“Omnichannel retail”: it’s one of those terms that pop up often in conference rooms, marketing summits, and across the web, but what does it actually mean? One thing is certain: it’s much more than just a physical and digital presence for your business. What started as a digital expansion of physical stores is a complex strategy for a seamless shopping experience.

In this piece, we will dive into the true meaning of omnichannel, cutting through the noise and looking at what a strategic and meaningful omnichannel experience should involve. The result will be key practical insights your brand can apply to your customer journey optimization in the year ahead.

An evolving term

While omnichannel is a frequently used term, it is also confusing and often used without context and a lack of detail. If you were to search online for one perfect definition of omnichannel retailing, you’d come back with a dozen or more definitions from market leaders.

In part, this confusion and lack of clarity are due to the evolving nature of omnichannel retail. Unlike a brick-and-mortar experience, which has remained largely unchanged over the years, omnichannel is still in the early stages of development.

Early on, omnichannel retailing simply meant that a retailer had both a physical and digital presence. For example, a clothing store that sold clothes both in-person and online. However, as retail began to dig in and their true digital transformation began to boom over the years, it became painfully obvious that retail was structured to always favor the brick-and-mortar experience.

A practical example of a true omnichannel setup

A great example of this can be seen in the evolution of Walgreens’ journey from a siloed digital experience to a true omnichannel strategy. In 2008, Walgreens provided a subpar digital experience. The company focused solely on digital marketing and had a limited number of resources dedicated to its digital strategy.

Leading into 2010, Walgreens saw an opportunity to initiate a digital transformation. During the next year, Walgreens shifted investment dollars away from the brick-and-mortar experience and poured funding into an immersive digital experience. A critical component of this strategy involved combining business channel P&Ls to break down silos and ensure all teams headed toward the same goal — a unified customer experience.

In 2011, Walgreens took a bold move forward, creating a president-level position in digital, showcasing that it was serious about its transformation. In the years ahead, the company introduced a web pickup service for online orders and invested in an enterprise digital competency.

Walgreens has since continued to pave the way in omnichannel retailing, something they call a “connected health strategy.” While their digital transformation began pre-pandemic, COVID-19 accelerated their efforts even further, which included same-day delivery and curbside pick-up.

In addition, they have introduced live text chat with pharmacists via its mobile app, rolled out virtual doctor visits in multiple states, and launched mobile store mapping, which assists both shoppers and employees in finding products faster.

Today, omnichannel retailing means a cohesive user experience for customers at every touchpoint. No longer should omnichannel involve siloed marketing attempts that don’t consider the whole commerce experience.

Multichannel vs. omnichannel

Adding to the confusion of omnichannel retailing is the concept of multichannel retail. The difference between the two was described perfectly by Hubspot when the company stated:

“All omnichannel experiences will use multiple channels, but not all multi-channel experiences are omnichannel.”

Another way to look at it is that omnichannel retail puts the customer at the center of everything, whereas multichannel retail revolves around the product.

Historically, the issue has been that many companies have invested in multichannel experiences, defining their omnichannel strategy by the presence of a website, blog, Facebook page, and Twitter account. Incorrectly, the assumption has been that by having these multiple channels for interaction, they are taking part in omnichannel retailing.

And for a time, perhaps consumers partially bought it. But then D2C commerce became prevalent, and the online channel started to gain importance, setting consumer expectations. Iconic brands such as Warby Parker, Casper, and Allbirds created such a rich digital experience that traditional retail had to take notice.

These brands designed high-quality products and then disrupted the scene by bypassing traditional brick-and-mortar stores, focusing instead on an incredible online experience as rich as in-person shopping.

The pandemic’s forced omnichannel experiment

While there will always be brands, such as Warby and Dollar Shave Club, who are trendsetters in the omnichannel space, something interesting happened in 2020.

COVID-19 created a forced trial for omnichannel commerce. This trial pushed both retailers and consumers into a space they may not have otherwise occupied.

According to research by McKinsey, the pandemic has accelerated the digitization of customer interactions by several years. Globally, the adoption of digital channels was accelerated by an incredible three years in only months.

When your stores aren’t open, investing in digital channels suddenly becomes a no-brainer. When you are worried about contracting a deadly disease, suddenly trying out curbside pickup makes logical sense and doesn’t seem so overwhelming.

The result of 2020 was that retailers were left scrambling to assemble a new omnichannel experience.

The benefits of omnichannel retailing

Brand Perception and Loyalty

One of the key differentiators between multichannel and omnichannel retailing is the consistency of brand and experience. While having a website, a social media page and a brick-and-mortar store is nice, it doesn’t necessarily translate to a strong brand image.

Omnichannel retailing should provide your customers with the same experience and brand presence regardless of how and when they interact with you. Not only that, but any interaction should be seamless between channels.

Think of it like this: rather than technology driving your digital commerce experience, an optimized customer journey should naturally result in an omnichannel experience. This is not a forced adoption of digital tactics but rather the realization that some digital solutions will pair perfectly with your customers’ journey.

For example, Walgreens didn’t simply invest in technology for technology’s sake. Instead, the company looked at what its customers needed across its purchasing journey, and it built solutions to ensure a true omnichannel experience.

When Bobby is looking for allergy medication, he might also have questions about how that medication might interact with the prescription drugs he takes daily. Historically, this might require waiting in line in a brick-and-mortar store, hoping to speak to a pharmacist.

Walgreens saw that it could close the gap, creating a centralized hub within its mobile app. Now, Bobby can quickly live text chat with a pharmacist, find out which allergy medications are safe to take in conjunction with his prescription, and rapidly locate that exact allergy med at his corner Walgreens.

Technology should simply be the conduit rather than the driver.

Aligning to purchasing habits

Another benefit of a quality omnichannel retailing strategy is that you actually teach your customers that your experience aligns with how they purchase. The beauty of this is that, in many cases, customers don’t even know exactly what shopping experience they want, leaving you with the opportunity to influence them to follow your customer journey. A solid omnichannel experience provides consumers with a shopping experience they might not have imagined on their own.

A modern shopping experience is all about convenience. And that shows in the numbers, too. For example, did you know that the average order value with Buy Online, Pick Up In-Store (BOPIS), one of the most popular omnichannel retail tactics, can be up to 35% higher? The ROI of omnichannel retail offers benefits to both your business and your customers.

The strategy behind omnichannel retailing

The process is twofold for companies that are either entering the omnichannel retail world for the first time or realizing they need to rethink their existing strategy.

Part one is establishing clear goals and objectives. Defining these goals and objectives is necessary before any omnichannel initiative begins. Start with a critical self-assessment of your business and ask yourself these key questions:

  • Do you have the people in place you need to create a successful strategy?
  • Do you have the right processes in place to support the strategy?
  • And, do you have the right technology to leverage an omnichannel experience?

The nice part about omnichannel strategy and the road to a great omnichannel customer experience is that you can start small and add to it over time.

Part two of developing an omnichannel strategy involves company agility. In the world of digital, new channels constantly come and go. Integrating new channels to capture customer data, personalize the customer experience across channels, and then orchestrate the journey is the differentiator for brands offering omnichannel customer experiences that drive growth.

Trends in omnichannel retailing

The wonderful thing about omnichannel retailing is that it is very much still in its early stages of development. This means there is a great opportunity to think creatively and drive increased sales in wholly unique ways.

For instance, consumer concerns regarding data privacy have led to a rise in first-party data. This data is collected directly from a company’s audience, preventing data privacy issues while ensuring they provide a better digital experience for their customers.

Read more about first-party data »

Besides positioning brands to use new channels to acquire customers, omnichannel also better positions brands to deepen relationships with existing customers. For example, one omnichannel trend is to use a return from an online purchase in-store to convert to a larger sale. According to research by Deloitte, the rise of ecommerce over the past decade has driven a 33% increase in the return rate of overall retail sales.

The same study unearthed the following two equally interesting statistics:

  • 96% of consumers would shop again with a retailer based on a good returns experience
  • 55% of customers between ages 21 and 29 prefer in-store returns

What does this mean for omnichannel retailing? Well, it means there is a great opportunity to leverage every return as a chance to encourage a customer to either replace the item—or even purchase additional items—while they are in-store. The buy online/return in-store trend is a perfect example of how if omnichannel retailing is done well — it is a win for both the customer and the business.

From a technology standpoint, omnichannel retailing is to utilize headless commerce to improve flexibility and offer commerce options to customers anywhere they are located. Headless commerce decouples the front-end and back-end dependencies that ecommerce traditionally was constrained by. In this way, brands are provided with endless customization options, ensuring the optimal experience from mobile/desktop to in-store.

Vaimo leads the way in omnichannel strategy

For businesses looking to invest in a true omnichannel retailing strategy, Vaimo is here to help. For years, we have been assisting companies in creating a holistic view of their retail experience.

With the increased adoption of technology by both consumers and competitors, now is the time to think long and hard about where your business ranks. At Vaimo, we can begin with a deep dive into what your customers currently think about your omnichannel experience. After discovering an honest perception from your consumers, we can use this data to build a quality strategy forward.

Omnichannel retailing is about optimizing your customer journey so that technology is simply the natural solution. Want to have a chat with our experts? We’re happy to talk about the possibilities for your business, supporting your ideas with our knowledge gained from numerous successful projects.

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