Why is omnichannel retail important?

Marketing
Apr 7, 2022
Sean McTiernan
Editorial Content Wrtier
8
Min to read

In the early days of the Covid-19 pandemic, e-commerce in the United States experienced a projected 10 years growth in just 90 days. With this shock to consumption patterns, customer expectations have grown too. Part of this shift is a forced move to multi-channel retail for customers and brands, which has rewarded those who have put effort into making every interaction consistent — and left companies who offered a disjointed experience behind.

This consistent experience across all channels is known as the omnichannel approach. A business employing an omnichannel strategy provides a seamless customer experience whether the client is shopping online from a mobile device, a laptop or in a brick-and-mortar store. This kind of consistency creates a much stronger bond between customer and brand with purchase frequency in omnichannel services proving 250% higher than single channel.

In this primer we’ll cover the topics below to give you a head start on planning your omnichannel retail strategy.

  • The defining elements of omnichannel retail
  • A look at who’s getting omnichannel retail right.
  • What to consider when building an omnichannel plan of your own. 
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What is Omnichannel?

A unified experience 

Put simply, Omnichannel offers a unified experience across all platforms. If a customer researches a product online before scanning their loyalty app while purchasing the product in-store, a business with an Omnichannel approach should be able to capitalize on all those touchpoints. For many businesses, these would still be three entirely separate actions with no recorded connection. However, now that companies that employ omnichannel engagement strategies retain an average of 89% of customers, omnichannel is no longer an aspiration but a reality in the world of retail. 

Consistency 

The watchword for Omnichannel is “consistency.” Any service a customer can take advantage of in one channel should also be replicated in every other channel. 

For instance: customers who order online get a product directly shipped to their home. Offering in-store shipping closes the gap between the two channels. Similarly, returning a product in-store tends to be straightforward while online it can be much more painful and actually end up costing the customer money. Allowing for in-store return of products purchased online once again gives the best of both worlds.

Neither of these examples is particularly complicated, in fact they may seem obvious to a customer, but they can often run contrary to how a business is organized, with little communication between channels. Frustrations can arise when a customer experiences inefficiencies based on business assumptions. The key to an omnichannel approach is understanding the business like a customer.

Why is it important?

Omnichannel is important because, in a world increasingly driven by comparison shopping, customers are looking for other incentives to follow a brand. Omnichannel customers have a life time value 30% higher than those who only use a single channel. When a business acknowledges the reality of how customers interact and use that information to make their product more engaging and frictionless, they give themselves a serious competitive edge. 

What Does An Omnichannel Retail Success Story Look Like?

“The first step in exceeding your customer’s expectations is to know those expectations.” – Roy H. Williams

A holistic customer experience

While omnichannel retail fosters plenty of innovation, the main focus needs to be on reducing friction in the customer journey. Omnichannel retail’s real power lies in ensuring customers do not see each of a brand’s channels as an individual business. Sephora is a beauty and personal care retailer and industry leader in the omnichannel field. Their mobile app is packed with tutorials, product launch information and beauty news. When customers enter the store, location-based marketing serves them a map showing in-store deals catered to their interests. If something they’re trying is out of stock in-store, make-up artists can order an item and have it shipped directly to the customer’s home. 

This consistency and convenience across all channels transform the customer experience of Sephora from a retail outlet to a destination and resource. It’s not just where they go to get beauty products, it’s the base for their interaction with the beauty world.

Social Retail

Though Tiktok is gaining fast, few social channels are more synonymous with “outfit inspiration” than Instagram.  In 2016, it was estimated a third of Instagram's half a billion users purchased a piece of clothing after seeing it on the platform. In April 2019, Instagram added "Checkout on Instagram”, allowing products to be sold directly through the Instagram app. Now 44% of Instagram's 1.1 billion users are shopping directly through the platform at least once a week. 

The move from advertising to direct retail on Instagram is a great example of the Omnichannel approach. Brands can showcase their product lines, execute ultra-specific promotion campaigns, foster a community by rewarding customers who are tagging them in their posts and allow these customers to buy from them directly.

The Barbour clothing brand may be 125 years old but that hasn’t stopped them from making huge strides with Instagram shopping. Adding shopping tags to posts about the history of their brand has increased Instagram sales by 42% and web traffic from their Instagram page by 98%.

Omnichannel Support

Social media’s role in omnichannel strategy doesn’t stop at encouraging enthusiastic customers. No matter how smoothly a company is running, there will always be customers who have questions or experience issues with the product. If there’s a platform they’re used to speaking on, it’s natural they would expect to be able to reach out to brands there too.

Admittedly, the “always-on” component of social media does make this quite a big commitment, with 57% of clients expecting a 30-minute turnaround on nights and weekends. But when a company gets social support right, it can make a huge difference. UK phone giant BT managed to both improve customer satisfaction with their social support strategy while also lowering costs. In fact, customers took care of a lot of the questions themselves. Once one query about an outage or issue in a specific area is answered, retweets can get the answer to relevant customers much faster than tackling individual tickets.

Similar to customers spreading support messages organically on Twitter, dedicated communities for users of a product/brand can also develop on discussion boards like Reddit or social networks like Facebook. Having a company representative join to answer questions and open support tickets fosters a more holistic customer experience and is a source of invaluable customer feedback. 

The key to successful support is almost the most basic tenet of Omnichannel Retail: consistency. 72% of customers expect representatives to know their issue and order history and 89% of consumers are frustrated when they have to repeat the details of their issue. 

What to prioritize when Developing An Omnichannel Retail Strategy?

We’ve seen some great examples of how omnichannel can transform how a retail business interacts with its customers. Implementing this kind of change takes careful planning and great communication within a company. 

Here are some key considerations when to keep in mind when considering the move to omnichannel:

  • A Single Source of Truth
    A customer’s view of a business is very different from how many businesses have come to perceive themselves. Customers don’t know that your online operation is siloed from the rest of your company because of how it was developed. For instance: they aren’t aware online and phone support are separate systems because they’re being managed by two separate outsourcing companies and won’t make allowances based on that. 

    Customers expect to be treated as individuals. To do this, a single source of truth for customer information must be established when developing an omnichannel strategy. The more unified a company is behind the scenes, the more unified the customer experience will be.
  • A Focus On Long-Term Customers Over Novelty
    Innovation makes for a compelling retail experience and a great way to convert new customers but in the long run, convenient customer experience must win out over novelty. It shows you understand how the behaviors of your customers have developed and are responding to their needs.

    This is why rewarding customers with a personalized loyalty program is so powerful. In this case, you’re not just taking general customer behavior into account but getting to know the individual customer and how to make their individual customer journey more frictionless. Offers and promotions redeemable across every channel make life means customers can benefit from their loyalty in a way that makes sense to them. 
  • Customer Motivations Over Received Wisdom
    In an episode of the sitcom Seinfeld, George Costanza has a sudden revelation while lamenting his life choices: what if every instinct he has is wrong. Briefly, by reversing every gut feeling he has, his life improves dramatically. While a company’s omnichannel strategy should not be this drastic, flying in the face of business assumptions can often yield surprising results. 

The march of progress could lead you to believe that online retail will one day entirely supplant brick and mortar stores. However ake a look at Amazon Go, a supermarket chain enhanced with omnichannel features that automatically charge purchases to a customer’s Amazon account, and it’s clear reports of the death of brick and mortar may have been greatly exaggerated. Meanwhile, Zalando have also learned from brick and mortar, allowing for free returns from any Fastway courier outlet. 

Since 2013, Disney has offered a Magic Band program that allows customers to redeem online bookings for rides, store photographs taken by staff and charge meals to their Disney account. It briefly looked like Disney was going to phase out the Magic Band as the functionality had been replicated on mobile. However, they have repositioned the Magic Band as a souvenir item with the same functionality and plan to add features like customized ride experiences and haptic feedback later this year. A souvenir that you can buy in a Disney store or online before your visit, reuse, maximizes the ease of your stay at Disney and provides you with unique experiences is one of the ultimate examples of Omnichannel thinking. 

Omnichannel Promotions With Talon.One

Talon.One’s promotion engine is the key to creating the hyper-personalized promotion experience that your business and your customers deserve. By using Talon.One’s rules builder, every piece of customer data you have can be leveraged to create in-depth, tailored promotions that reward customer engagement with a bespoke experience. Talon.One provides the power and scalability to ensure your customer’s experience stays consistent and you can keep delivering on the promise of an individual experience for each customer without running into any technical issues.

Summary

Omnichannel retail is important because a consistent, frictionless customer experience increases customer loyalty, improves a customer's perception of the brand and leads to greater customer lifetime value.

Successful omnichannel approaches to reducing customer fiction can be both innovative and straightforward. The common thread is the focus on consistency and understanding the business from a customer's point of view.

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