The Future of Omni-Channel Retail: Predictions in the Age of Amazon by Lionel Binnie (review)

Omni-channel retail, defined as the blending and integration of online and offline retail, has been retailers' latest effort to improve consumers' shopping experience and increase operational performance (Murfield et al. 2017; Taylor et al. 2019). Omni-channel operations encompass managing product flows with a logic of physical proximity, providing goods in a timely fashion at the place customers require by integrating online and offline distribution channels. Omni-channel retail provides consumers with greater product information availability, as well as the freedom to select and switch between the convenience of online shopping versus shopping in physical stores. As a result, omni-channel retail enhances consumers' expectations to purchase at their convenience (Daugherty, Bolumole, and Grawe 2019).

In this line of thought, Lionel Binnie, the author of The Future of Omni-Channel Retail: Predictions in the Age of Amazon, talks about the drivers of omni-channel retail, the key characteristics that indicate the best channel, as well as the emerging challenges upon which retailers should focus. Indeed, the author believes that changes in two key consumer purchasing behaviors push retailers to adopt omni-channel retail. The first, discovery, refers to finding a new product, or a good that best fits consumers' needs, the best place to buy it, and at the best price. The second, fulfillment, refers to purchasing and receiving the product. The book proposes a framework that describes how discovery, fulfillment, and product type may influence the design of an omni-channel retail strategy, as well as associated challenges.

Retailers design the omni-channel retail strategy depending on the influence that distinct product characteristics have on consumers' discovery and fulfillment processes. Some products, for example, are classified as homogenous, since they are interchangeable and easily searched online. Conversely, other products are classified as heterogenous, if a unique shopping experience is expected. Relatedly, the level of customer engagement further classifies products into high-engagement products, for which consumers want an important and rewarding shopping experience, and low-engagement products, which are merely functional and routinely purchased.

The intersection of these categories generates four product types, namely elite, unique, artisan, and mundane (see figure 1). Elite products are homogenous yet high-engaging, like cars or laptop computers. Consumers look for the nearly perfect solution and an exceptional shopping experience. Consumers are emotionally involved in the purchase and expect to find information online, but they are likely to purchase such products in-store, where they expect a well-informed salesperson and a customized purchasing experience. Thus, retailers would still offer elite products in-store to guarantee the service experience. For unique products, heterogeneous and high-engaging, such as handmade jewelry, consumers want a memorable shopping experience. Retailers are unlikely to move unique products online, as they represent highly experiential products for consumers. Next, artisan products, heterogeneous and low-engaging, present characteristics of uniqueness. Some of these products, such as fresh or prepared foods, are moving online as deliveries are increasingly faster and more reliable, yet in many instances, consumers want the in-store experience. Thus, retailers will need to collaborate with business partners to distribute these products both online and offline. Finally, mundane products, homogenous and low-engaging, are routinely purchased, and consumers do not seek an experience. Many of these products, such as basic clothes or canned soup, have moved online, as consumers find the online distribution channel convenient in terms of time and effort.

The future of omni-channel retail presents two challenges for retailers. The first refers to requalifying physical stores and malls that currently merely serve as a place where to find readily available products. The second relates to providing faster, more reliable, and free deliveries in line with customers' expectations (Nguyen et al. 2019), while remaining profitable, as increasing competition and thin margins raise concerns around the sustainability of this level of service. Some retailers have found a solution in creative collaborations with other retailers or service providers...