tag:blogger.com,1999:blog-32202893.post3229846484457531628..comments2023-10-18T08:32:17.510-07:00Comments on Kevin Hillstrom: MineThatData: 2014 Year In Review: How Omnichannel Will Impact Retail MarketsUnknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-32202893.post-81420447240425941812015-01-05T07:02:15.721-08:002015-01-05T07:02:15.721-08:00The omnichannel thesis repeatedly states that beca...The omnichannel thesis repeatedly states that because you have more channels, your sales will grow, unfettered. Across my client base, that's not what is happening. My clients are finding that as online sales increase, retail traffic decreases, causing underperforming stores to perform worse, causing those locations to increasingly be closed when their leases are up. When those locations close, profit does increase, which is good, but sales as a result decline (opposite of the omnichannel thesis).<br /><br />If you are a fan of optimizing business performance, you'll love this.<br /><br />If you are constantly telling my clients that their business will grow because of omnichannel strategies, that is increasingly going to be a problem.MineThatDatahttps://www.blogger.com/profile/14014200122021988374noreply@blogger.comtag:blogger.com,1999:blog-32202893.post-45196525315067123532015-01-05T02:07:38.806-08:002015-01-05T02:07:38.806-08:00What am I missing - omnichannel delivered more pro...What am I missing - omnichannel delivered more profit for the business (although some people lost their jobs)... thats a good thing right? Or are we worried about poorer performances in the future / loss of economies of scale?Anonymoushttps://www.blogger.com/profile/00118038481905937635noreply@blogger.comtag:blogger.com,1999:blog-32202893.post-90329715046547401052014-12-30T07:05:42.314-08:002014-12-30T07:05:42.314-08:00I always freely admit that my point of view may be...I always freely admit that my point of view may be wrong.<br /><br />But I have mined billions of transactions, at a customer level (not at a segment level), measuring customer-level profitability, leading me to this conclusion.<br /><br />You can use your generous smarts to move the industry away from this outcome. It doesn't have to turn out this way. That's why I share this outcome - to kick-start people toward creating a profitable future. Go use actual purchase transactions (do the work) and measured individual customer profitability and create the outcome you want to see. <br /><br />Go do it!!!<br /><br />Read what publicly traded retail businesses are saying in their financial documents. Pier 1 has publicly stated that 60% of their leases are coming due, and that "omnichannel efficiences created by changing customer behavior and e-commerce growth gives them the flexibility to close locations in poorly performing locations". That's the very reason I write this stuff. Why criticize me when retailers publicly outline the very math I shared in this blog post?<br /><br />I realize that people have a financial incentive to argue against the data I analyze. I'm not negative about omnichannel. I'm negative about the unanticipated outcomes that omnichannel (and the former multichannel buzz word) strategy leads to. Having lived through this with catalogers, it was unnecessarily painful. Now the same thing is happening to my retail clients (read what publicly traded retailers are saying about closing store locations because of omnichannel efficiencies).MineThatDatahttps://www.blogger.com/profile/14014200122021988374noreply@blogger.comtag:blogger.com,1999:blog-32202893.post-46409118361760599222014-12-30T03:13:33.208-08:002014-12-30T03:13:33.208-08:00Kevin, as usual you do a nice job of laying out th...Kevin, as usual you do a nice job of laying out the general dynamics of the issues you are discussing and I agree that many retailers are talking the general approach you cite. But I don't quite agree that omnichannel's logical outcome is as you state. <br /><br />First, the right way to do the analysis is to focus on customer segments and whether they are profitable or not. This doesn't totally eliminate the need to look at store level economics, but it will give a different take on whether closing a store is accretive to the company or not.<br /><br />Second, as I've pointed out in my blog post "The future of omni-channel will not be evenly distributed"--and more broadly in my speaking and such-- "omni-channel" is a huge step forward in customer-centricity and for that reason it gives great potential advantage to some brands in some situations. I bristle more than a bit when you seem to be relentlessly negative about omni-channel. Moreover, it's sort of beside the point. Making a brand available anytime, anywhere, anyway is happening. Resistance is futile. Being mindful of how it will impact different customer segments and categories and choosing how to best respond is what matters.Anonymousnoreply@blogger.com