The hidden costs of poor omnichannel execution: what retailers are missing

If you are evolving in the retail landscape, simply having an omnichannel strategy in place isn’t enough. While many retailers believe they have the basics covered: integrating channels, offering flexible fulfillment options, and streamlining operations; the reality is often very different. Beneath the surface, execution issues are quietly draining revenue, losing customers, and hampering long-term growth. In fact, the hidden costs associated with poor omnichannel management are more damaging than most realise.

Our Omnichannel Playbook reveals some staggering figures that highlight the true impact of suboptimal omnichannel execution. Let’s dig into the KPIs every retailer should be paying attention to and explore the strategies needed to turn these silent losses into profitable opportunities.

69% of customers turn to competitors when items are out of stock

Few things are more frustrating for a shopper than browsing a retailer’s site or visiting a store, only to find that the item they want is unavailable. Stockouts not only lead to immediate lost sales, but also drive customers directly to competitors. According to our research, a staggering 69% of consumers will switch to another retailer if the product they’re looking for isn’t available.

The problem is that many retailers still lack a unified view of stock across all channels, making it difficult to maintain accurate availability. This lack of visibility leads to not just lost sales, but also a loss of customer trust and loyalty. If customers experience multiple stockouts, they are unlikely to return, making each out-of-stock situation even more costly in the long run.

Solution ?

Implement a unified inventory management system that integrates data from every sales channel (physical stores, online shops, and marketplaces). By centralising your inventory, you can accurately track stock levels and dynamically allocate items where they’re needed most, reducing stockouts and boosting customer satisfaction.

$1.8 Trillion lost annually due to inventory distortions

Inventory management might seem like a behind-the-scenes operation, but it’s at the core of a successful omnichannel strategy. Poor stock visibility, inaccurate demand forecasting, and outdated replenishment practices create inventory distortions (stockouts and overstocks) that are silently costing retailers billions. In fact, global inventory distortion is estimated to cost retailers $1.8 trillion annually.

For many businesses, overstocking is just as damaging as stockouts. Dead stock ties up capital that could be used elsewhere and leads to markdowns that chip away at margins. Worse yet, poor inventory management often triggers a vicious cycle of inaccurate reordering, perpetuating the problem.

Solution ?

Adopt real-time inventory tracking and machine learning to optimise stock levels. Leveraging advanced analytics and integrating AI-driven solutions can help ensure you have just the right amount of inventory on hand, minimising both excess and shortages.

45% more merchandise purchased through Click and Collect

While stockouts and inventory distortions represent loss, there are also areas where small improvements can lead to significant gains. One of the most overlooked opportunities is the Click and Collect model. When implemented effectively, it not only enhances the convenience factor for customers but also encourages additional in-store purchases.

According to our findings, customers who pick up online orders in-store purchase 45% more merchandise than they originally intended. This added revenue is a huge boost for retailers, especially when integrated into an omnichannel strategy that ties together online and offline experiences seamlessly.

However, many retailers fail to optimise their Click-and-Collect operations, leading to long wait times, inefficient processes, and missed opportunities. If customers are frustrated by a slow or confusing experience, they are unlikely to browse the store, negating the potential for additional sales.

Solution ?

Ensure your Click-and-Collect service is fast and efficient by using in-store fulfillment technology that provides real-time updates, automated notifications, and streamlined pickup processes. This not only creates a better customer experience but also maximises cross-selling opportunities.

Turning losses into opportunities: your Omnichannel blueprint

Addressing these hidden costs and unlocking new revenue potential requires more than just technical fixes, it demands a strategic transformation. High-performing retailers aren’t just relying on guesswork; they’re using data-driven insights and robust omnichannel systems to optimise every aspect of their operations. This is where a comprehensive, Order Management System (OMS) comes into play.

A modern OMS enables retailers to:

• Unify inventory across all channels, reducing both stockouts and overstocks.
• Dynamically route orders to the most profitable fulfillment locations.
• Implement flexible fulfillment options like Ship from Store, which reduces delivery times and costs.
• Create a single source of truth for customer data and order management, enhancing visibility and decision-making.

But understanding where the gaps are is the first step. Without the right KPIs and benchmarks to measure performance, it’s impossible to pinpoint where improvements are needed. That’s why we’ve created the Omnichannel Playbook!

Retailers who aren’t actively addressing these hidden costs are losing more than just revenue, they’re also damaging their customer relationships and brand reputation. To become a true omnichannel leader, you need a strategy that lowers inefficiencies and maximises every sales opportunity.

Download our Omnichannel Playbook to get the full picture on how to optimise your omnichannel strategy and turn execution gaps into growth opportunities.