Omnichannel and Dominick’s

Two events yesterday drew my attention. I attended a program by the CSCMP Roundtable in Chicago at the Motorola Solutions Innovation Center where the topic was omnichannel order fulfillment. If you get a chance to visit the Innovation Center, take it, as it is quite worthwhile to see where technology is headed. Yesterday it was also announced that Safeway would close the Dominick’s grocery chain by early next year, which at one time was one of the big two grocery stores in the Chicagoland area.

To me, the Dominick’s failure spoke both of the importance of omnichannel and its limitations.

Ominchannel means there are many ways to reach a potential customer with such data to support it . From a supply chain point of view, multiple methods of purchase, be at the store, online, or some combination of two adds to its complexity.   Just one small example: one innovation discussed at the meeting yesterday was to have just a few floor samples for women’s clothes but have the customer request her size as she goes to the dressing room and it would be presented to her right there. This will affect how things are stored and shipped to the store.

To learn the value of its massive data, Office Depot hired mathematicians to crunch through the data. Learning what is there will affect how they organize the process in the future.

Dominick’s is like a lot of grocery stores had a saving card, called Fresh Values, which they can see who bought want and where. The information Dominick’s sent me through emails and the website rarely corresponded to anything I actually bought from them. If they they used that data well, would it encouraged others and myself to buy at Dominick’s?  This may have been a missed opportunity.

But all the data in the world, probably would not have made the Dominick’s chain profitable as it once was. Dominick’s was a middle market store, not the highest cost or the lowest cost, or highest quality or lowest quality. Walmart, Costco was one side, and Whole Foods was on the other.  To survive in that environment, to get the customer to come back, a company needs to reach that customer on an emotional level.   Only looking at the transactions with customer, which is all omnichannel can do, would not have been enough to save Dominick’s.   The store experience, the connection with the community which competitor Jewel does well, and employee responsiveness were crucial pieces of the puzzle not addressed well by Safeway,  the owner of Dominick’s.


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