How to transition into an omnichannel retailer

By Matt Stokes

For many customers, omnichannel represents a kind of retail nirvana. A friction-free, stress-free way to select, buy and return products, regardless of where in the sales channel they bought them.

Whether the customer uses click and collect or click and return without the need for the original payment card, or where goods unavailable in-store can be ordered on mobile devices or an in-store booth, a seamless customer experience is a must and this presents a big challenge.

In this blog, everything you need to know about omnichannel is broken down into clear, bitesize points. Let’s get to it.

What is omnichannel?

Omnichannel is essentially a multi-channel sales approach that provides customers with a seamless, personalised experience. Whether a customer interacts with your brand through a physical store, app, website or social media, they receive the same experience.

Although omnichannel retailers use multiple channels, they are not the same as multi-channel retailers. The latter reaches users on numerous platforms, but the customer experience is not integrated. In omnichannel, all channels work together.

In the words of Hubspot  - ‘All omni-channel experiences will use multiple channels, but not all multi-channel experiences are omni-channel’.

Electronic network

Why use omnichannel?

A recent survey of 46,000 shoppers carried out by Harvard Business Review found that a staggering 73% used multiple channels during their shopping journey. The same study revealed that these ‘omnichannel customers’ are more valuable to retailers than those who only interact with organisations through a single channel. On average, they spent 4% more in store and 10% more online, with spend increasing for every additional channel used.

Omnichannel uses data to provide customers with a more personalised experience. This reflects the market’s current emphasis on personalisation based on knowledge of customer preference, which is moving beyond simply tracing previous orders.

New ecommerce entrants such as Dressipi are using machine learning and algorithms to help retailers offer an online shopping experience that can make recommendations based on a customer’s preferences. And it’s working too – in A/B tests, Dressipi’s technology is proven to deliver a 5-8% increase in net incremental revenue per visitor.

Woman holding phone

Data collected from multiple touchpoints can, in turn, give businesses valuable insights into customer trends such as demographics and buying habits. This enables them to create offers that encourage customers to visit physical stores, improving the likelihood of impulse buying (Jacada).

But, perhaps most importantly, a study by Aberdeen (conducted back in 2013) found that companies with effective omnichannel customer engagement strategies retained 89% of customers on average. For companies with ‘weak’ omnichannel strategies, the average was just 33% of customers. In a market where customers are becoming increasingly fickle, retention is key for retailers to succeed.

How a global premium designer brand is transitioning in increments

From working with a broad range of fashion retailers operating multiple models, Coeo’s experience shows us that the more sales channels a fashion retailer has, the longer this process can take. The same applies for high profile bricks-and-mortar brands who are taking their first steps into ecommerce.

For the technology team at a global premium brand that is creating a new store concept, the road to omnichannel retailing represents a significant challenge. Rather than attempting to tackle it as one major project, they’re electing to take a series of considered steps to get there.

This approach is backed up by research carried out by SIX Payment Services, who have noted an increased appetite amongst their fashion retail customers for services based on customer demand.

Suits in a shop

How to plan your move to omnichannel

First, you should turn to your data! Customer information you have collected over the years provides key information for creating personalised messages and improving engagement, such as:

  • Key demographics (i.e. age, gender, location)
  • Purchasing habits
  • Pain points

It’s very important to identify the channels your customers use so that you know where you need to go in order to reach them. For example, if your customers tend to use Instagram or Snapchat rather than Facebook, this is where you need to focus your efforts.

You should also look at your sales funnel and identify which pieces of information or content your customers will require at each stage, as well as touchpoints they have with your brand.

As ecommerce platform company Shopify says, ‘One major key to designing an omni-channel retail strategy is making every touchpoint shoppable. Just like Disney does with their mobile app, website, and theme parks… Every time you have an experience with Disney, they have the opportunity to make sales.’

Social networks on a phone

Have a clear strategy in mind

Once you have your data and a clear idea of your sales funnel and touch points, it’s time to start forming a strategy. When moving to an omnichannel service, it’s essential to have clear goals and a clear plan.

If you aspire to become omnichannel, you need to be careful not to lose sight of operating efficiently to best cater to customer needs. For retailers that operate bricks and mortar stores as well as ecommerce sites, they need to ensure that the buyer journey is integrated into both the front of house and back office.

For example, a customer should not have to scan their receipt multiple times in order to receive different services, such as gaining loyalty points or returning items: this should all be done automatically. Equally, key information like stock availability should also be updated automatically at the same time.

Just as the global premium brand did, retailers looking to move to omnichannel may find it more viable to do so in stages. Becoming an effective multi-channel retailer is a good start – this will give you time to find the best, most integrated technologies to use to smooth the purchasing or returns process, as well as allowing time to learn from any mistakes.

The future of retail is omnichannel

In a market becoming increasingly focussed on personalisation, creating a seamless digital and real-world experience provides retailers with improvements in both sales and customer loyalty. The key to this is an effective use of data combined with a robust strategy and efficient technology. Making the transition can be a slow process, but can ultimately enable businesses in an increasingly pressurised sector to target services to meet demand.

To read the full report, click here: Data is the New Black

Matt Stokes, Solution Architect, Coeo

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