The rise of omnichannel is one of the most significant revolutions in the retail industry.
But what exactly does “omnichannel” mean, and how should retailers adapt to this sphere of influence? Keep reading to learn everything you need to know about omnichannel and get tips on how to build the right strategy for your business.
What is omnichannel retail?
Omnichannel retail is an approach which gives consumers a unified, seamless shopping experience across all physical and digital sales channels. This means your store is connected on all fronts — from the app your customers have on their phone all the way to the checkout counter at your physical location.
It’s important to distinguish a truly omnichannel experience from “multichannel” retail. Multichannel retail is selling through multiple channels, such as desktop and a physical store. But what separates multichannel from omnichannel is the unified experiences across your platforms. Having an app for your customers is an example of multichannel. Connecting that app to their in-store experience or the open shopping cart on their desktop makes the experience seamless across the board and makes it a unique omnichannel interaction.
Omnichannel is increasingly important in retail, and the modern, tech-savvy consumer is the driver of the trend. Because of our increasingly interconnected world, consumers expect interactions from their phones to run flawlessly. And consumers will ditch the app at the first sign of friction in the process. We live in a “golden age of user experience” according to Jason Spero, VP of Global Performance Solutions at Google, and that demand for ease of use bleeds into our offline lives.
Why does omnichannel matter?
Omnichannel retail matters for one major reason: consumers demand the experience. In essence, omnichannel retail provides consumers with what they crave – convenience. Namely, omnichannel gives consumers reassurance they will receive the same seamless experience no matter where, when, or how they shop.
However, just because consumers seek omnichannel experiences isn’t the only reason retailers should care. Looking at omnichannel data opens up a whole new world of opportunities for cross and upselling and illuminates a range of missed sales opportunities. In other words, by adjusting your thinking to an omnichannel mindset, you might uncover hidden opportunities for profit and margin growth.
Some examples of omnichannel retail
The phrase “omnichannel strategy” is an umbrella term, and, in truth, there is no single “right” way to optimize your business for omnichannel. Instead, there are numerous ways omnichannel expresses itself.
The ROPO effect
The “Research Online, Purchase Offline" (ROPO) effect is one of the shining examples of omnichannel retail.
In the information age, consumers have access to everything they need to know about most products you sell from sources you do not control. As a result, by the time they get to your webshop, they likely know exactly which model they want.
For many types of products though, many consumers won’t purchase online. Instead, they’ll visit your webshop (or see your Google Shopping advertisement), then go to your physical store to make the final purchase.
The reasons why vary. Sometimes consumers want the product immediately, and they simply check your online store to see if you have it in stock at the nearest location. Another common reason is consumers want to see and feel the product before buying. This is particularly pertinent for fashion products where consumers want to check the fit before paying.
Regardless of why a consumer does it, the effect of your online presence on your in-store sales might be extraordinary. That’s why you need to consider in-store sales data in your online marketing decisions on products where the ROPO effect is high. Even if you don’t sell a lot online, it might be worth investing heavily in the marketing to show consumers you carry a product in-store. Retailers can also embrace the “order online, pick up in-store” model that is gaining popularity.
Crafting user experience through augmented and virtual reality
Many retailers and companies are creating interactive omnichannel experiences for their customers with augmented and virtual reality. These experiences not only cultivate customer loyalty and interactivity, but they are also effective commercial sales points.
A shining example of this is the IKEA Place app, which uses augmented reality to help consumers understand which IKEA products will look great in their home. This “try before you buy” concept reduces major consumer frustrations that are an inherent part of the furniture-shopping experience. Just check out their video below to see how it works.
Pure online players opening physical stores
A third example of omnichannel is the high number of traditional, online-only retailers who are opening physical locations around the planet. From Amazon to Warby Parker, “pure players” around the world are adapting their businesses to capitalize on the growth of omnichannel.
This last example is interesting because it illuminates how mainstream omnichannel is: internet companies want to create physical experiences for their clients while brick-and-mortars strive to reach customers beyond their physical walls. Companies from both ends of the spectrum are adopting strategies to end up somewhere in the middle.
Tips for developing your omnichannel strategy
Omnichannel is the future of retail, but how do you build a strategy that meets your company’s goals? Let’s look at our top tips for winning at omnichannel:
Tip 1: Think about your commercial objective
Implementing an omnichannel strategy for the sake of joining the omnichannel sphere is a risky venture. Omnichannel can quickly become expensive if you don’t think about it strategically.
Ask yourself why you want to implement an omnichannel strategy. Do you want to:
- Increase customer loyalty?
- Capture more sales?
- Solve a customer pain point?
- Drive more foot traffic to your store?
Answering these questions should give you an idea of what kind of strategy you should implement. And as with all new strategies, use your commercial objective as a compass to guide your decision making.
Tip 2: Ensure the same prices across all platforms
One of the easiest ways to disrupt the consumer experience is to display one price on your app, a different one on your webshop for the same product, and a third price in-store. Since consumers are interconnected and research heavily before purchasing, they’ll notice these differences instantly. This rips them out of the experience you’ve crafted and leaves them with more questions than answers.
Keep your prices are the same across all platforms so your customers stay captivated with the experience. An easy way to do this is with electronic shelf labels.
Tip 3: Centralize and integrate your pricing and marketing data
Omnichannel is an entirely new area in retail. So the historic ways of thinking about the industry won’t lead to a successful strategy in this new realm. The traditional silo mentality of pricing and marketing as two different departments doesn’t translate well into this new, 21st century model of retail. Instead these arms of your organization need to connect and collaborate.
Click here to download your free copy of Why Pricing and Marketing Go Hand-in-Hand
Software can centralize all of your pricing and marketing information in one place. You can then use this software to change your pricing or marketing strategy according to your omnichannel strategy. Software can also help you centralize all your data points, both in-store and online, so you can have all the information you need to make more strategic decisions. With Omnia you can include internal information like your stock levels or purchasing prices with external data to build a more informed omnichannel strategy.
Final thoughts
To execute a successful omnichannel strategy, you need the right tools. Without the ability to collect, store, and analyze data points on all of your products, you won’t be able to build the best strategy possible.
Omnia’s tools give you the building blocks for your omnichannel strategy. By helping you organize and evaluate your pricing and marketing information, Omnia illuminates different opportunities that are useful metrics as you enter this new sector.
Interested in learning more? Reach out today to request a demo of our software and speak with one of our consultants about your omnichannel goals.
