What is omnichannel retailing?
Omnichannel retailing refers to the use of various sales channels (physical and digital storefronts) to create a unified, seamless brand experience for consumers on any platform, at any time. When done effectively, users should be able to move freely from one channel to the next, building a relationship that improves the overall buying experience and encourages brand loyalty.
Most businesses today use multiple platforms and channels for sales. Brands are spread across websites, social media, print catalogs, and brick and mortar stores. Since sales on various channels can essentially act independently of one another, if they aren’t set up properly they can create a disjointed or inconsistent experience for the consumer.
Successful omnichannel retailers have figured out how to let customers use any of their channels at any point of the process, for the first time or the 15th, and have a consistent, seamless experience. For example, an effective omnichannel retailer makes it simple for a consumer to see and like something on social media, and then with just a few clicks, immediately be able to order from a website. If a customer wants an item that isn’t in stock locally, it should be easy to order online and have it shipped directly or to a store for pickup (a concept known as buy online pickup in store, or BOPIS).
The coronavirus pandemic has accelerated interest in BOPIS, along with all e-commerce shopping activity. McKinsey reports that most consumer categories have seen a 15 to 40% increase in online channel user growth, further fueling the need for effective omnichannel execution.
Not only are consumers demanding the ability to flow between in-person and online shopping experiences, but optimizing this process is just good for the bottom line. When the Harvard Business Review studied a retail store chain in 2016, they found that 73% of customers use multiple channels when shopping. Further – the more channels customers used, the more money they typically spent, and the more repeat purchases they made. Perhaps most importantly, multiple interactions tend to result in more recommendations made to friends and family.
An example of omnichannel retail in action
Starbucks’ loyalty program is a great example of a successful omnichannel experience. With a typical loyalty program, you may be asked by an associate to sign up in exchange for a free item, and then additional offers are presented as you reach a certain marker or dollar amount in purchases. With Starbucks, the program is tied to every part of the retail experience — from app to in-store purchases.
The process starts by requiring customers to give their email address in exchange for WiFi access at their stores. From there, marketing focuses on encouraging these “digitally registered” customers to join the Starbucks Rewards program. Ads focus on deals for specific times in the week and on high-margin sales. The process has boosted sales during traditionally slower times of the day and increasing spend per visit.
Joining the (free!) program gives the company more data on spending habits, so they can increase their value to customers by creating tailored offers. To encourage app use, customers can add money to their account in several ways, including in-store, on the website, and even directly in the app. That way, customers are invested in — and always prepared to pay for — their next purchase. Each step of the process is aimed at removing barriers that previously kept occasional customers from becoming regulars.
Major omnichannel retail trends for 2021
How are businesses using this merge of sales channels to improve profits and the customer experience? Here are the five biggest omnichannel trends you can expect to see this year.
1. Accelerated digital transformations
The coronavirus pandemic made digital transformation a top priority across industries, including retail. Businesses have identified and invested in tools and systems to respond to sky-rising e-commerce activity with new products, services, and shopping experiences. Digital companions to physical products, curbside pickup, and third-party services like Instacart are likely here to stay. And in 2021, businesses will look to improve these offerings and use them to grow.
2. Shoppable social media
Social media accounts and influencers can get your products in front of consumers in historic ways. But if you want to turn this engagement from just interest into actual sales, you need to make it simple to get from the post to a completed order. With shoppable media, customers can click through a post to your website or even place an order without leaving the app, like Facebook Shops. Adding an incentive (like a discount code or offer for free shipping) further encourages customers to act.
Pura Vida Bracelets leverages social media by creating content for sites like Instagram and TikTok. Using high quality photos and beautiful videos, they’re able to grab the attention of potential customers scrolling along their feeds. Once interest is piqued, sales are much more likely to occur. The company encourages customers to sign up with a media campaign that features fun contests and other promotions, so users are enticed to continue checking posts and engaging with the brand.
3. Merging online and offline experiences in stores
Both digital and brick-and-mortar experiences have unique advantages. Shopping online lets customers research options, read reviews, and make comparisons on their own timeline. Shopping in stores lets customers see and feel goods before buying, and they can bring home their purchases immediately. Businesses that successfully bridge the two are able to improve customer retention and sales completion.
Emerging technologies like virtual reality (VR) and augmented reality (AR) are helping to fill the gaps between online and in-person shopping by providing a range of augmented experiences. For example, Zennia optical allows customers to “try on” glasses virtually, and with the IKEA Place app customers can place true-to-scale 3D models of furniture and accessories in their own rooms. Supermarkets are creating 360º immersive experiences that allow customers to shop by browsing shelves. And while these new digital shopping options are exciting, marketers must remember that they need to be consistent with and connect to other sales channels, so they are truly part of a seamless brand experience.
4. Driving traffic into stores with “on-the-go” promotions via mobile devices
Mobile devices are already a major part of the in-store shopping experience. Customers research items before making purchases, comparison shop in the store, and use apps to manage coupons and reap the benefits of rewards programs. Studies show that digital interactions influence 56 cents of every dollar spent in brick-and-mortar stores. By leveraging browsing history and location data, brands can personalize marketing, which has proven to be hugely effective.
Cosmetics retailer Sephora recently adapted their app to cater to this style of shopping. Now users can check reviews and information in the store, see what’s in stock, and even virtually try on products. By tracking how shoppers handle their purchases, Sephora is able to adjust promotions accordingly. They realized their customers consistently shop for products online before visiting stores, so they began heavily promoting in-store sales on their mobile website. This simple tactic has resulted in a conversion rate that’s three times higher than regular digital ads.
5. Evolution of the curated, personalized shopping experience
Although consumers have more choices than ever before, the sheer volume of options can make it difficult to make purchasing decisions. Increasingly, retailers will need to find more personal ways to connect customers to the products they actually want. Options to customize a product search can present options in a way that potentially matches needs and desires more effectively than a site standard search.
Limiting results using a regular search engine requires the use of Boolean commands (AND, OR, NOT) or filling out several search options. A self-guiding questionnaire is an easier, more natural way to focus item results. By answering questions about budget, likes, dislikes, and product requirements, the search assistant can return more accurate results for users. JustFab even uses photos of celebrities who customers want to emulate, which helps their system create a list of shoes that match that style.
By having celebrities, social media influencers, and regular users create their own collections, customers can search for items based on what others who have similar tastes recommend. Both Etsy and eBay use this method, letting customers follow other users and stores to discover new items. The future is certain to provide more opportunities for customization, as the use of artificial intelligence (AI) will likely continue predicting what users want based on search history and behavior.
How can you pivot to an omnichannel strategy?
What is omnichannel retail? For consumers, it means a seamless shopping experience, as the ability to move between sales channels becomes easier and more consistent. For brands, it means a potentially daunting overhaul of your retail channels and assets to form a fluid, cohesive unit.
Widen can make this process easier. Our combined digital asset management (DAM) and product information management (PIM) system lets you create a single source for product photos, advertising creative, marketing copy, and other content so you can represent your brand consistently across all marketing initiatives, on all channels.
Note: This article was originally published in July 2020 and has been updated to highlight new trends in 2021.