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For retailers, omnichannel is no longer a choice – it’s essential. Those who fail to upgrade their systems risk being left behind.
Most business owners now realise that omnichannel is the way of the future. However, implementation has proved to be more difficult than anticipated, leading many to defer the process or abandon it altogether. Those who are actively working towards it are faced with the inevitable costs and time issues in updating and maintaining existing systems or attempting to build new systems from the ground up.
According to the latest 2018-2019 Omnichannel Leadership Report by Newstore, over the last three years, retailers have made significant progress in many areas towards the omnichannel experience. However, a clear understanding of what omnichannel is has hindered progress and led many retailers to stop short of a full system overhaul; many merely implementing upgrades to parts of their systems.
Retailers are still trying to understand what the omnichannel experience is, how it differs from multichannel and how it relates to their business. The confusion between omnichannel and multi-channel results in many using the terms interchangeably. Retailers often mistakenly believe they are implementing omnichannel by upgrading elements of their systems in a piecemeal process such as introducing cashless mobile point of sale (POS) to replace cash registers or providing associates with mobile devices for information on inventory, product or for customer data gathering.
While it appears, at first glance, that the aim of each approach is to interact with the consumer through a variety of channels, the two are distinctly different and each requires a business to follow a distinctly different path to implementation.
So, What Is Omnichannel & How Does It Differ From Multichannel?
While they may sound similar in name, multichannel and omnichannel differ in execution. Omnichannel is an approach that aims to provide the shopper with a fully-integrated, seamless experience, whether shopping online from a desktop, mobile device, mobile, or bricks-and-mortar store.
Multichannel refers to a brand’s efforts to utilise as many channels as possible to get the most customer engagement. Commonly companies will use two or more channels – most opt for email and social media, with the aim of expanding brand reach as much as possible.
Omnichannel puts the focus on building a closer relationship between the customer and the brand; the channels are interrelated in a way that provides a seamless customer experience. The report suggests that brands who focus on customer experience strategies achieve a 91% average higher YoY increase in customer retention rate compared to organisations without omnichannel and companies who have a strong omnichannel strategy retain 89% of their customers.
Providing the customer with a consistent experience and messaging across every channel reinforces the message of the brand and increases the customer familiarity and relationship. It requires that all departments within the organisation understand and are in-line with the aims of the messaging.
Omnichannel aims to make the buying experience as easy and free-flowing as possible – eliminating anything that could act as a barrier or bottleneck.
That’s not to say that companies who have up to now focused their energies on multichannel have engaged in a wasted exercise.
Multichannel and omnichannel can work together. Where multichannel puts the decision of what channels to use in the customer’s hands, omnichannel ensures that when the customer does engage that it will be a seamless experience. In addition, while the focus of multichannel is to expand reach to as many customers as possible, omnichannel ensures that that the experience is consistent at every touch point.
In the beauty industry many purchases are habitual and yet, even for these purchases research has shown that there is a double-check moment before finally clicking and completing the purchase. Each time a consumer is required to double-check introduces a risk to brand loyalty as the consumer wonders if there could be a better choice that they may be missing.
Brands need to re-assess their investment in at-shelf and key digital touchpoints prior to store. A report by SKIM, decision behavior experts, shows that more than 70% of consumers engaged with digital touchpoints somewhere along the buying journey and about half the respondents said they began their purchasing journey digitally while one-third of those who bought offline made their decision through online channels.
Consumers are often going directly to websites, especially Amazon, bypassing online searches, for information when making purchasing decisions.
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Yet, many brands are slow to make their inventory visible online to consumers and thereby missing sales. The Newstore Omnichannel leadership report suggests that even though 80% of shoppers research online before purchasing in-store, only 36% of brands have enabled in-store inventory visibility for shoppers online or through an mobile app.
Anything that removes friction from the purchasing process is welcome news for retailers. At the checkout, more retailers are offering mobile payments instore (57% accept Apple pay). However, surprisingly, the report also found that many stores still depend on associates using their own mobile phones to communicate with customers; with a potential loss of valuable customer data should that employee leave. Poor multi-channel marketing often results in shoppers abandoning their shopping basket at the checkout.
There is still some way to go when it comes to implementing endless aisle. A key worrying statistic in the report suggests that 61% of store associates don’t have access to product inventory at another store location. Many retailers are also missing out on sales by neglecting to display related products (68% suggest related products) or product pairings (59%).
Regardless of what retailers believe omnichannel to be and what form they think it should take, the drivers behind change will ultimately be the expectations of the modern consumer who wants a seamless shopping experience whether it be from a mobile device, desktop, telephone or bricks-and-mortar store.
Omni channel promotes strong and lasting relationships between the brand and the customer, which leads to increased sales, more up-sales and returning customers.