It has been found in studies that Millennials and later generations check their mobile phones more than 150 times a day and more than half of that time is spent on non-voice activity.Therefore it can be confidently stated that a significant part of their daily lives are influenced by technology. And thus many retail businesses are looking at how to leverage the power of mobile technology to boost their customer base and revenues.
While the general belief among retailers about going online is to list themselves on retail aggregators like Amazon and eBay, or bring-in sales via social networking marketplaces such as Facebook. Big brands such as Decathlon are enjoying improved customer satisfaction and loyalty by delivering a seamless shopping experience by integrating their online and offline sales process.
But, not all retailers can benefit from a mobile app. Retailers that enjoy more frequent purchases and customer interactions are best placed to leverage the full potential of mobile apps. For example, a luxury jeweller is likely to have less of a need for a mobile app, because their customers make purchases infrequently, and when they do, they probably prefer to come in store. But a retail brand like Target that has many customers who make purchases or interact with the brand several times a week or month, can get the most out of a mobile strategy.
What is Omnichannel Retail?
In general terms, Omnichannel retail is a modern approach of retailing that largely focuses on providing a cohesive buying experience at every customer touchpoint. It is an innovative method of integrated marketing where the retailer focuses on utilising both physical and digital marketing channels to provide customers with a seamless buying experience.
Omnichannel retailing is a modern approach and encompasses optimisation and integration of all the available retail marketing channels. It differs from multichannel marketing where the retailers used to have different strategies for every marketing channel.
The Customer buying decision funnel is more Omnichannel than ever
Despite the hype of online shopping in the past few years, recent reports from the US state that 87 percent of all consumer spending still occurs offline. On paper, offline commerce may still dominate, but digital commerce plays a significant role in the purchase decision making process. When asked about their shopping behaviour prior to the offline purchase, 32 percent of the digital consumers searched for the brand on Amazon, 39 percent visited the brand’s website, 36 percent visited the brand website and 33 percent compared the online and offline prices.
Then, how do the retailers reach these hyper-connected customers? Specifically, in a highly competitive market.
The approach is simple. The retailers can adopt an omnichannel sales strategy to provide their customers with a seamless shopping experience. Regardless of where the final purchase happens, retail brands must have a strategy which includes all of the relevant physical and digital channels involved in the shopping experience. Now, retailers need to figure out how their online presence – including their website and social media presence – influence their customers. This applies even to those customers who buy on marketplaces like Amazon.
Brands have to focus on integrating their overall online presence to influence where and what the customers choose to purchase. Every customer interaction is the opportunity to improve brand awareness. By making the product/service available on all marketing channels, brands make their product/service discoverability easy, which will ultimately result in customers being more likely to buy the product.
Online Marketplaces are complementary channels to Retailers
Amazon’s dominance in the retail landscape is evident with 49 percent of the online spend in the US occurring on Amazon. In fact, in 2018, almost 83 percent of the US consumers have made a purchase on Amazon. When you are specifically looking at the digital-first Millennial generation within the US, the percentage hikes to 90 percent. It proves that Amazon has become an integral part of nearly every customer’s shopping journey.
Convenience is the number 1 reason why consumers buy from Amazon.
Despite capturing a huge market share, the growth of this giant online marketplace doesn’t significantly hamper the retailers; In fact, it brings a pool of opportunities. Merchants who consider Amazon and other marketplaces as another sales channel are thriving. According to Amazon’s Small business impact Report, third-party sellers accounted for more than half of the units sold from June 2019 to May 2020.
You might not know but consumers consider Amazon as a destination to find new products for their needs. In fact, 30 percent of the customers agree that they first saw the brand on Amazon before they bought the product from the brand’s website. Many brands remiss this obvious connection between these two sales channels. And in turn, they fail to survive in the cutthroat competitive environment.
Communicating value alters price Obstacles
17 percent of the respondents from a survey confessed that most of their online shopping returns stem from the product that didn’t match the original product description. This is where the brand’s ability to articulate value comes into play. Brands need to provide clear product descriptions, videos, images, demonstrations, size guidelines to make sure that their customers have a clear idea of what they are buying.
Unlike the third-party online marketplaces like Amazon, where products get hidden in the competitiveness, retail brands can clearly convey their marketing communication on their own website. It gives them the ability to use the best product descriptions, imagery, reviews, videos, demonstrations, and provide endless possibilities to articulate their product value.
A customer that sees product values clearly outlined is more likely to find the price justified, even when the price is not the lowest on the market.
Convenience trumps Data Privacy Concerns
With the advancements made in the tech space, retailers have gained the ability to measure and analyse customer data. Data, which is currently the currency du jour of the digital economy has proved it’s worth in the retail industry. But in recent times, there continues to be a relative lack of confidence amongst customers about retailers attempting to measure and monitor their shopping behaviour online.
If given with an option, 70 percent of the customers will opt-out of sharing their personal data with retailers, even if it meant that they no longer receive personalised promotional offers. However, the customer’s willingness to share their data varies with generations. Regardless of the incentives, 54 percent of Seniors (aged 75+) and 46 percent of Baby Boomers (aged 56-74) aren’t willing to share their personal information with retailers.
However, Gen X, Millennials, and Gen Z, aged 40-55, 24-39, and 20-23 simultaneously, have a more collaborative view towards data sharing. They are more likely to share their personal information with retailers in return to tailored discounts and free deliveries.
Capitalizing on the In-Store Advantage
The recent closures of giant retailers have gained concerns for many brick-and-mortar stores. However the discussion of the pending “retail apocalypse” is omnipresent in every area of modern commerce. It is said that the ability to try shopping items in-store is three times more influential than other in-store perks.
Merchants, having the presence both online and offline have an opportunity to boost their sales. Here is the statistics that makes it clear how a brick and mortar store complements the online presence. When returning items purchased online, half of the customers mail them back to the seller. But out of the customers who visit brick-and-mortar stores to return the items that were purchased online, 67 percent of them browse or shop in the store after returning the item. This is the advantage of omnichannel businesses which online-only stores do not have.
How to build an Omnichannel Retail Strategy?
Whilst we’ve discussed in detail why having both an online and offline presence is crucial for merchants, it’s time to enlighten you on how you can go omnichannel. It is true that going omnichannel will require a significant level of attention and resources. But it isn’t always as complicated and grandiose as you might see it.
You can reap the most out of your omnichannel migration if you have the right strategy in place. The perfect omnichannel retail strategy will have the integration amongst the following three areas of retail:
- Sales Channels
- Order fulfilment and delivery
Let’s know each of them in detail:
A retail business can have multiple sales channels including brick-and-mortar stores at various geolocations, a website, and a mobile app. The omnichannel retail solutions integrate all of them to:
- Build your presence in every online and offline channel which is relevant to your target audience.
- Integrate the shopping cart and order status to maintain consistency across every sales channel.
In simpler terms, omnichannel solutions provide customers with a unified view of the business. Allowing customers to browse and add items on the cart via one channel and purchasing the item via a different channel of their choice will make their purchase seamless.
However, going omnichannel doesn’t mean your business has to be presented everywhere. It actually means that you are wherever your target audience is. If your buyers are on a specific social media platform, you go there. If they need a shopping mobile app, you build one for them. Thus, it is up to you to identify the most suitable channels to reach your target market.
2. Order Fulfilment and Delivery
A successful omnichannel strategy will allow you to provide your customers with a seamless shopping experience. But, being present everywhere in terms of only purchase isn’t just enough, you will also need to be omnipresent for order fulfilment and delivery.
Providing the following order fulfilment and delivery options will be effective for your omnichannel strategy:
- Standard as well as fast shipping options.
- Delivering via local lockers or pickup points.
- Allowing users to save multiple delivery addresses to their account.
- Delivery service at the nearest brick-and-mortar store.
- Cross-channel order fulfilment.
In layman terms, your omnichannel strategy should provide users with options to personalise their order delivery. They should be able to place orders from any sales channel and either get the product delivered or they should be able to just order online and pick up the product from the nearest brick-and-mortar store.
Talking about order fulfilment, the seamless integration between all the channels will always provide customers with the exact SKU (stock keeping units), irrespective of the channel that they browse products in.
Order return is the final piece in your omnichannel retail strategy puzzle. An omnichannel retail order return process means going beyond the traditional returns model, where buyers raise an issue and request for return, you approve and send a label, and then the item is returned via your assigned delivery service.
Therefore you will have to think about having more than one way to facilitate returns:
- Standard delivery services for return
- Return at postal address
- In-store return
- Local drop-off points
The idea behind an easy return process is to allow customers to use any of the return options, regardless of the mode of purchase.
On top of this, there is another option which is popular, which is ‘try before you buy’. It is more commonly popular in the fashion and accessories sector. The fashion brand ASOS realised that their sales figures hiked by 23 percent (300k euro) in four months after introducing this feature.
With mobile being one of the prime touchpoints in the customer acquisition process, customers are more likely to be already accustomed to an omnichannel experience. Integrating the online and offline channels create a seamless buying experience that eases your path to sales growth and customer loyalty.
A successful omnichannel retail strategy will allow users to:
- Browse anywhere
- Buy anywhere
- Deliver anywhere
- Return anywhere
But, even the big brands cannot get this in place overnight. Similar to every other digital transformation strategy, implementing omnichannel retail solutions shall be done in multiple phases.
If you are thinking of implementing your Omnichannel retail strategy, comment below the challenges you are facing. We can help you overcome those challenges.