Zara, COS, Levis Store, Pandora and other prominent consumer brands are way behind retailers regarding omnichannel. Organisational structure is one of the reasons.
Some of the most recognised European and global brands are among the lowest performing companies in the 2020 Omnichannel Index.
On the list of low performers, you will find renowned companies like Zara, COS, Levis Store, Pandora. Actually, H&M is the only brand among the ten best omnichannel companies.
While many retailers are facing pressured EBIT-margins, brands have better financial opportunities due to access to more sales channels and “ownership” of products.
However, they still need to adjust their customer journey and close the gaps between customers’ expectations and their services to stay in control and create growth.
Otherwise, with less control and brand retention they will loose customers to competing brands and will be more dependent on multi-brand dealers including pure players and marketplaces.
THE FRANCHISE CARRIES MOST OF THE RESPONSIBILITY
Organisational structure and especially having many franchise stores is often the reason behind many brands not being truly omnichannel.
Many companies leave the burden of responsibility to transform on the franchise taker and individual stores. This means less brand control, brand dilution, less coherence and difficulties delivering a great customer experience.
The result is a fluctuating experience from store to store and a bad omnichannel experience.
Leading brands take control of the customer experience and revenue streams
Looking outside the Nordics, bigger brands are just now beginning to sell directly to their customers rather than through retailers and marketplaces.
Adidas has upgraded their omnichannel efforts, which has resulted in a 35% spike in e-commerce sales Q1 2020 (pre-corona).
If other brands do not follow suit, they exclude themselves from an incredibly important and profitable sales opportunity and the risk of being enslaved by Amazon, where the overall experience is better, the selection is wider, delivery is faster, and prices often lower.
However, it’s important to say, that using marketplaces as a sales channel in your mix is not necessarily a bad approach.
Market places can be a great channel for awareness and gaining sales. Customers that start their search on marketplaces or have preference buying on market places can learn your products and later turn into direct customers.