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What is omnichannel retail and why is it important?

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Those in retail need to understand customer behavior in the effortless economy. 

Commerce is moving closer and closer to the consumer, so it is becoming more and more critical for businesses to be where their customers are and providing them with convenience.

What is convenience? According to Linnworks research, one important feature for consumer is frictionless commerce that works across their devices. Achieving this requires embracing omnichannel retail, a strategy that offers convenience by streamlining the customer experience.

What is omnichannel retail?

Omnichannel retail involves creating a seamless experience across a retailer’s owned platforms throughout the customer journey. The goal is to ensure the overall customer experience is consistent across all owned channels. In addition, omnichannel provides the customer with a range of options across their journey to create the type of shopping experience they want to have.

What is the difference between omnichannel and multichannel retail?

It's easy to confuse omnichannel with multichannel retail. Not only do they both make use of multiple platforms, they also share many of the same concepts. Using a multichannel strategy, retailers leverage omnichannel while expanding their reach out to other sales channels, such as marketplaces and social channels, for reaching more customers and growing sales. Omnichannel provides a seamless shopping experience between a retailer’s channels, whether a customer is on a laptop or a browser on their mobile device, for example.

Multichannel retail expands sales channels and allows customers access to several selling channels. Multichannel retail places products in front of customers where they are already shopping. A multichannel strategy still has omnichannel at its core. The strategy places a retailer's products wherever consumers are, rather than relying on customers to find the retailer and purchase on the retailer's owned platforms, allowing brands to grow their reach and influence.

Read more in our Total Commerce Guide to Growth

Why is omnichannel retail important?

Omnichannel retail benefits not only your customers but also your relationship with them. Moreover, convenience is highly-valued by modern consumers as proven by Linnworks’ recent study:

  • 78% of respondents value convenience more than before the pandemic
  • 76% of shoppers consider convenience as a top priority when selecting a retailer
  • 46% of customers say convenience overrides cost savings 
  • 38% now expect convenience to be standard

By satisfying the modern consumers’ desire for a seamless experience, omnichannel retail can help you accomplish the following.

Be where your customers are 

Omnichannel retail is key to a Total Commerce strategy — Total Commerce means conducting commerce wherever your customers are. Again, implementing a multichannel strategy with omnichannel at the core helps you stay top of mind no matter where your customers find you, whether it's through social commerce, marketplaces, direct-to-consumer on your website or an in-store experience. 

Integrating these various channels pays off. These platforms give customers an opportunity to shop with you where they want to spend their time. A discovery of your brand on a marketplace, for example, can draw customers to your owned physical and online store.

Increase retention rate

Nine in ten customers will choose a site that offers a frictionless shopping experience, according to Linnworks. And according to Invesp, when omnichannel customer engagement strategies are in place, the customer retention rate can go as high as 89% compared with 33% among those with weak omnichannel approaches.

Maximize customer lifetime value

Omnichannel retail streamlines communications between the brand and its customers. It’s far too important to provide excellent customer service and maintain your brand consistency at the same time. In fact,  a Harvard Business Review study shows customers have spent 4% more in physical stores and 10% more online than with single-channel companies.

Identify and understand customers' journey.

An omnichannel retail strategy allows you to track your customers from start to finish. You have access to insights that enhance your business in the long run. Omnichannel makes it possible to personalize your approach to your customers. According to research from Linnworks

  • 60% of consumers say sharing personal information makes shopping more convenient 
  • 51% enjoy the personalization sharing data brings 

“In today’s world of hyper connectivity every customer touchpoint is an opportunity to collect valuable data and insights, deliver an engaging message and elevate the consumer experience” 

  • Darin Rabb, Lululemon’s Senior VP for global brand experience, speaking at Linn Academy 2020

Receive more references and recommendations.

An omnichannel experience gives your users something positive to share with their friends and family. And if you don't know it already—both Word of Mouth and referral marketing are still some of the most effective marketing strategies to this day. Here are some of the most recent statistics from Invesp

 

  • Word of mouth marketing accounts for 13% of consumer sales and drives consumer spending by $6 trillion annually. 
  • Marketing impressions via word of mouth generate 5x more sales than media impressions.
  • A friend's recommendation increases trust and buying power by 90%.

Increase efficiency and visibility

With a comprehensive database accessible through multiple platforms, the omnichannel approach increases the visibility of your products and promotions. This also bodes well for your customers because they can access the information they need wherever they please.

What are examples of omnichannel retail?

Among the most common omnichannel retail examples are brands like Disney, Starbucks, and Nike. These companies have their omnichannel approach down. To help you understand omnichannel retail better, here are a few brands that deserve the same recognition for their strong omnichannel strategies:

Oasis’ consistent shopping experience

Oasis, a popular UK fashion brand, dominates omnichannel retail. If you add products to your cart on any device, they will remain there — and even pop up when you visit Oasis’ website. This is a great strategy because Linnworks discovered that 51% of users have ditched purchases because they had to start again on a new device.

In-store experience is just as interwoven. All sales associates are geared with iPads, so they can check your online activity, saved items, and other relevant information. Best part? You can also pay with the iPad. This improves the experience even further by eliminating the need to stand in line at the checkout.

Sephora’s product reordering

Shoppers have been able to shop with Sephora both in-store and online for quite some time. And if you want to purchase the same product from them again, you can easily find your recent orders on the Purchase History page, along with dates and locations (online or in-store) of purchase. 

Value City Furniture’s flexible shopping

Many customers prefer to see products before committing to buying them. This is precisely the case when purchasing furniture. For this reason, Value City Furniture introduced "Easy Pass" to keep customer information in one place.

With this new feature, customers visiting the stores can add a piece of furniture to their account if they need more time to decide on purchasing the item. It also works in reverse. Easy Pass also allows customers to keep a digital list so they can finish their purchase in-store after they have seen the product in person.

Oakley’s personalized services

Oakley's omnichannel approach allows them to keep tabs on each customer, with real-time updates online and in-store. Therefore, customers and store staff can easily access the needed size and prescription information, making the process a lot smoother for everyone involved. 

Nordstrom’s product returns

Nordstrom streamlines the painful process of product returns by making it omnichannel. By starting the return process online, customers can decide which platform is most convenient for them. Choices include store returns, mailing the items back, or curbside pickup. Product return flexibility satisfies the 72% of consumers whose purchasing decisions are influenced by return policies, according to Linnworks research


Tommy Hilfiger’s exclusive pricing

A selected few, such as teachers, military personnel, and students could only enjoy their Tommy Hilfiger discounts at physical stores in the past. But since Tommy integrated eligibility verification into their omnichannel retail capabilities, they now offer these exclusive prices on any platform without worrying about non-eligible customers taking advantage of them.

What makes a great omnichannel experience?

A smooth omnichannel retail experience requires businesses to understand customer journeys across channels and devices. Though it sounds simple, there are actually quite a few moving parts at play.

You can get started with these useful tips:

Analyze your content

Informational content allows you to bridge the brand awareness gap, so make sure your brand information is consistent across all platforms--from website to social media pages to the shopping bags you use in-stores.

Also, make sure to embrace similar content across your platforms. Consistency is key when it comes to winning customers over. In fact, 90% of customers expect a consistent brand experience across all platforms. Something as simple as using similar imagery and copy across all your digital platforms can go a long way since your customers will recognize your brand and won’t create confusion regarding what action your customers should take.

Consider your customer's journey

If you're targeting everyone, you're targeting no one. 

That's why it pays to get to know your audiences and their journey so you can craft the perfect omnichannel experience for them. You can categorize your customers based on their common behavior patterns by analyzing all your data. From that point on, create a journey tailored to each type of customer.

This part may be a little tedious, but it's worth it. You also don't have to do everything at once. Instead, begin chipping away at it by focusing on the origin of your customer. This helps you get an idea of their decision drivers and what compels them to take action.

Comply with data protection regulations

Thanks to technology, gathering insights about customer behavior has gotten a lot easier. However, you also become responsible for protecting the sensitive data customers share with you. This can be challenging with an omnichannel strategy, but you need to remember to set the groundwork for ensuring compliance with laws such as GDPR (General Data Protection Regulation). 

Ryan Grogman, Managing Partner at Retail Consulting Partners provides a helpful tip: "Giving customers more control over how retailers use their data can help to build back some of the lost trust and allow retailers to take more advantage of the omni-data that is being collected to curate a more personalized shopping experience regardless of channel."

Prioritize responsive web design  

Making mobile experiences available is one of the first steps towards achieving an omnichannel experience. To give you an idea on how many potential customers await you once you offer mobile commerce — Millennials and Gen Z (91%) are more likely to start purchases on mobile devices, according to research from Linnworks. 

Furthermore, 58% have dropped ecommerce stores that are difficult to use. So don't forget to create a mobile-friendly website by using large images and simple navigation so that mobile users can easily find what they are looking for.

Use the right tools and technology

When delivering omnichannel customer experiences, it's essential to be where your customers are. And while providing seamless service across multiple channels is a challenge, technology has made it easier than ever to implement, track, and evaluate your retail strategies. 

Manage inventory across all channels 

Commerce is moving closer to the consumer — the platforms where consumers spend their time are becoming more and more commerce enabled. As a retailer, you must be prepared to sell on multiple channels and connect all of your commerce operations.

As your sales channels expand and as your business grows, manage and automate your commerce operations with a Total Commerce solution.

Implement a Total Commerce Approach to Growth

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