Omnichannel Retailing: The need of the hour-Part 1

The term “omnichannel” has been on the top of every retailer’s mind for nearly this entire past decade. To add to that, the pandemic has forced retailers to think much more broadly and invest much more rapidly in their omnichannel capabilities.

Many retailers have been pursuing omnichannel strategies for a decade or more. Earlier, omnichannel tended to refer to the combination of a store, website and app, with limited interaction between these channels. However, this is not exactly Omni-Channel Retailing but Multi-Channel Retailing.

Let us explain.

While it can be confusing to know the difference between these two, the basic difference is about a retailer’s approach towards the consumers across all the channels.

For example, multi-channel retailing is simply being available on multiple channels where the channels usually work in silos and are not deeply integrated.

On the other hand, an omni-channel retailing approach puts the customer at the heart of it all. It acknowledges that being available on multiple channels has enabled their customers to not only quickly switch between channels but actually use various channels simultaneously.

According to research from NielsenIQ, COVID-19 fueled a 50% increase in omni-channel shopping last year, but less than half of the activity led to online purchases. It basically means that shoppers like to use digital channels also for information and not just simply as an electronic means to an end.

According to another research by Harvard Business Review, 73 % of all customers use multiple channels during their purchase journey.

That’s why, when we talk about omni-channel retailing, we mean a multi-channel approach that focuses on providing a seamless customer experience across all channels whether the client is shopping online from a mobile device, a laptop or in a brick-and-mortar store.

Let’s try to understand more about how Omni-Channel Business can improve your customer’s experience.

Let’s take an example of a person who wants to buy a new pair of spectacles from a leading brand. Let’s call the consumer Vedant and the brand, XYZ

In this example, Vedant didn’t need to repeat his journey of selecting the frames again in the store because the store executive already had the necessary information to help him try only the frames he had already shortlisted.

But customer experience is not just about buying a product, a customer wants convenience even in returning or exchanging products. Now, what if Vedant’s spectacles cracked while he was out of town.

Let’s see how Omni-channel retailing can improve his experience of returning or exchanging the product.

So, in this example Vedant had a seamless and consistent experience every time he interacted with the business on every stage of his journey as a consumer.

This is only possible in the case of Omni-Channel Retailing and not Multi-Channel Retailing.

A case in point.

Benefits of Omni-Channel Retailing

While implementing an omni-channel approach is far from simple, if it’s done properly it offers a host of benefits for both consumers as well as retailers.

Some of the innumerable benefits:

1. A Better User Experience – Since omni-channel focuses on the individual experience across devices and touchpoints instead of optimizing individual channels, the customer experience is better.
2. Cohesive Brand Strategy & Identity – When retailers focus on the overall experience and work within guidelines to target each channel, they get a more comprehensive brand strategy which translates into increased loyalty and more targeted messaging.
3. Increased Revenue – An omni-channel approach encourages customers to engage with a brand across multiple touchpoints and channels, and research shows that customers that engage with multiple touchpoints tend to spend 30 percent more than other customers who only engage at a single touchpoint. So, these increased, diverse engagements at each stage of the buyer’s journey can help increase revenue.
4. Better stickiness and loyalty- Customers want to buy in the way that is most convenient for them. An omni-channel approach offers them a freedom to interact with the retailer on as many channels as they want and get a seamless experience on all channels. This is the reason why companies with omnichannel customer engagement strategies retain on an average 89% of their customers, while other companies are only able to retain 33% of their customers.
5. Better Attribution Data – Going truly omni-channel doesn’t just extend to a user’s experience with your brand, but also with your data analytics as well. By tracking engagements across channels, brands get a better understanding of what the customer journey looks like. And, this information can be put back into your strategy to optimize your product, inventory and pricing according to what the consumer wants, further you can build more targeted campaigns and optimize your media spend

The Human Aspect of Omni-Channel Retailing

Like all the approaches toward running a successful business, even the omni-channel approach comes down to the most important thing: “Motivation of the Human Aspect”.

To develop a successful Omni-Channel Retailing approach, it’s important to reimagine the structure of incentives, OKRs and cultural elements in an organization so that the human aspect of the organization work in harmony with business strategy and are motivated to become enabler rather than detractor in the journey of consumer.

The reasons why omni-channel approaches face resistance from the employees across channels is the lack of motivation in employees to support it.

The perspective of Store Employees

The store employees only get incentives for promoting sales through their stores, which demotivates them from promoting sales through online channels.

The perspective of Digital Marketers

Digital marketers show resistance to promote buying from stores if their performance is judged solely on the basis of digital sales.

So, clearly, the incentives need to be redesigned to motivate and enable employees to support other channels rather than creating friction in the journey of the buyer.

We hear you ask what is the key takeaway from this blog?

I would say that the success of the omni-channel strategy depends on how holistic and comprehensive the business is. But if the model is built properly, it can not only foster brand awareness in the mind of the customer, but also leads to improved engagement, increased ROI and sales, and also enhanced customer retention and loyalty.