Omnichannel Retail: The Future of Commerce
According to a study by the Harvard Business Review, 7% of buyers shop exclusively online and 20% shop exclusively in stores. The remaining 73% use a mixture of online and offline channels when making a decision about a purchase.
Providing a consistent experience across these various platforms is known as omnichannel retail. Merchants should provide customers the option to integrate across all online and offline platforms seamlessly between internet enabled devices and the real world. The consumer landscape is moving even further towards the era of ‘mobile first’, and the lines between digital and physical commerce are increasingly blurred, meaning that adopting omnichannel retail is going to become imperative to the future of your business.
What Is Omnichannel Retail?
The word ‘omni’ comes from the Latin word ‘omnis,’ meaning ‘all,’ or ‘combining of all things.’ Omnichannel retail involves the integration of all different forms of marketing, from physical (in bricks-and-mortar store), online or via telephone.
Rather than just focusing on promoting an online shop or a physical commercial space, businesses are using omnichannel retail to integrate all of their selling and marketing platforms, creating a uniform shopping experience for consumers as they move between their laptop, smartphone and the high street.
Increasingly customers will walk into a store, look at the various products available before heading online to check prices, read reviews and make their purchase. Conversely, some shoppers may do their research online before visiting a local retailer to buy the product in person. The lines between online and offline shopping are being blurred, and so ensuring the customer can navigate between these different platforms smoothly and easily is crucial.
Why Is Omnichannel Retail Important?
Omnichannel retail is important for a number of different reasons, most crucially: customer experience and profitability. Customers that have a positive shopping experience are more likely to make future purchases from that brand. This positive experience helps to enhance a brand’s reputation and the increased customer loyalty can help to boost the lifetime value of that customer.
Omnichannel retail helps to improve a business’ accessibility and allows customers to browse or to buy whenever and however they want to. As more and more businesses see the benefits of omnichannel retail, it’s likely that it will become increasingly prevalent. This means that, before long, customers will expect a seamless transition between on and offline shopping and a lack of omnichannel retail could hold a business back.
Research has shown that businesses who prioritize the ‘customer experience’, can generate up to 60% higher profits than their competitors. What’s more, customers who buy from a business both in-store and online have 30% higher lifetime value than those who shop using just one channel.
Consumers want to feel that a business is understanding and responding to their needs, working to make their lives as convenient as possible.
Provide A High Quality Customer Experience
According to a survey conducted by Aspect Software, businesses that adopt omnichannel strategies achieve 91% greater year-on-year customer retention rates compared to business that don’t. The Aberdeen Group Inc reported this figure at 89%, compared to 33% retention rates for businesses who had weak omnichannel strategies in place. 15 years ago customers used an average of two touch points before buying an item. Today, that figure is closer to six with 50% of customers using at least four touch points to make their purchase
The era of the ‘Millennial’ consumer means that businesses need to adopt strategies that deliver instant results using an effective, yet simple, omnichannel experience. For 82% of shoppers, the ability to check the availability of a product online before visiting a store in person is paramount; optimizing your customer’s time is a true key to success. Similarly, 57% of customers want to be able to reserve an item online before heading to the shops to make their purchase. Although providing these types of integrated services takes time and investment, most medium to large companies should have the resources to be able to offer their customers these services.
Another benefit of adopting an omnichannel strategy is to increase the availability and potential reach of your brand. Confining your sales opportunities to just one channel can severely limit the appeal of a company, and also makes it harder for customers (old and new) to find your brand in the first place. Creating a comprehensive, omnichannel retail strategy can help businesses increase their visibility both on and offline.
Future Proof Your Company
Soon, omnichannel retail won’t be so much a choice, as an expectation.
Even today, up to 90% of customers expect consistent interactions across all channels and 87% of customers think brands need to put more effort into providing a seamless experience.
By acting to implement omnichannel retail now, businesses can help to retain their existing customer base, grow their market share, increase the reach of their brand and future proof their enterprise.
Implementing Omnichannel Retail
Businesses that want to take advantage of omnichannel retail need to create a comprehensive and cohesive strategy before implementing this multi platform marketing approach. In order for omnichannel retail to be successful, it needs to be applied consistently. The more thought and planning that a business puts into creating their omnichannel approach, the more likely it is to be practical, effective and original.
1. Assess Your Current Cross Channel Coordination
Before launching any new apps, website features or in-store policies, businesses first need to assess the current state of their cross-channel retail and customer service experience.
Look at your current marketing platforms and assess how easy it is for customers to browse your products on social media, for example, before buying in store or online.
Consider assessing your current loyalty program (if you don’t have one, think about adopting one as another way to reward your customers for their custom) to see how you use your customer data. Analyze whether a customers’ past purchases influence the offers and promotions that customers receive? And is the online and offline buying experience linked closely enough to allow customers to move between a store, app and website completely seamless? Essentially, a business’ online, mobile and offline strategies should all be working to support and enhance each other.
2. Customer Personas
As most retailers will know, different people approach shopping in different ways. Where one customer might want to spend hours reading reviews, comparing prices and scouring the high street to find the perfect product for their needs, another may head online and buy the first item that fits the bill, regardless of reviews, price or brand. One customer might purchase that sole item they’re shopping for, or another customer may pick up a number of extra items on impulse on their way to the till.
Understanding these different customer types, and tailoring your company’s customer experience to suit each kind of shopper, can help businesses to create a comprehensive omnichannel strategy. One of the best ways for businesses to get to know their customers is to create buyer personas. These semi-fictional representations of a target audience can then be used as the foundation on which to build an omnichannel strategy, and cross-platform marketing campaigns.
The age of your customer base can have a big impact on their shopping habits and on the likely impact of an omnichannel retail approach. According to a holiday season survey conducted by the NRF in 2015, while 67% of Millennials prefer shopping online to shopping in store, just 56% of Generation Xers would choose online over offline retail. Older generations are even less likely to shop online with just 41% of Baby Boomers and 28% of Seniors happy to buy their products digitally. It is essential to consider your customer demographics in ecommerce, as your target market will determine your omnichannel strategy and the approach to take in relation to your multifaceted customer base.
Age is also a good indicator of how important social media is to your customers. Whileyounger customers are heavy users of platforms like Instagram, Snapchat and Twitter, those aged over 50 tend to prefer YouTube and Facebook. Looking at your demographic can help you to decide where to focus your marketing efforts when developing your omnichannel strategy.
Parents vs Non-Parents
Another important indicator of how someone will behave online is whether or not they have children. Almost half (49%) of parents surveyed said they couldn’t live without online shopping, with an average 61% of parents spending more online that those without children. This way of shopping is known as ‘convenience shopping’. Parents often lack the luxury of time, so they choose the path of least resistance when doing their shopping. If you can utilize omnichannel shopping to make your customers’ lives more convenient, this could increase your customer retention rates and loyalty.
Other Customer Traits
There a number of other important behavioral traits that come into play when creating customer or buyer personas. Your customers’ needs, where they live, the industries they work in and their interests and hobbies can all have an impact on the personas you create. The more information that you can garner through surveys, social media and other platforms, the more accurate and more useful your personas are going to be to your business.
3. Prioritize Your Most Common Customer Pathways
Finding out which channels your customers are currently using will help to inform your omnichannel strategy. This information can be taken from your websites’ analytics and instore data. Alternatively, you could carry out market research and speak to your customers about their preferred methods of buying. Once you have this information, you can look at ways to optimise and integrate these preferred channels in order to optimize your business’ customer experience.
4. Payments Platform
According to our Senior Vice President of Technology, Nick Aceto, omnichannel payments “allow for an increase in merchant sales, whether it’s through impulse buys or repeat business.”
An omnichannel payment platform offers customers a unified shopping experience across any channel they decide to make a purchase. These are Nick’s five top reasons a business can benefit from implementing an omnichannel payments platform:
Deeper customer engagement
If you want to keep your customers coming back, give them the simple and seamless checkout experience they expect which means giving them options for making payments.
When shopping is convenient, customers are more likely to make purchases. The more options you offer, the more opportunity you have to increase sales.
Transactions processed anytime, across any channel
We’ve talked about the importance of improving the customer experience, but let’s not forget how helpful multiple sales channels can be to the business itself. If you own a brick-and-mortar but have an online shop, you can still make sales when the store isn’t even open.
Merchant flexibility beyond POS
Another win for the business owners! With an omnichannel payment platform, you can manage transactions from more places than just your point-of-sale terminal.
An omnichannel platform with strong security solutions can protect your business and all of its sales channels, while giving your merchants peace of mind.
An Evergage study found that 96% of marketers have been able to improve customer relationships by personalizing their customer experience. Omnichannel retail offers a business the perfect opportunity to personalize individual experiences.
Darr Gersovich, the VP of marketing at Ensighten said
“Interpersonal relationships are ingrained so deeply into our social fabric that a customer will view your entire brand as a singular relationship … [omni-channel] ensures that customers receive a personalized conversation with your brand.”
Integrating social media and asking your customers to download and utilize your business’ app, allows you to tailor the shopping experience to each individual buyer.
6. Omnichannel Customer Support
Customer support is one of the most important aspects of omnichannel retail. Around 50% of shoppers will stop doing business with a company if they feel the customer service they receive falls below standard. And while 90% of customers expect consistent customer service across all channels,61% of shoppers report not being able to switch easily between different platforms when attempting to access customer service.
Creating a customer service strategy that offers buyers a uniform experience is incredibly important in today’s marketplace. Customers expect to be able to access real time support via your website, your social media profile and conventionally by telephone. They don’t want to have to repeat themselves each time they interact with a representative and they expect to receive consistent advice, information and results every time they get in touch.
Implementing an effective omnichannel strategy requires that a business place as much emphasis, time and effort on streamlining their customer service pathways as they do integrating their website, social media and bricks and mortar retail operations.
The future of omnichannel retail
As omnichannel retail becomes more commonplace, customers will increasingly come to expect at least a basic level of integration between platforms. Companies that fail to offer any type of omnichannel service may well find they lose out to competitors who are one step ahead in the race to omnichannel success.
By assessing their current omnichannel activities, investing in online and offline development and getting to know their customer base, businesses can create omnichannel strategies that resonate with their customers, boosting brand awareness and profitability in the process.