Omnichannel Retail Strategy: The What, Why, and How Simplified For Your Business

The retail industry is highly competitive. Each business competes with many other local and regional retailers and large chain stores to acquire customers. The fight for survival in this competitive industry is evident. To stay ahead of the competition and convert shoppers into customers and long-term, loyal customers, retailers are utilising smart marketing strategies and delivering personalised, seamless experiences. That’s where omnichannel retailing comes in. 

You may have heard the term ‘omnichannel retail strategy’ but not know exactly what it means. The Google Trends analysis below shows its increasing popularity over the past decade.    

Providing a seamless omnichannel experience offers immense value to customers and businesses alike. So, many big retailers such as Amazon, Nike, and Target are expanding their omnichannel capabilities. They're leveraging the latest technologies to provide a successful omnichannel retail experience. 

So, what is omnichannel retailing exactly? Want to know more about omnichannel retailing and how it will benefit your business and your customers? This detailed guide will explain the what, why, and how of an omnichannel retail strategy and help you understand how a real omnichannel retail business works. 

Defining omnichannel retail

The term omnichannel refers to the practice of engaging with an audience using multiple media channels and ensuring consistency across all channels. Frost & Sullivan defines omnichannel as seamless, effortless, high-quality experiences that occur within and between contact channels. 

In ecommerce, omnichannel refers to a multichannel approach to sales that focuses on providing customers with seamless experiences whether they’re shopping online, in a brick-and-mortar store, from a mobile device, or a laptop. In simple words, it means engaging with customers wherever they are and providing them with the same functionality and experiences across channels. It includes brick-and-mortar stores, brand websites, online marketplaces, mobile messages, chats and push notifications, emails, social media, mobile apps, and over the phone. It’s also known as cross-channel strategy, where the data is shared among different channels, and customers can seamlessly switch between them.  

For example, imagine a brand selling a collection of leather products on its website, mobile app, Instagram shopping, Amazon, and brick-and-mortar store. Think of these selling channels as different roads leading to the same destination - making a purchase. Whichever medium the customers choose, they will see the same products, pricing, and promotions across channels, providing them with a fully-integrated shopping experience.    

An effective omnichannel retail strategy connects the dots across your digital and physical presence. No matter whether your business is online, in a brick-and-mortar store, or both, you need to deliver a cohesive and consistent brand experience across all sales and marketing channels to stay relevant.   

Why create an omnichannel retail strategy for your business

The present-day customers are not only tech-savvy but are also multichannel users who use different platforms to make a purchase. They prefer omnichannel experiences because it opens numerous opportunities for online shopping. 

Harvard Business Review conducted a study to understand the shopping behaviour of 46,000 customers. Customers were asked about their shopping journeys, such as which channels they used and why and their shopping experience. The study found that 7 per cent were online-only shoppers, 20 per cent were store-only shoppers, and the rest 73 per cent used different channels/platforms during their shopping journey.   

Another study conducted by commbox found that more than 90 per cent of shoppers use multiple channels to engage with a business when making a single purchase decision. 

The above findings show the popularity of omnichannel strategies and their importance for your business. 

Benefits of omnichannel retail strategies for your business

Adopting an omnichannel approach in your sales, marketing, and customer service strategies has multiple benefits. Here, we’ve discussed some incredible benefits that online businesses can enjoy after adopting the omnichannel approach.

Gain competitive advantage

In order to thrive in the competitive retail industry, it's essential for businesses to build omnichannel strategies that look beyond simply having a store-only or online presence. According to a study conducted by the GE Capital Retail Bank, 81 per cent of customers browse the product online before heading out to the physical store to get the feel of the product or purchase it. Another study found that 73 per cent of customers prefer shopping through multiple channels. So businesses need to be present on platforms/channels where your potential customers are because it gives you a competitive advantage. With an omnichannel retail strategy, your customers will no longer have to search for you because your products will be just a click away. 

Boosts customer satisfaction and higher customer retention rate  

Customer satisfaction and retention go hand in hand when improving the customer experience. By focusing on customer satisfaction, businesses can drive more sales and better retention rates. It makes customers happy and helps develop loyalty, which equates to better sales. Omnichannel retailing helps create positive customer experiences by providing a convenient and consistent user experience across all channels. It enables the customers to purchase the product easily regardless of their device or platform, and the availability of several methods to contact the customer service and sales team makes it even more convenient. 

A study conducted by Forrester Research on customer experience and customer loyalty found that customers who had a positive experience were more likely to return for another purchase and recommend the business to a friend and less likely to switch to a competitor. So, creating an omnichannel experience for your customers is critical for your business’ success. 

Increases profits, sales, and engagement

Building an omnichannel retail strategy requires much time and effort, but it will certainly be worth it. Harvard Business Review’s research suggests that for every additional channel customers use, they spend more money. Specifically, omnichannel customers spend 10 per cent more online and 4 per cent more in-store than single-channel users. An omnichannel approach is an effective way to improve customer experiences. It encourages customers to engage with a brand across multiple channels. The more they engage with a brand, the more likely they'll make a purchase and add value. It can improve sales, boost engagement, and eventually increase profit. Furthermore, this cross-channel approach makes it easier for your customers to find your products and make a purchase.   

Improves operational efficiency and reduces costs

Implementing an omnichannel retail strategy may help improve operational efficiency and reduce costs. It eliminates the need to establish and implement different strategies for every channel, which saves ample time, effort, and money and improves overall efficiency. Furthermore, businesses don’t have to gather data every now and then, significantly minimising data collection and processing costs. According to Deloitte’s Omnichannel Retail report, online business owners are rethinking their strategies and redefining their business models to provide customers with a seamless customer experience and efficiently manage internal processes. Adopting an omnichannel retail approach may help increase sales and profits and deliver a more interactive, personalised brand experience. 

Better data collection

Going omnichannel not only enhances customer experience but also helps with data collection. It allows you to collect data from different channels and feed it to the customer. This enables you to provide a better and more personalised customer experience. You can also track customer engagements across various channels, which helps you understand the customer journey, how, when, and where customers prefer to engage, and which marketing campaigns have created the most value. You can put this data back into your strategy to create content and build more targeted marketing campaigns that will encourage your customers to shop more online and in physical stores. 

Less stagnant inventory

Stagnant or unsold inventory is one of the biggest problems for many suppliers. Efficient inventory management is key to preventing such mishaps. Without proper planning and management, it can be punishing to cash flow. Adopting an omnichannel approach allows you to share stock data across multiple sales channels. This enables shoppers to browse online inventory and purchase the products in-store or online. For instance, Kmart’s online store gives shoppers easy access to the everyday items they need. You can easily find the products you need online and purchase them. Furthermore, you have an option to shop online and collect the products in the nearest store or get them delivered to your doorstep. Implementing an omnichannel strategy will help minimise the risk of static or unsold inventory that takes up your valuable space and eats your available cash.

How to build an omnichannel retail strategy for your business

The importance of visibility, seamless operation, and access to product and customer information across channels has grown significantly as customers’ expectations continue to rise. According to the BRP consumer study, customers want access to a single cart to shop across channels and reach their shopping cart via phone, computer, or in-store. They want to start shopping anywhere and end their purchase journey anywhere. The study also found that 56 per cent of shoppers indicated that they were more likely to shop at a retailer that allowed them to have a shared cart across channels. Customers expect a frictionless shopping experience. And that’s what an omnichannel strategy exactly does.

An omnichannel retail strategy helps deliver a more consistent customer experience and seamless performance across all channels. It also helps control your purchase orders, stock counts, sales data, and order fulfilment information from a single platform, giving you the visibility to manage your backend and internal processes efficiently. With this in mind, we’ve shared some tips to help you build an omnichannel retail strategy for your business. 

Know your customers

The first step towards building an effective omnichannel retail strategy is understanding who your customers are. Don’t make assumptions about who your customers are, their shopping preferences, needs, and interests because they can lead you in the wrong direction. Data collection is the key. Gathering accurate data relating to your customers is essential to building and implementing an omnichannel retail strategy for your business and making appropriate business decisions. 

One way to know your customers is to leverage social media and social listening tools. Some of the best social listening tools are Sprout Social, Hootsuite, Buffer, and Mention. They help businesses to determine what messaging their target audiences are more likely to engage with and monitor and track conversations surrounding the brands, products, or services they offer. Additionally, social listening tools can help you better understand your audience and their needs, enabling you to build effective marketing strategies.

Dropshipzone expert tip: Determine what to listen for because there will be a wealth of data. You should know what your business wants to learn from the data because this can help filter large data sets. 

Select the right channels 

The next step in creating a seamless omnichannel strategy is to figure out where your customers are and which platforms and devices they use on a daily basis. An easy way to do this is by looking at the acquisition reports inside Google Analytics. The acquisition reports provide valuable information about where your traffic originates (search engines, social networks, or other platforms). It also gives information about how your target audiences are discovering your business (CPC, email, or organic) and what marketing tactics you use drives traffic (campaigns or SEO keywords). 

Another way to find your customer’s preferred channels is to look at their past purchase data and sales analytics. This data will reveal what channels or platforms your customers prefer to purchase a product and their purchase journey. You may also segment channels according to the highest and lowest usage for effective planning. If you find your customers don’t use a particular channel or platform, there’s no point in wasting your time and budget on it.  

Map your customer journey

Mapping the customer journey helps businesses identify customer pain points and determine bottlenecks, gaps, and drop-off points for each channel. To clearly map out customer journeys, you can ask questions such as when, where, and how the purchases are made, what products are purchased, and the frequency of purchases. With these insights, businesses can fully understand customer preferences and needs and deliver more optimised and personalised customer experiences at the right time. It’s important that all stages of the customer journey -  awareness, interest, consideration, purchase, retention, and advocacy, are accounted for, no matter what channel a customer uses to engage. A customer should complete every step of the purchase journey by using any combination of channels or platforms.  

Connect your online and physical store

Once you’ve selected the channels and mapped out the customer purchase journey, you should start thinking about how your physical store and online platforms will fit together to provide your customers with a unified customer experience. Any actions you take on one channel should be consistent across other online platforms and physical stores. For example, if you’re offering a 50 per cent discount on a particular product in your brick-and-mortar store, all your online platforms should reflect the same offer. Any inconsistencies could lead to mistrust from customers. Furthermore, ensure your other information, such as product descriptions and pricing, is the same across all channels. You can only create such a flawless and unified experience if you have relevant technology and tools. Using the right tools and technology, you can enable seamless channel integration and succeed with an omnichannel retail strategy.     

Create a unified look and feel

Being omnichannel means offering a unified, seamless experience across every channel. No matter what channel your customers prefer, the branding, messaging, visuals, content, fonts, and style should match to establish a consistent look and feel. 

Apple is among the brands that look and feel the same across channels. It offers a consistent visual experience across different channels, which makes its products and marketing instantly recognisable. Apple’s brick-and-mortar stores showcase how it feels to use their products, while the online platforms enable customers to easily research their products before purchasing them. 

Improve customer engagement across channels

Customers can't always be buying. In the meantime, you should stay connected to them and keep them engaged. The more time your customers spend on your site, the higher the conversion rates. You can improve and boost customer engagement across all channels by running promotions and contests, increasing referrals, interacting with customers on social media and other platforms, and creating customer-based content.    

Incorporate personalisation

Customers want personalisation because it makes them feel valued by a brand. This could mean displaying the products they’re interested in or bought earlier or showing related products. It helps deliver a better experience, enabling them to make the right purchases. 

Understanding customer behaviour and what makes them happy is the key to personalising their experience. Using the right technology and tools, you can easily track customer behaviour, see what products they look at and add to their cart, what products they purchase, and more. 

Omnichannel retail case studies and examples

Customers switch channels every now and then. They may begin a shopping session on your brand website and end it in-app or in-store. An omnichannel retail strategy provides a convenient shopping experience when your customers switch channels. Customers demand omnichannel shopping experiences because it makes the buying journey shorter, faster, more enjoyable, and more convenient. Businesses providing seamless, omnichannel experiences have been shown to grow faster and become more profitable than their competitors. So it’s crucial to implement an omnichannel retailing strategy for your business. 

In this section, let’s review some case studies to understand if the omnichannel retail strategy has benefited the brands. 

Coles Australia

The Covid-19 pandemic forced many consumer brands to shift attention towards online and ecommerce channels. To stay competitive, Coles Australia shifted its focus towards building a more personalised and seamless omnichannel brand experience that mitigates friction in the buyer journey for customers. The Coles Group's omnichannel retail strategy aimed to make its physical and online stores more integrated, enhance the overall shopping experience, manage customer data, and improve customer satisfaction. And as a step towards fulfilling this vision, this retail giant announced to pour $2.5 billion into its digital platform.

Since then, new technology and systems have been introduced to optimise both in-store and online customer experiences. Its Click & Collect services, Coles shopping app, single-click checkout, and other personalisation features aim at enhancing the omnichannel experience for customers. Furthermore, Coles offers its customers access to several shopping experience enhancements such as timely and relevant communication that's sent at the right time and in their preferred channel and personalised product recommendations and offers across the online website, mobile app, click & collect, and in-store. 

With all these improvements and the introduction of new technology and systems, Coles reported a 46 per cent increase in ecommerce sales growth, bringing total online sales penetration to 8.2 per cent over the first half of FY 2022. Coles Group also revealed that omnichannel customers spent 2.1 times more with Coles than those who shop only on one channel. Recognising this trend, Coles is continuously working towards enhancing its online shopping capabilities to deliver the best customer experience across channels. 

Amazon

Amazon Australia launched the Amazon Australia store in December 2017. Since its launch, the business has been continuously working to establish its retail business in Australia’s fiercely competitive online shopping environment. Amazon's business centres on selling products and delivering them to customers, which relies on warehousing and physical logistics operations. 

From being one of the first online retail platforms to one of the largest, Amazon has achieved massive success in terms of growth and sales. Its vision statement is to be ‘Earth’s most customer-centric company’. That also means reaching customers where they are, expanding their channels, and creating a unified omnichannel experience. The two principles for Amazon’s omnichannel success are customer experience and seamless integration of their channels in the backend. 

Amazon focuses on providing the best customer experience possible. They use data to create personalised and responsive interactions across all channels. Furthermore, they also focus on integrating their channels in the backend. It goes beyond inventory and central fulfilment and includes connecting customer data and fulfilling customers’ needs across all channels.

Connecting customer data across channels and devices is the biggest challenge. Amazon tackles this issue with Amazon Prime. It requires you to create an account and log in, no matter which channel or device you use. It helps in data unification, a crucial part of the omnichannel strategy. Amazon has incorporated additional benefits into Prime membership, such as a free Prime video subscription, various discount offers, a free Prime music subscription, and a Prime wardrobe to drive Prime membership. Another example of Amazon’s omnichannel strategy centres on Amazon Go. These brick-and-mortar outlets enable the shoppers to enter the store, pick up goods, and leave without interacting with store staff or cashiers. Automation is a notable thing about the Amazon Go stores. It’s all about convenience.      

By crafting a superior customer engagement and service process and using data with high levels of omni-personalisation (personalisation across all channels), this ecommerce giant has been able to keep its customers happy and satisfied.

How the future looks for omnichannel retail

The retail world is changing like never before. It isn’t easy to keep up with this fast-paced industry. The new generation is full of online shoppers, especially omnichannel shoppers, who have grown up speaking to Amazon’s Alexa and engaging on different platforms. Something as simple as grocery shopping has changed as it can be now delivered to the doorstep. Research conducted by Google found that 90 per cent of multiple device owners switch between devices every day, using three devices on average to complete a task. So, it’s imperative for businesses to integrate an omnichannel retail strategy to keep up with the changing world. 

By implementing an omnichannel retail strategy, a business can gain a competitive advantage and build a strong presence across all platforms. According to the research conducted by Omnisend, purchase frequency is 250 per cent higher on omnichannel than on a single channel. Another study conducted by Commbox found that 80 per cent of customers prefer omnichannel strategies due to the seamless communication experience. 

The future for omnichannel retail looks promising. Businesses that implement an omnichannel strategy will gain more customers and grow in the long run. And those businesses that remain unchanged will find themselves lost in a maze of disconnected silos, empty shelves, and unhappy and dissatisfied customers. 

Transitioning from single-channel or multichannel to online shopping and omnichannel requires a lot of time and effort. But it certainly will be worth it in the end. Take action now and start designing a suitable omnichannel retail strategy to future-proof your business.    

Summary

Whether or not you run a completely online or an offline retail store, implementing an omnichannel strategy can help your business grow faster than ever. It can improve your leads, boost sales, and build customer loyalty by providing customers with a rich and seamless shopping experience. 

With an omnichannel retail strategy, your business can deliver a more cohesive customer experience across all channels, meet customers where they are, create brand awareness, and offer personalised experiences. So, if you haven’t tried it already, you should adopt the omnichannel approach for your business to reap its benefits. 

Dropshipzone expert tip: Make testing a habit. It’ll provide valuable data and insights, which you can use to optimise your omnichannel marketing strategy.       

Creating an industry-leading omnichannel strategy for your online store can sometimes feel overwhelming. To help you craft a profit-boosting omnichannel strategy for your business, the expert team at Dropshipzone has created a questionnaire you can use. The following are the questions you should ask yourself about your business. 

• What is your business goal?

• What position does your business hold in the ecommerce market?

• Have you created a customer journey map?

• What makes you different from your competitors? 

• What do you think your business is lacking? 

• What are your business’ strengths and weaknesses?

• How often do you engage with your customers? 

• What do you think could work for your business?

• Where do you see opportunities in omnichannel for your business?

• What do you want to achieve through omnichannel?  

Looking to start an ecommerce business or need help running your online business? The Dropshipzone team is here to help. Visit our FAQ page to find answers to the most common questions. Alternatively, you can speak to our customer service team via email at info@dropshipzone.com.au or contact us to get your questions answered. 

FAQs

Is omnichannel and multichannel retail strategy the same? What’s the difference?

No. Omnichannel and multichannel retail strategies are different from each other. The main difference between the two is the focal point of the marketing strategy. An omnichannel retail strategy utilises all channels and is centred around the customers. It may include everything from operating a Shopify store, selling on social media, and even a brick and mortar store where customers can shop in store. On the other hand, multichannel retailing uses more than one channel and is centred around the product or service the business offers. A multichannel retail strategy doesn’t offer customers an integrated experience like the omnichannel approach. Data synchronisation across channels is also minimal or non-existent.    

How does omnichannel retailing work? 

Omnichannel retailing is a sales and marketing approach that provides customers with a fully integrated, seamless, and unified shopping experience. It’s also known as a cross-channel approach. Omnichannel retailing unites customer experiences across multiple channels and multiple devices, including physical stores, online websites, and mobile apps. It’s a strategy designed to meet customers where they are and deliver the right message to the right people at the right time. 

Why is omnichannel retailing important? 

Omnichannel retailing not only benefits your customers but also your business. It helps you build a longlasting relationship with your customers, which can ultimately grow your business. The following are some critical advantages of omnichannel retailing. 

Increase brand awareness 

Being present on multiple channels makes it easier for your customers to find you. It can help you build a strong brand presence and increase brand awareness. 

Better reach

Your customers are everywhere. When you are on multiple sales channels, you can attract more customers. It enables you to reach your customers no matter which channel they use. 

Higher retention rate

When you offer your customers a unified shopping experience across channels, they are more likely to purchase from your store again. According to Ominisend, customer retention rates are 90 per cent higher for omnichannel than a single channel. 

What does omnichannel retail feel like to customers?

Omnichannel retailing is about providing unified brand experiences to your customers. 

Take, for example, 

• You discover an interesting product via a Facebook ad or post. 

• When you visit YouTube, you see a different ad highlighting the product features and other aspects of the product. 

• After you follow the YouTube link to the website or product page, a tracking code tracks your activity and the products you engage with on the website. It creates a pop-up notification suggesting related or similar products. 

• Then, you decide to visit the physical store. As you enter the brick-and-mortar store, you receive a personalised notification with items you’ve previously engaged with on sale. 

Such brand experiences encourage people to make sales and also increase customer retention rates.