Why Your Back Office is Critical to Successful Omnichannel Sales Growth
Growth in Sales Channels
Over the last decade, businesses began to embrace a multichannel strategy for selling goods. Instead of just selling in physical stores or a single branded online store, they expanded the paths to offering products via multiple marketplaces at once, such as Amazon. While this approach grew sales, it often created a fragmented customer experience, as consumers wanted consistent experience information and processes on the often silo ’ed buying platforms. The omnichannel sales strategy emerged out of these more sophisticated consumer expectations.
The idea around Omnichannel is that these multiple “channels” not only broaden the paths for selling by reaching more potential customers, but also increase customer interaction with a product that can help enhance the overall brand experience. An example might be when a client sees something in a physical store and can check customer reviews or product details online. Or they can find it offered on a social media platform and can visit the brand’s website or a marketplace site to get additional information or locate a local store.
The role of the Back Office
An omnichannel sales operation is a win for customers and businesses alike—customers buy where they are, and businesses have more opportunities to achieve sales. But an omnichannel strategy requires more than just a well-organized Big Commerce store, a TikTok account and an Amazon Seller ID. The truth is merchants can become overwhelmed with deploying and maintaining an omnichannel strategy if they do not have the operational infrastructure in place to support the ever-rising expectations of their consumers and the basics for tracking and fulfilling orders from different avenues. It’s a common experience for merchants to concentrate on development of the front-end marketplaces to increase sales, and then get bogged down with the additional needs that come from a fragmented back office. Sales orders from the various channels can increase the need for tracking and reporting. It can require a more sophisticated fulfillment process and scrupulous inventory tracking. And without adequate automation and system integration in place, the added oversight can increase labor costs.
Consider additional management of just one channel: Marketplace sites can charge over 30 different types of fees to merchants using their site and services, which are communicated via multiple statements—not always associated with the orders. This makes manual reconciliation difficult, and frustrating to determine per unit profitability. Merchants can spend dozens of hours on tracking fees on just this single channel if they are not equipped with tools to manage it.
Customer Experience has never been more important
Given the variety of product option and retail selling sites now available, and the growing expense of competing for fresh consumer attention, it has never been more critical for businesses to provide a trouble-free customer experience. Repeat customers drive down the cost of sales and are key to brand growth, so it’s critical to build good will, provide great service and win repeat business from the very first purchase. Consumer frustration has never been more expensive!
What are those frustrating customer experiences?
We all have our own experiences as consumers to consider. When we are unhappy with an online purchase, was it due to the webstore or marketplace experience? Or errors in the back office?
- A store-bought gift card did not work properly online (different POS systems for online brand store and a brick and mortar)
- A return process was frustrating (lack of synch between accounting and inventory)
- A buyer received a different color/size/item than they ordered (due to poor warehouse management and pick and pack systems) or you only found out a needed item was not available after the order was placed (indicating a lack of good integration between inventory data and the ecommerce platform).
They are all back-office issues that can be addressed by a comprehensive well integrated back-office management systems. Most organizations can manage these while they are small, but once an organization experience increasing sales volume (a key reason to embrace the Omnichannel strategy) its critical to build a strong back office.
Take Stock of your Systems before Adding your next Channel
Before you plunge further into this appealing strategy, take the time to perform a technology and process audit to be sure your back-office technology and staff can support these client experiences that will lead to return purchases, loyalty, and growth. Adding new sales channels is commonly the stage where many organizations reflect on moving beyond sophisticated accounting and integrated point systems into a true Enterprise Resource Planning (ERP) system for automating processes from sales orders through accounting and fulfillment with a single data source. Take the time to ensure your inventory tracking can live up to the reporting demands of additional channels and your warehouse management can scale without frustrating your fulfillment teams.
In short, an Omnichannel strategy is a great way to grow sales units and build your customer base—but a winning strategy requires a smoothly running unified back office to keep customers satisfied and coming back.
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If you have questions about omnichannel growth best practices, Marcum can help. Contact us at [email protected].