The future

Yang Yiqin, 23, a middle school teacher, bought three pairs of trousers during the grand opening of Zara's online store and chose to pick them up at a store near Fudan University.

"When I got there I waited for more than 15 minutes to get my order. Why did they deal with it so slowly, given my order was already in place? I have to say I was a bit disappointed," she said.

While Yang's experience showed Zara can improve its handling of online sales in a smooth manner, it also reflected an emerging trend in China's retailing market - an aspect known as omni-channel sales.

Omni-channel commerce has put the customer in the driver's seat, with the ability to shop anywhere, buy anywhere and receive products in the manner and time of his or her choosing.

According to Baum, the various means for shoppers to connect with the retailer present a broad array of possibilities, from information-gathering on products to making price comparisons with competitors' goods, buying online for home delivery or picking them up in-store - even to making decisions while on the move using a smartphone.

"Customers' demand continuity across all channels. A poor performance in any single one can have a very damaging effect on the brand as a whole," said Baum.

Even though the concept is relatively immature in China, an omni-channel is no longer an option - it's imperative, said Hoffmann from Bain.

He predicted that as online platforms are expected to outgrow traditional channels by more than 400 percent in the coming few years, going online has become an inevitable defensive move, particularly with the existing customer base eroded by solely online players.

Hoffmann cited Gap as making the most of the competitive advantages of the omni-channel model with its cost effectiveness and cross-channel synergies.

"To attract online shoppers, Gap uses its traditional stores to raise awareness by adding the website to promotional material and reminding customers about the site as they check out. Once online, Gap works to keep shoppers coming back with an easy-to-use experience, online promotions and full refunds for the cost of shipping returned items," he said.

An omni-channel brings along a related challenge - the ability to manage one single pool of inventory for both the brick-and-mortar stores and the online channel, Baum said. Online players only need to keep an eye on the e-market.

"On top of that, when you have multiple brands, like the Gap group that owns Gap, Old Navy and Banana Republic, you have to deal with one set of inventory across multiple brands through parallel channels. That is three to four times more complex," he said.

Baum's company has worked closely with hundreds of multi-channel retailers and consumer goods manufacturers worldwide. They developed a comprehensive set of software solutions that automate and optimize every touchpoint in the distribution operations and supply chain network.

"The critical thing is to allocate the right inventory through the right channel to replenish inventory that is sold at the time, optimize the level of stock and even forecast demand before placing an order to the supplier," he said.

Nevertheless, it is worth the effort because a seamless and well-executed e-commerce platform has been proven to attract additional business, he noted.

hewei@chinadaily.com.cn