the customer experience, you'll find the IT organization in the middle of that bull's-eye. "Technology plays a massive part in delivering an integrated customer experience," says CIO Keith Sherwell of Sears. Along with other retailers like The Home Depot, Nordstrom, Lowe's, Macy's and Staples, Sears is investing heavily in upgrading or creating the IT systems that will (eventually) make omnichannel strategies a reality. "There's a lot of this work that has yet to be done," retail expert Cathy Hotka points out.

Like so many other businesses (media and publishing leap to mind), retailers are getting access to more channels for reaching consumers, but they're managing those channels separately. Yet customers are starting to move fluidly from smartphones to tablets to PCs to social media and so on, and they want their e-stuff to travel with them.

"Customers are going to define how they want to shop, and if we're not enabling that, we'll become irrelevant," says CIO John Dettenwanger Jr. at Ahold USA. "To me, omnichannel is really about omnipresence. It really flips the view from 'What's the advantage to us?' to 'What's the advantage to the consumer?"

That is one great question for CIOs everywhere to be thinking about. How will this inevitable convergence of customers' online and offline expectations rule your world?

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