Omnichannel has been with us in retail for more than a decade and seen, by many, as a panacea for the challenges our sector faces now and going forward. Trumpeted as the new way to boost revenues and more importantly, accelerate customer growth, the question that’s asked is whether it has delivered against its promise.
What is omnichannel?
According to Wikipedia, it’s “a cross-channel content strategy that organisations use to improve their user experience. Rather than working in parallel, communication channels and their supporting resources are designed and orchestrated to cooperate.” Interestingly there’s no mention of the customer.
Put more simply, it’s about a uniformed customer experience across every touch point from the physical environment, though mobile devices and apps, to the retailer’s website.
Despite being around for the past ten years or more, a survey conducted by Forrester, on behalf of KPMG suggests, that only 28% or fewer retailers felt they are getting an unacceptable return on any individual omnichannel KPI. Here at BetterCommerce, we believe that much of this disappointment, however, comes from a lack of understanding of how to effectively analyse, define and implement a successful omnichannel strategy that truly delivers results.
The heart of retail
Omnichannel is not new, but it is still at the very heart of retail and will continue to be so with innovations such as artificial intelligence. Elsewhere, Covid-19 has also shone a light on retail and the advantages omnichannel presents for both customers and retailers. Customers are not just discerning, but also want to be able to buy at any time, and in the way they want, whether it is in a store, online or via an app. Recent shutdowns of many highstreets have hit retailers hard, especially if they have had to rely on bricks and mortar outlets.
Embracing omnichannel delivers a range of benefits to retailers if they execute and embrace it correctly. With the instant, or near instant gratification that consumers are now demanding and are used to, it is vital.
It’s all about SAD
The best omnichannel retailers meet the consumers’ expectations of Speed, Availability and Delivery. In 2018, Forrester highlighted that companies with well-defined omnichannel customer experience management programmes achieve a 91% higher year on year increase in customer retention rate on average, compared to those without one. Additionally, they also averaged a 3.4% increase in customer lifetime value, against a drop of 0.7% year on year decrease against those without omnichannel programmes. They also pointed out that many consumers ordering for in-store collection avoided shipping costs, so an integrated strategy provides consumers with choices that could ultimately reduce shipping costs for retailers.
There is, however, so much more than just cost and convenience for a retailer who embraces omnichannel. One of its key differentiators is the ability to drive higher engagement with customers, using solutions that can manage their information, engagement and location intelligence, to deliver personalised and consistent experiences across channels.
Delivering increased profit
With the rise of big data and AI comes the opportunities for increased profit. When customers spend, a significant amount of useful data is generated including the quantity purchased, age, gender, marital status and location for example. This helps businesses understand purchasing behaviour, allowing them to reach out to customers with appropriate “special offers” generating consumer stickiness which in turn, leads to greater profitability.
To compete and thrive, rather than just survive, in the retail industry now, it’s imperative to successfully implement an effective, appropriate and reliable omnichannel strategy and follow it, whether you are a large company, an SME or something between. We know that all customers are unique, but we also know that an omnichannel approach is the way forward and those who choose to ignore will find it hard to survive in such a competitive space.