If you follow the world of retail at all, you’ve undoubtedly heard the term “omnichannel retail.” Over the past 10 years, interest in the idea of omnichannel approaches has surged from the elite world of top global business schools and consulting firms to become a major theme for retail companies of all shapes and sizes.
Google Trends analysis of “omnichannel”. The interest in omnichannel makes a lot of sense if you look at the changing world of retail overall. According to eMarketer, e-commerce sales stand at 16% of all retail sales or $4.2 trillion of the total $26.1 trillion value of the retail market in 2020.
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They forecast that this growth will continue and reach 22% of all retail by 2023, marking a 112% increase in just six years—in research completed before the COVID-19 crisis which helped trigger a 44% jump in e-commerce sales in the U.S. in just one quarter (per U.S. Census data).
It’s no wonder that both online and offline (brick-and-mortar) retailers continue to remain obsessed with finding ways to optimize their sales across digital channels. It’s a big deal. Companies with omnichannel strategies retain 89% of their customers from channel to channel.
In the material below, we’ll cover a more detailed definition of omnichannel as well as clear up some misconceptions about what it means specifically for e-commerce retailers. We’ll then provide insights on how to realize the benefits of the omnichannel approach by offering shopper experience that remains seamless across the ways that you market, their overall shopping experience, and in the purchase and payment experience – online, through mobile devices, and more.
And if you think having an omnichannel experience doesn’t matter to you because your business is online-only, you should definitely read on. We have a lot of great insight for you. One of the most important things you’ll learn is how you can adopt an omnichannel mindset to create better and more profitable relationships with your customers.
The meaning of the word “omnichannel” varies from expert to expert. It has also changed a lot over the course of the 10+ years since it first emerged. In 2009, smartphones were still relatively new in the world of mobile devices, Facebook had less than 250 million users, Instagram hadn’t launched yet, and many other social media from Snapchat to TikTok hadn’t even been thought of.
For our purposes now, let’s use a definition of omnichannel that makes sense in today’s world.
This definition should be contrasted with multichannel. Multichannel implies a separation between the channels that you offer. Although it seems like a subtle distinction, read on to find why omnichannel is a better way to think about it.
In today’s world, everything is a channel, even if you’re an e-commerce business. Even if you have no plans to open a brick and mortar store, you may have a website, a mobile app, a Facebook Store, an Instagram shop, other social media platforms, an Amazon storefront, affiliate sites, and more.
How seamless is your shopper’s experience in doing business with you across different channels, no matter what? When you think of your most loyal customers, do you present yourself to them the same way no matter how they find you?
Before we dive into the details, it’s helpful to review how we got to this point from the early days of omnichannel.
A Little History Lesson
Omnichannel used to mean something as simple as integrating physical stores with e-commerce. Examples include ordering through online channels and picking up in-store, ordering via an online store and making returns to a physical store, or ordering at a digital kiosk in a store and shipping the product to a home address.
These are familiar now, but many stores struggled to get this right. Even as recently as 2018, a study found that 87% of retailers agree omnichannel is critical but only 8% believed they were proficient at implementation.
One common mistake was that their approach wasn’t seamless at all. Yes, shoppers could buy online and offline, but they had vastly different experiences, product selections, and even different customer service processes. It was as if the offline and online channels were operated by separate companies.
That was then. Retailers like Walmart have now set the gold standard for an integrated experience across stores and digital channels. There are many success stories out there. Omnichannel helped Walmart find its footing against tough competition from Amazon.
The biggest lesson learned during these early, sometimes failed efforts at offering an omnichannel experience was quite simple. Shoppers don’t care about your internal structure, your different project teams, or even about the differences between different channels. They just want to buy the things they want and need—without the hassle and confusion.
In other words, omnichannel isn’t just an operational structure. Omnichannel is a specific type of customer experience that delivers exactly what people want when they buy from you across all of the different available channels.
Getting your omnichannel strategy right means focusing on three areas: marketing strategies, the customer journey, and their experience when they make a purchase. Consider them as the three essentials for a successful omnichannel strategy.
What Omnichannel Means for E-Commerce
As we’ve suggested above, omnichannel doesn’t necessarily mean you’re a brick-and-mortar store looking for a way to sell online. If you’re an e-commerce business, it doesn’t even mean that you’re looking for a way to sell in stores (although that can be part of your omnichannel strategy if you choose).
Instead, an omnichannel strategy in e-commerce means that every channel offers a seamless experience. In moving through every channel, shoppers can pick up on their customer experience just where they left off. The operative word, again and again, is seamless.
Seamless Marketing Strategies
The digital advertising platform Instapage has an excellent definition of omnichannel marketing.
“Omnichannel marketing refers to the concept of providing a seamless user experience across all channels relevant to the buyer’s journey. The term emphasizes a shift in the way people progress through the marketing funnel.” (Original source: Instapage)
Keeping this in mind, getting omnichannel marketing right means three things: authenticity, consistency, and relevance.
Authenticity has to do with making sure that your brand truly represents what it stands for regardless of which marketing channels you try to use, especially with digital marketing.
If you’re a fairly conservative clothing brand focusing on business casual apparel, for example, you may be interested in advertising on Facebook and Instagram as well as running digital display ads on business and finance websites. You might think that you need to look edgy or be funny in your social media ads in order to match what other brands are doing.
If your edgy social campaigns succeed in getting click-throughs, you’ll actually be wasting money since you’re capturing the wrong audience for your brand. More likely, however, your supposedly edgy ads will just fail to ring true, and they won’t successfully capture that audience of business professionals who would actually shop your brand. Either way, you’ve created a disconnect with inconsistent content marketing rather than a seamless experience.
Consistency refers to the tone, look, and feel of every touchpoint in the marketing funnel. If your ad leads to a landing page which then leads to a shopping cart, these should all provide a seamless experience to shoppers as they become aware of your product through the ad, then consider your product when visiting your landing page, and finally purchasing the product via your shopping cart.
Consistency even translates down to the level of font and color choices and ad imagery. Everything you put out in every channel should recognizably evoke your company and brand.
Shoppers can start to get to know you in so many different ways, any time, in any location, using any device. As they continue down that path, it’s increasingly important to offer them a seamless user experience no matter how they start or how they progress.
Relevance means connecting the marketing experience that you give your potential shoppers with the reality of who they are and how they buy. This is especially true with digital marketing strategies. It’s helpful to see them as falling into one of four personas—but keep in mind, sometimes shoppers vary between one persona and another. They might have different preferences and behaviors depending on the type of goods they want to purchase.
Based on research by McKinsey: “How to Capture What the Customer Wants”
As the descriptions suggest, “digital by lifestyle” shoppers want a digital experience from end-to-end. They expect it to be seamless and easy. When reaching these shoppers via an omnichannel marketing approach, don’t underestimate their high expectations. For example, if you advertise on Instagram, don’t just take them to your home page. Take them to a specific product or sign-up page.
“Digital by choice” and “digital by need” together represent the majority of consumers. They have varying degrees of willingness to make a purchase online. In addition to making it seamless for them, you must also make it easy and not intimidate them with advanced features. Think about ways to take it slow, such as advertising using paid search, then having them sign up to your email list, then sending promotions or discount codes to their email address.
For e-commerce retail, fortunately, the offline society represents a relatively small slice of the market. As you grow, you might eventually consider trying partnerships with brick-and-mortar stores or allowing sales by phone with traditional media buys on radio or television to capture some of their spending, but from a marketing perspective, it’s very challenging and costly to carry out an omnichannel strategy for this segment of the consumer population.
Seamless Customer Journey
When we’re talking about the customer journey, we’re focused on everything shoppers do after their first marketing touchpoint. The full customer journey includes receiving more targeted advertising and promotions, browsing for products, making a purchase, and then making repeat purchases with you.
As with marketing, the customer journey can occur across multiple channels. The Harvard Business Review conducted a study of over 46,000 shoppers and found that 73% used multiple channels. At one point, this would’ve meant just online or offline, but in today’s world, the options are so much more varied. Shoppers might come across your products by using a search engine, by seeing search ads, by seeing social media ads, or by using a third-party online store directory such as Splitit’s.
Facebook and Instagram storefronts are a great example of how many paths the customer journey can take in today’s retail environment. E-commerce retailers can build parallel storefronts on these platforms so that they can showcase specific product lines. These storefronts offer an equivalent experience to that of browsing the e-commerce site directly.
After using the social platform to discover products, the shopper can then make a purchase directly from your product inventory. E-commerce platforms like Shopify and BigCommerce make this extremely easy by offering add-ons for different sales channels. With such add-ons, you can also reach customers in other destinations for shopping online such as eBay, Amazon, or Walmart.com.
One challenge with offering an omnichannel customer journey that involves partners is losing control of the customer. If your shopper buys your product from Amazon or Walmart, for example, they may not even realize that they’ve done business with your company. Make sure to solicit reviews and offer promotions specially to these loyal customers to keep them coming back, just the way you would if they bought directly through your site.
Did we skip something? Yes! We still have not spoken about the actual steps required to make a purchase.
Here are three things you should do to make the purchase experience as seamless as possible:
- Encourage users to sign up for an account and provide their email address so that you can offer them a persistent shopping cart whenever they’re shopping online. For example, if they click an Instagram ad on their smartphone, go to your site, and add a product to their cart, that product should be in their cart when they visit your site from their tablet or laptop.
- No matter how they browse and buy, offer them as simple and seamless a purchase experience as possible. Don’t load them down with multiple screens or complex forms to fill out. This complexity sometimes arises when offering consumer financing during the shopping experience, which requires them to undergo a credit application.
- Make sure they have the same options for payment no matter what. For example, with Splitit, we encourage merchants to integrate Splitit as an option whether it be in-store Point-of-Sale terminals, websites, and more. The same is true for alternate payment options such as PayPal or eChecks. It’s always best to offer them everywhere a shopper buys from you, as much as possible, instead of frustrating shoppers with inconsistent options that come and go.
How to Develop an Omnichannel Mindset
Make no mistake – an omnichannel strategy can be very challenging to get right. Omnichannel success depends on the art of detail, and typically comes down to the technologies that you use for shoppers to shop with you.
However, there’s one very powerful tool that you can use in your favor, and it has nothing to do with technology. It’s a human skill—empathy. Retailers can put themselves in the shoes of the shopper, and think about what the shopper is trying to do. In other words, design the experience for human beings rather than based on your internal departments, your company structure, or your resources.
By adopting this mindset, you’ll gain enormous insight into what to avoid in terms of inconsistency, frustration, and complexity. You’ll have a clear, straight-line view of what shoppers need.
In addition, take the mindset of incremental change to heart. No one says that undertaking omnichannel requires you to tackle all channels at once. Instead, do one thing at a time.
Once your desktop and mobile site are working seamlessly, consider adding a Facebook shop or a dedicated mobile app, for example. Once your paid search ads are working well and converting at a high rate, try other ad channels.
This approach allows you to think calmly, detail by detail, about what elements of the shopper experience need to be replicated in both your operations and your marketing.
When you look at the brands that really master omnichannel, companies like Disney, Chipotle, Sephora, Walgreens, and Purple, you can be sure they didn’t become omnichannel overnight. Instead, they experimented, they added things over time, and they put their shoppers first.