Omnichannel Retail: Integrating Physical Stores with Digital Channels
The way consumers shop is changing drastically. Physical stores face competition from the convenience of online sales channels, while ecommerce merchants aim to provide a sense of tangible "experience” that their digital platform can’t quite capture.
To solve this dilemma and stay competitive, many retailers find themselves turning to an omnichannel approach — a strategy that links both physical store environments with digital technologies. This allows customers to have a unified shopping experience regardless of whether they are engaging in physical or virtual transactions, making it easier for them to find what they need and complete purchases quickly and conveniently.
In this article, we explore what exactly omnichannel retail entails, including its benefits for shoppers and retailers.
The Future of Omnichannel Retail
Omnichannel retail refers to a seamless and integrated shopping experience that allows customers to interact with a brand across multiple channels, including physical stores, online marketplaces, social media, mobile apps, and more.
The goal is to provide a unified and consistent experience that meets customers' needs and preferences, regardless of how they choose to engage with the brand.
The way omnichannel retail works is by using digital technologies to connect the different channels and create a single view of the customer. For example, a customer may start browsing a product on a retailer's website, add it to their cart, and then decide to visit the physical store to see it in person before making a final purchase. With omnichannel retail, the retailer can track this customer's journey across channels, ensure that the product is available in-store, and even send personalized promotions or recommendations based on the customer's preferences and past behavior.
A truly omnichannel retail environment should eliminate the frictions and barriers that often arise for customers when shopping across channels. For instance, customers may find it challenging to access accurate product information, compare prices, or complete a transaction on different devices or platforms. An omnichannel approach addresses these issues by providing a consistent user interface, optimized for each channel and device, and enabling features such as click-and-collect, ship-from-store, or in-store returns.
Many of these capabilities are already present in today's retail environment. According to one study by pwc and Kantar Retail, about 80% of retail companies were investing in omnichannel in 2022, up from just 20% in 2012.
Benefits of Implementing an Omnichannel Approach
The benefits of omnichannel retail are numerous, both for customers and retailers. For customers, it means greater convenience, more choices, and a higher level of satisfaction, as they can expect the same quality of service and attention regardless of the channel they use.
For retailers, it means higher sales, stronger customer loyalty, and deeper insights into customer behavior. This is because the omnichannel approach allows retailers to track and analyze customer data across channels. They can then use insights from that data to optimize their operations and marketing strategies.
Challenges of Integrating Physical Stores with Digital Channels
In concept, omnichannel retail is relatively straightforward. However, implementing it typically requires a significant amount of adaptation, both in terms of physical stores and technology infrastructure. This can result in challenges for retailers.
One of the most significant obstacles is the need to redesign an existing technology infrastructure to support the flow of data across channels. This involves creating new systems or updating their current systems to manage customer interactions better, and in a single environment.
Inventory management can also be challenging, especially when stores are being leveraged as warehouses for eCommerce sales.
Retailers must ensure that their inventory data remains accurate and up to date across all digital channels to avoid stock-outs. They need to implement real-time inventory tracking solutions that integrate with their point-of-sale systems and online marketplaces.
Furthermore, integrating physical stores with digital channels involves more than just technology. Retailers also need to redesign their brick-and-mortar stores with new customer experiences in mind, and they may need to train staff on new processes.
Strategies to Help Retailers Achieve a Seamless Omnichannel Experience
To achieve a seamless omnichannel experience, retailers must first understand the needs and preferences of their customers. They must also ensure that all their channels are connected and able to communicate with each other in real-time. Furthermore, they must devise strategies that support a consistent customer journey across all channels.
One strategy is to use multi-channel marketing campaigns that leverage both online and offline mediums. This can help retailers promote their products and services across all channels, strengthen customer relationships, and generate more sales.
Advanced data analytics are also necessary to gain insights into customer behavior across channels and generate a complete view of the customer. Ideally, data will be parsed, stored, and analyzed in a single location, providing each area of the business clear visibility into the customer.
Finally, retailers should seek out innovative technologies such as AI-enabled personalization and automated customer support. These technologies can help retailers create a more personalized shopping experience for customers across all channels, which will in turn improve customer loyalty and lifetime value.
Don’t Miss the Next eTail Canada Event
Omnichannel retail is becoming increasingly important for today's retailers. By understanding the benefits, challenges, and strategies associated with it, retailers can ensure they are well-positioned to capitalize on the advantages it offers.
To learn more about how your company can implement a truly omnichannel retail environment, don’t miss the next eTail Canada event. It’s happening from September 27th to 28th at the Hyatt Regency Toronto in Toronto, Ontario.
Download the agenda and register for the event today.