Think of this: if you’re a pure-digital store owner trying to figure out how you can expand your business to both brick & mortar stores and as well as other online marketplaces, or if you’re a pure-offline retailer looking to take your business online, you’ve probably wondered how you can manage your stores with consistency. That’s where omnichannels come in.
The term “omnichannel” in retail has been making appearances in the retail world with increasing frequency over the past few years. With all the technical ways that the term is being defined, all it really means can be summarized in one idea: having a “customer-centric” attitude.
Since omnichannels are backend systems that act as a connector, centralizing the entire sales journey into one platform, it’s tempting to describe them as a tool and not as a strategy. But the diverse range of features integrated in an omnichannel is a means, not an end.
This means that retailers who understand that customers want a consistent experience across all their sales channels immediately recognize the value of an omnichannel – by connecting warehouses, locations, physical & online stores, last mile fulfillment, customer support, and post-sales engagement altogether in one place, retailers are acknowledging that the omnichannel strategy is the only way to provide the best experience for their customers.
If you’re looking for reasons to get started with an omnichannel this 2022, let’s dive into how it can help you differentiate your brand from others.
1. Streamlining Your Operations
At least 1 in 3 consumers choose brands with omnichannel services such as buying online & picking up in-store as part of their shopping routine, and Gen-Z consumers are entering into the retail ecosystem used to the idea that brands should deliver a consistently great shopping experience regardless of the sales channel.
With a multi-channel approach, retailers used to increase the number of places where they can reach and sell to their customers, but that doesn’t mean that the channels are connected with each other. Each channel is managed separately – from inventory, to orders, up until fulfillment and customer service. So, while it may increase your sales opportunities, multi-channel strategies are tough to sustain efficiently because of the extra resources needed to maintain them.
Omnichannels, on the other hand, integrate all your stores (whether physical or online) into one platform, allowing you to manage them all in one place. If a customer inquired about a product through an online marketplace, but decided to buy it in-store, you wouldn’t need separate teams to handle the request – since everything is centralized, you can seamlessly switch from one channel to another with ease.
As a result, by being able to manage every part of the supply chain in one place, you would be able to cut down on repetitive manual labor, and reduce operational expenses.
2. Generating Offline Foot Traffic through Online and Vice-Versa
An important reason why customers shop at physical stores is so that they can see and feel the product in real-time. They can look around, trying a variety of products before a decision is made.
Around 1 in 4 customers have reported that between 5-15% of the items they’ve bought online have resulted in returns. This indicates a huge opportunity for retailers – by tapping into the relationship between physical stores and online shops, retailers can redirect customers through one channel and bounce them to another, all while limiting expenses such as higher shipping costs due to returns.
An example of redirection would be by using social media to announce offers to the online market that can be redeemed in-store. This way, customers who prefer to shop in the digital space can take notice of your brand and follow your pages, but also decide to visit your brick and mortar stores thanks to online content. The same holds true for physical retailers who start becoming active online because they’re given brand content, promos, and rewards that are exclusive on social media pages or online marketplaces.
3. Being Flexible and Quick to Adapt to Change
Customer preferences have been changing, and there are pitfalls to both being stuck in one sales channel, and having multiple channels but no integration.
A brand selling exclusively on one sales channel forgoes the opportunity to tap into massive markets outside their space. Considering, for example, that Shopee & Lazada have over 100 million visitors a month worldwide, selling exclusively in one of the online marketplace giants will result in a huge missed opportunity.
Multi-channel approaches, however, will be able to tap into different kinds of markets, but struggle to maintain both a consistent shopping experience and solid customer service all throughout. This is because multi-channel strategies create different structures and protocols for service with per channel, often leading to miscommunication and a lack of brand consistency.
Taking both of these into account, omnichannels are able tackle problems such as visibility, inconsistent customer service, and lack of shopping personalization all at once. Not only are communication platforms uniform and centralized, omnichannels are also able to take advantage of customer data from each sales channel, allowing retailers to understand and segregate how they should approach the shopping experience based on how customers interact with each of their channels.
4. Maximizing Efficiency through Cutting Costs & Effort
Among the many things that retailers new to the term omnichannel is that it is associated with high expenses and difficult implementation. While changing and migrating current processes will generally require a significant amount of time and work, the interesting bit about omnichannels is that they’re easy to incorporate, and that using them results in cost savings & drives customer loyalty.
Through a combination of consistently individualized shopping experiences and on-the-dot customer service, omnichannels can drive a customer retention of 89%. Furthermore, purchase frequency is 250% higher with retailers adopting an omnichannel strategy as opposed to single channel. Between the sustained revenue from high customer retention rates and purchasing frequencies, omnichannels also eliminate missed SLA fees through smart real-time order fulfillment & prevents any instance of overstocking/understocking.
Finally, by reducing the time and effort required to manage a business, omnichannels help retailers redirect their efforts more into brand strategy & marketing – since there would no longer be a need for dedicated teams to manage each channel, brands can focus on opening sales opportunities and attracting new customers.
With all of these things considered, it’s important to note that omnichannels are also in the process of evolving. Just as customers are being shaped by their environment, the technology that goes into omnichannel retail is just a reflection of the needs and wants of the customers. And, with the amount of behavioral shifts that consumers are exhibiting today, it would be safe to say that omnichannels are now an absolute necessity for retailers who hope to keep up in the retail landscape.
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