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You might have heard that brick-and-mortar retail is doomed, and that consumers only want to shop online. Neither is true. Instead, people want it both ways. Enter omnichannel retail, which has emerged as a successful sales strategy, engaging consumers from multiple fronts and enabling a seamless shopping experience.
This article explains what omnichannel retail is, the benefits and challenges associated with it and how it differs from a multichannel strategy. It also offers guidance on executing your own omnichannel retail strategy – from mapping customer journeys to personalising experiences. You’ll receive real-world, practical examples and learn why all the signs indicate that omnichannel will be the future of retail.
What is omnichannel retailing?
Omnichannel retailing is an integrated approach to selling that enables customers to browse, shop and purchase through a variety of channels, such as a physical store, social media profile, website and mobile.
Omnichannel experiences take many different forms. For example, a customer might purchase an item using a mobile app, pick it up at their local store, and receive a post-purchase email with a discount voucher as a thank you. Alternatively, they might order an item in a specific size in a physical store, use their digital loyalty card to collect points (which then appear in the app), and track home delivery via their online account. What both of these experiences have in common is that they encompass multiple channels and they’re seamlessly connected.
Before the web and mobile shopping, customers had limited options to shop around and plan for a purchase. These days, they may interact with your brand through their favourite social media platform, read about the business on your company blog, or watch a YouTube video about your product before making a purchase decision.
That’s why omnichannel retail goes hand in hand with omnichannel marketing. With an omnichannel marketing plan, business owners and managers don’t look at each sales channel in a vacuum. They look at how each opportunity to purchase may overlap and lead to a single, unified customer experience.
What is the difference between omnichannel and multichannel?
An omnichannel approach integrates all customer channels (email, website, social, etc) to create a seamless experience, whereas a multichannel strategy utilises these same channels independently.
Imagine you buy an item from your favourite retailer’s website. Instead of home delivery, you opt for in-store pick-up. Order updates automatically start appearing in the smartphone app, allowing you to track the status of your purchase and collect it when ready. Purchase points have been added to your digital loyalty card. When you log onto Instagram, you see tailored ads for similar items from the same brand in your feed. And once the order is processed, you receive a discount coupon via email for your next order. Your whole experience is integrated and connected as part of a seamless omnichannel strategy.
Multichannel retailing utilises the same channels – like a website, an app, a brick-and-mortar store, social media accounts and a newsletter – but it lacks the integration of an omnichannel approach. For example, when you place an order through the retailer’s website, you won’t receive in-app updates, targeted ads or a tailored newsletter based on the products you frequently buy.
Consumer behaviours are pushing the move to omnichannel
As the retail landscape has changed, so have customer behaviours. UK consumers are increasingly embracing eCommerce and the omnichannel shopping experience, according to a paper published by the Economic and Social Research Council (ESRC). A report by Barclays also states that integrating in-store and physical retail experiences “is fast becoming a standard industry expectation.”
In a study by the Harvard Business Review, researchers found that consumers made frequent use of a retailer’s various touchpoints. They like checking prices on an app, using in-store digital tools like tablets, and buying online and picking up in-store. The research also found that the more channels a shopper used, the more money they spent.
Why is omnichannel retailing important? Here are 3 reasons
1. Expands access
Perhaps the most important way that omnichannel retail benefits your business is by offering consumers more opportunities to buy your products and services. If you are strictly a brick-and-mortar store, customers can only shop during certain days and times of the week. They also have to be close enough to easily visit your business inperson.
But if you offered an eCommerce option, customers could shop from anywhere, and at any time of day or night. They could also search online to check products and prices before making the trip to your store. This is something they might not have been as willing to do before knowing what you had in stock.
2. Reaches potential new customers
In-person events are a great way to introduce your business to a wider audience. They are also a great way of creating a more personal connection with previous customers. Consider speaking on a panel, offering a class, or organising a meetup. Anything that gets you in front of people and making connections helps make an impression on potential customers and raises awareness of your business.
3. Creates a seamless experience
An important benefit of an omnichannel strategy is that it can remove some of the hassles of the in-store shopping experience. Searching the aisles for a product or waiting in long lines to pay can be a pain. Options like buying online and picking up in store, or buying online and returning in store, are customer-friendly practices that integrate the online and offline experience. Similarly, offering diverse methods of payment, like buy now pay later (BNPL), across your online and in-store experiences, will smooth your customers’ path to purchase.
3 challenges that come from omnichannel retailing
1. Technology integration
A truly integrated omnichannel experience should feel seamless and effortless to customers. But there is a lot of work that goes into making it seem so simple. Syncing your inventory, providing excellent customer service, and offering competitive shipping options are all challenging aspects of the omnichannel strategy for retailers.
2. Established customer preferences
While the data shows that a majority of consumers are in favour of omnichannel experiences, it is not true in all cases, and there is often important nuance. Perhaps surprisingly, research by Kearney found that 81% of Gen Z prefer to complete purchases exclusively in a physical store (although they typically conduct research online). Similarly, a study by Age UK found that in-store shopping is prevalent among over-65s, yet nearly half of this group feels overlooked by retailers.
The key insight for retailers is not to force omnichannel on customers that do not want to engage across multiple touchpoints. In addition, channels should be fully self-contained: A customer should be able to purchase in-store, for example, without having to download an app or hand over an email address to receive a receipt.
3. Personalisation
It might sound counterintuitive, but the more channels a customer has, the easier it can be for them to slip through the cracks. It’s important that retailers create a personalised, curated shopping experience. This is a good way to win customer loyalty.
Examples of omnichannel retail
Major retailers are leading the charge when it comes to omnichannel shopping, implementing services and loyalty programmes that improve the customer experience by seamlessly integrating multiple channels. The independent coffee chain Ezra & Gil has a strong brick-and-mortar presence, but customers can still face long lines and crowds. The company addressed that issue by introducing an app that allows customers to order a drink through their mobile device and then pick it up at the counter in their local shop. This allows them to skip the line, save time, and feel incentivised to come back.
How to create an omnichannel strategy for retail
Every business’s omnichannel retail strategy is a bit different, so take the time to think about your goals, resources and company culture when creating one of your own.
1. Map customer journeys
An omnichannel strategy should be based on a clear understanding of how your customers interact with your brand. Customer journeys are rarely perfect or linear – they’re messy and unique to individuals and how they make purchase decisions. For that reason, mapping these journeys involves creating a model that encompasses all the different channels a customer might use but isn’t prescriptive about what order they use them in. This provides a foundation for connecting them to create fully integrated omnichannel retailing.
Follow these steps to map your customer journeys:
- Build out your ideal customer profiles (ICPs): Create different personas for each major segment of your target market. Include their preferred channels for discovery, purchase and fulfilment. For example, “Middle-income women in the 25 to 35 age bracket that use Instagram and TikTok for research and purchase predominantly using a mobile app, usually opting for home delivery.”
- Visualise all possible touchpoints: Create a visualisation that shows all potential touchpoints in an approximate order, from discovery to purchase and ongoing loyalty. The visualisation should represent a myriad of different possible journeys in one flow. In reality, customers will rarely follow the process in a linear way, but it allows you to see how different touchpoints can interact.
- Identify connections and gaps between touchpoints: For all touchpoints, analyse how your customers move between them. Do a large number of customers move from Instagram to your online store, for example? Or from newsletter emails to the app? This step highlights priorities for integration by showing you where the gaps in your current customer experience are. If there is little to no movement between channels, consider if this is because they are not adequately connected.
2. Consider each channel
From brick-and-mortar to desktop to mobile to social, think about the functionality that you are equipped to offer.
- Do you want to offer shoppable Instagram posts, like Ted Baker?
- Would you like to allow customers to order online and pick up in-store, like Argos?
Think about what you are equipped to offer and perhaps roll out new experiences gradually so that you are prepared to provide customers with a seamless experience. If you roll out too quickly and disappoint customers with subpar service, it can be difficult to win back their trust.
3. Align inventory and experience
How do your eCommerce channels look? Do they match the design and tone of your brick-and-mortar store? You want to make sure that your online channels closely mirror the in-store experience. One of the trickiest parts of omnichannel retail is syncing up inventory across channels so that employees and customers have an accurate sense of what is available and how they can get it.
4. Get employees on board
When you’re rolling out an omnichannel strategy, it’s key that you train your staff on how to create a seamless experience. Educate them on how to use various channels to provide the best customer experience possible. If employees work on commission, consider incentivising them when they help customers find something online that isn’t available in-store. This can help them embrace eCommerce and not see it as the enemy.
5. Make personalisation a priority
Don’t let customers get lost in your omnichannel retail strategy. Use customer data – like previous purchases – to create a unique experience. Suggest products they might like, alert them to sales at their local store, and offer them a discount when they haven’t shopped for a while. After all, customers are the heart of your business, so make sure that your focus on omnichannel makes their experience even better.
The future of omnichannel in retail
As online technologies and consumer preferences evolve, it’s crucial to maintain a forward-looking marketing and sales plan. Keen business owners and managers are aware that some of the most popular social media platforms didn’t exist 10 or 20 years ago and keep an eye on new retail developments.
Research in the Square Future of Retail report found that a majority of consumers “liked and would engage with” technologies like mobile apps and automated payments. The report also discovered that customers were craving both in-store and online touchpoints as part of an omnichannel experience.
When it comes to fulfilment, customer preferences are shifting towards a hybrid model. Research by Barclays found that click-and-collect purchases account for 8.4% of UK retail spending, with that figure expected to grow.
The end-to-end omnichannel shopping experience may involve discovering a product or service on social media, visiting a retail store without making a purchase, and finally completing the sale online, expecting quick delivery through a major shipping company. With so many potential customer touchpoints and a possibly lengthy sales cycle, it’s easy to see why omnichannel retail is the future of retail.
Omnichannel retail FAQs
What is an example of an omnichannel retail strategy?
Omnichannel retail strategy is the unification of digital and physical channels into a connected shopping experience. In practice, a retailer will map out all of the touchpoints through which customers interact with their brand (in-store, in-app, social media, email newsletters and paid ads) and explore how they can sync them using data, technology and automation.
For example, a retailer may offer click-and-collect during online checkout, or track customer behaviour in a mobile app to offer tailored recommendations and discounts. Retargeting ads, auto-updating customer accounts across website and app storefronts, personalised promotions based on customer data, and standardised messaging across social media are all examples of how an omnichannel retail strategy might be executed.
What is the goal of an omnichannel retail strategy?
The goal of an omnichannel retail strategy is to create a consistent, connected experience across all customer touchpoints. Omnichannel retailing reduces friction while improving conversions, retention and, ultimately, revenue.
How does omnichannel retail improve customer loyalty?
An omnichannel retail strategy improves customer loyalty by eliminating the frustration that is caused by having to switch between multiple, disconnected channels. This makes the customer journey faster and smoother while also providing more options – to pick up in store over home delivery, for example. In addition, because all data is synced, customers can immediately receive targeted ads or rewards from loyalty programmes, further increasing satisfaction.
