What Is Omnichannel in Retail? (Definition and How it Works)

Omnichannel is a neologism describing a business strategy. According to Frost & Sullivan, omnichannel is defined as “seamless and effortless, high-quality customer experiences that occur within and between contact channels”.[1]

Omnichannel: Retail (R)evolution | Kilian Wagner | TEDxHSG

Benefits of omnichannel retail

Here are several benefits associated with taking an omnichannel approach for your business:

What is omnichannel retail?

Omnichannel retail, or omnichannel commerce, refers to an approach in retail that streamlines the customer experience so that its synchronized across all points of access for the customer. This approach creates a seamless and integrated customer experience that ensures the customer is at the core of marketing and sales efforts rather than the product or service being sold. Omnichannel retail takes a multichannel approach—not to be confused with multichannel retail—to provide the customer with various ways to shop for your product on multiple channels while still receiving the same messaging and interconnection with other channels.

This commerce strategy allows customers to shop for your product or service wherever they are, whether it be in a brick-and-mortar store, on their smartphone, on social media, on your website or at any other area where your goods are sold. The distinctions between these channels disappear so the customer has the same experience no matter where they choose to shop.

Omnichannel retail essentially reduces or removes any boundaries between marketing and sales channels so customers are exposed to a single experience.

How to implement omnichannel retail

The following are steps to take when implementing an omnichannel retail approach:

1. Determine where your target audience is spending time and shopping

The first step in creating a seamless customer experience via an omnichannel approach is to identify where your customers spend the most time and are most likely to shop. This includes the devices, platforms and mediums where your target audience makes purchases and uses on a daily basis. One way to do this is to use Google Analytics to perform an Acquisition report to see how your customers are arriving at your site.

2. Create each channel in a similar design and tone

After youve identified where your customers spend the most time, you can incorporate those channels into your strategy. An important part of omnichannel retail is to ensure each channel is similar in tone and design. This is true for both online and offline channels. Also, ensure inventory is synced on all channels to ensure customers have an accurate idea of whats available and how they can purchase it.

3. Ensure customers can shop at every touchpoint

Ann important part of omnichannel retail is making sure customers can actually make purchases from each channel. For example, if a customer starts to shop your products from a social platform, ensure that any products they put in their cart on the platform are still in their cart when they visit your website.

4. Continue modifying your omnichannel approach based on customer data

The more customer data you accumulate, the better youll be able to incorporate this data into your approach for a more personalized experience. Personalization should be a priority and can keep customers coming back to your business.

Omnichannel retail example

The following is an example of omnichannel retail:

Eddies Coffee has several brick-and-mortar stores across Michigan. Customers go to Eddies brick-and-mortar stores to purchase coffee. In addition to the physical store, Eddies has an app that customers can download on their phones to accumulate points for each purchase. The app also allows customers to order their coffee before they arrive to reduce their wait time when at the physical store.

Additionally, Eddies has a free rewards card that customers can put money on to gain additional points for their coffee purchases. Customers can load the card on the app, on Eddies website or in the physical store. Any change made to the customers card is updated across all channels.

How to choose between omnichannel and multichannel

Multichannel retail involves several channels that allow customers to engage with your business wherever they typically shop. However, unlike omnichannel retail, each channel in a multichannel approach is treated as its own individual presence. Each channel offers an individual purchasing opportunity and typically does not sync up from one channel to the next.

The following are questions to ask when determining which approach to use for your business:

FAQ

What do you mean by omnichannel?

An omnichannel strategy is a method that helps you create a seamless experience for customers across all the channels through which you sell. It encompasses the online and offline touch points of your brand, from a point-of-sale system to an Instagram shoppable post, and it’s not just for retailers anymore.

What is an omnichannel example?

Here are three pros and three cons of omnichannel marketing.
  • Pro: Customers have better access to products. …
  • Con: More channels opens the door to online competition. …
  • Pro: Customers spend more time and money in your store. …
  • Con: Multiple channels leads to weaker margins. …
  • Pro: More flexibility saves time.

What is omnichannel vs multichannel?

Six Types of Omnichannel Logistics
  • Buy online, then pick-up at the brick and mortar store.
  • Buy online, then have it delivered to the home or another location.
  • In store purchase, with the delivery either to the home or another location.
  • Drop ship from a warehouse or manufacturing center to store, home or other location.

Is Amazon an omnichannel?

An omnichannel approach aims to provide customers with a seamless shopping experience, whether they are shopping online from their phone or in a brick-and-mortar store. Therefore, an omnichannel strategy requires integration at multiple levels, including distribution, marketing, and communication.

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