What is Omnichannel Retail: Definition and Strategies

The retail landscape is incredibly competitive, no matter whether you are running an online store or relying on physical locations to attract customers.

In such a dynamic environment, standing out from the crowd can be a significant challenge.

One of the ways to build a solid customer base and guarantee customer satisfaction across channels is through omnichannel retailing. 

In the following sections, we explore what this retailing strategy is and what it offers. We also share practical tips for creating an omnichannel retail strategy for your business, cover some of the challenges to consider, and more. 

What is omnichannel retail?

In order to understand the essence of omnichannel retail or omnichannel commerce, it’s fundamental to look at the basics and start off with a definition. 

Omnichannel retailing represents a business model approach in the retail industry where companies engage shoppers through different customer touchpoints. This strategy is applicable to both online shopping and in-store shopping. 

Just like omnichannel marketing, retail omnichannel sets the scenes for a consistent brand experience, which naturally boosts customer loyalty.

In today’s retail environment, businesses are actively relying on diverse omnichannel services and experiences. This helps boost the reach of a brick-and-mortar store, position products and services in front of a wider audience, and meet consumer expectations. 

The modern shopper embraces the full diversity of available shopping options, from brick-and-mortar stores to shopping online via mobile apps and social media channels. Customers expect omnichannel customer service, featuring lockers for physical stores, abilities to shop online, and more.

Via omnichannel retail, retailers can offer convenience, a seamless shopping experience, and personalisation, no matter whether buyers shop online from a desktop or mobile device or purchase in-store.

Omnichannel vs. multichannel in retail

Omnichannel retailing is often confused with a multichannel strategy.

Although these techniques can provide similar benefits for your retail business plan, they differ fundamentally.

Just like omnichannel retailing, multi-channel retailing involves actively using multiple channels, like a physical store, an online shop, and mobile apps. All of these channels function independently from one another to help establish customer relationships and boost customer loyalty.

However, with multi-channel retailing, there are risks of creating inconsistent experiences, which can negatively influence inventory management and data analytics. 

For example, businesses can have outstanding marketing campaigns across social media platforms, a well-developed website, and unmatched mobile marketing. But unless these pillars work together as a whole, they won’t be able to create an omnichannel customer experience.

In contrast, omnichannel retail creates a unified customer experience across all available channels. This consistent experience is made possible thanks to an interconnected, customer-centric approach. 

Some of the features that make this possible include buying online, pick-ups for in-store purchases, advanced customer data, and more. 

What are the benefits of the omnichannel approach in retail?

Establishing an omnichannel retail experience for your business can be incredibly rewarding.

Here are some of the advantages of taking this approach as a retailer.

Enhance customer experience

One of the biggest perks of omnichannel retail is that it helps create a seamless experience for all of your shoppers, no matter whether they prefer to purchase online or are in for an in-store experience. 

Regardless of the platform they engage with your brand on, they’ll be on a consistent and integrated shopping journey. 

As a result, you can dramatically improve your customer engagement. Omnichannel retail can minimise friction and improve satisfaction which allows your clients to quickly shift between channels without negative consequences. 

For example, they can initiate the shopping experience on their mobile device, continue on a laptop, and complete the purchase online. Throughout these phases, they’ll continuously maintain their shopping cart, preferences, and history.

This could encourage consumers to repeat purchases with your brand and turn into loyal customers.

Increase revenue

In addition, omnichannel retail can have a positive impact on your revenue.

By providing diverse customer touchpoints and options for shoppers to engage with your business, you are offering peace of mind – a much sought-after asset.

Pampering users with consistent customer journeys inspires future repeat purchases.

Moreover, omnichannel retail features, such as buy online and pick-up in-store motivate shoppers to experience a brand from the perspective of their physical shop. This can trigger unplanned purchases and additionally boost revenue. 

Not to mention that omnichannel retailing can also help increase the average order value for your business, instantly raising sales. 

Reach customers on their preferred channels

Another key benefit of omnichannel retail is that it enables brands to reach shoppers where they feel most comfortable shopping.

In today’s retail world, consumers take advantage of multiple channels to browse for products, get to know brands better, and shop. 

By being present and consistent across the channels that your buyers use, you can position your products in front of a broader audience and cater to different shopping habits. 

This can ultimately help you establish a larger customer base and grow your reputation in the industry. 

Personalise customer interactions using data

The best way to ensure customer satisfaction is to make data-driven decisions. 

Via omnichannel retail, you can use diverse touchpoints to analyse and customise customer interactions.

Omnichannel retailing allows businesses to gain valuable insights into customer behaviour, track key performance indicators across platforms, and understand more about shoppers’ preferences. 

As a result, you can create tailored promotions, make better recommendations for your target audience, and overall – invest in targeted marketing based on data.

Better inventory visibility

With the help of advanced inventory visibility, you can ensure your products are delivered on time and to the right places.

As a result of efficient partnerships with vendors, distributors, and suppliers, you can rest assured that your products are visible and on point.

Omnichannel retail creates opportunities for reliable inventory tracking via interconnected analytics and centralised platforms. This can significantly improve your communication with vendors and other third parties. 

Most importantly, having an accurate overview of your inventory can empower you to make upsell and cross-sell suggestions. A great example is having store associates or online shop associates make recommendations for similar products in cases where items are out of stock.

Difficulties in adopting omnichannel strategies in retail

Although crafting a successful omnichannel strategy can be extremely rewarding, it can also be challenging to achieve. 

Naturally, this approach to growing your brand and attracting and retaining shoppers requires significant resource investments.

Some of the core difficulties to consider include:

• Technology integrations – syncing online and offline sales channels, inventory management systems, and CRM tools can be a challenge, especially for smaller retailers with limited budgets and less experience.
• Data management – omnichannel approaches to retail go hand in hand with the generation of vast amounts of data. In order to make use of this valuable information, it’s key to have the capabilities to collect, store, and analyse it, which requires qualified employees and advanced data management systems.
• Consistency – achieving consistency across platforms can be more difficult than it sounds. All data on product availability, pricing, as well as your customer service must be consistent for shoppers, no matter whether they shop online or in-store. This requires extensive planning, monitoring, and ongoing updates.
• Employee training – in most cases, transitioning to an omnichannel retail strategy requires extensive training and education in order to create a smooth shift. Employees at all levels must go through training programs, which can often be time-consuming and expensive.

Overcoming these difficulties, however, will enable you to exploit the full potential of an effective omnichannel retail strategy, rewarding you with fruitful gains as a business.

How to build a successful strategy?

Setting up an effective omnichannel retail strategy requires careful planning and preparation.

Here are some practical tips and tricks to shifting towards this approach.

Segment your customers

The first step to creating a successful omnichannel retail strategy is understanding your customers. 

Customer segmentation can be achieved via different methods. The right one will depend on the nature of your business, your capabilities, and your requirements.

The aim of customer segmentation is to help you determine what types of customer groups you’ll be dealing with. Having access to this information will empower you to create custom offers to them and work with a personalised strategy. 

There are a range of different factors that you can use to segment your customers. Some of the most popular ones include income range, location, generation, values, and more. 

Find the best channel for every segment

Next, your goal is to identify the physical and digital channels that work best for each customer segment.

Usually, retailers have a broad start, exploiting platforms like Google and Amazon, or dominating social media channels, like Facebook and Instagram. As their awareness of different customer groups improves, they can niche down and shift to narrow, yet more effective platforms based on their offering. 

To determine which channels work best, you can rely on analytics and segmented qualitative and quantitative data.

Create a customer journey map

Once you’ve gotten to know your shoppers and you know which channels each segment uses, it’s time to create a customer journey map. 

Customer journey maps are especially important for retailers as they demonstrate the buyers’ thorough process. They offer insights into what the customer is thinking and doing, and most importantly – why.

What types of keywords are your buyers using to browse for products that you offer? How much time do they invest in research? Are they impulse decision-makers or do they prefer to receive informational materials before making a choice?

Having the answers to these questions and others will help you map out your customers’ journey. This information will enable you to make data-driven decisions to create a seamless experience across channels. 

It’s important to remember that the customer journey constantly changes and evolves. Keep in mind that it’s a must to stay up-to-date and monitor your customers. 

Provide cross-channel experience

Earlier, we mentioned that shoppers nowadays rarely use a single channel to browse and shop for products and services. Instead, they rely on multiple sales channels and opt for the ones that offer the most convenience. 

As a retailer, it’s natural to prioritise being able to capitalise on all of these different channels. However, if this is the path that you wish to explore, offering cross-channel customer support is vital. 

This means that your marketing channels must be in sync with your websites, in-store presentation and availability, and more.

Integrations with other systems

On the road to omnichannel retailing, integrations with other systems and online platforms is a must.

This is especially important for your inventory management. 

For example, let’s say you sell luxury handbags across different channels. It’s fundamental that you create a unified view of your offering and of every single product you have available. In addition, it’s essential that each item is accurately presented and recommendations can be made for shoppers considering this product.

There are plenty of different tools and instruments that you can experiment with to achieve a high level of integration. 

Automate

Automation can turn into one of your most valued assets when it comes to creating an omnichannel business strategy. For instance, there are various repeatable processes that you can easily automate, freeing up valuable time for other priority tasks. 

Think of opportunities like relying on chatbots to answer frequent customer questions. Additionally, you can explore the possibilities of creating behavioural triggers to offer custom marketing to your shoppers, no matter where they are in their customer journey. 

Other popular methods include abandoned cart programs, automated follow-up messages, and others. 

Examples of successful omnichannel strategies

In the UK, there are a number of well-known and successful brands that take advantage of all that omnichannel retail has to offer. 

Here are some of the most eminent examples of successful omnichannel retail strategies:

• John Lewis – a brand that stands out with a highly integrated strategy across their offline and online channels. Shoppers can explore products online, check their availability in stores, utilise click-and-collect services, and more.
• Marks & Spencer – another brand that makes the most of click-and-collect services, enabling shoppers to order online and pick up in-store. They also explore different avenues for boosting in-store experiences via mobile technology. Not to mention that the brand provides personalised recommendations based on browsing history.
• ASOS – some of the omnichannel features ASOS provides include returns across different channels (such as physical drop-off points and postal services), tailoring recommendations, and personalised marketing campaigns across platforms.

The success and impressive financial performance of these brands illustrate how omnichannel experience efforts can help unlock the full potential of any business.

Omnichannel retail trends for 2024

In 2024, the retail industry welcomed a few new trends when it comes to omnichannel retailing. The year also saw existing models reinforcing themselves as leaders.

Here are some of the omnichannel retail trends worth knowing about in 2024.

AI-based personalisation

Naturally, omnichannel retailing centres around personalisation and consistency throughout the entire customer journey. One of the best ways to achieve an unbeatable level of personalisation is through the use of AI technology. 

Artificial Intelligence algorithms can quickly and easily process and evaluate large volumes of customer data like browsing history, purchase patterns, preferences, and more. 

By having access to this powerful information, retailers can provide tailor-made recommendations that will improve customer service and ultimately boost customer satisfaction.

The Metaverse 

Although the Metaverse is still in the process of evolving and reaching mature stages, it’s a trending topic among retailers exploring omnichannel strategies.

This collective virtual shared space offers a plethora of opportunities for enhancing the physical reality thus enabling retailers to offer immersive and interactive shopping environments.

For example, think of exploring virtual stores, seeing how products look on you via virtual avatars, and more. 

Shoppertainment 

Another key omnichannel retail trend in 2024 is shoppertainment – a combination of shopping and entertainment.

This realm is focused on offering engaging and entertaining shopping experiences via the power of social media and video platforms. 

One great example of shoppertainment is live streaming commerce. In this case, businesses demonstrate products in real time and interact with viewers. Under this format, retailers create a sense of urgency and excitement around new releases, product catalogues, and more. 

The future of omnichannel in retail

The digital world continues growing and evolving, which gives rise to new shopper expectations and requirements. Naturally, this creates shifts in the retailing niche. 

Omnichannel customers are actively searching for convenience in their shopping experiences. This calls for enhanced interchanges and integrations in-store and online.

AI is expected to continue growing in popularity and dominating the world of omnichannel retail, alongside machine learning. 

These technologies will allow businesses to turn shopping experiences into a truly personalised journey. For example, AI can help forecast customer preferences, while AI-powered chatbots and virtual assistants are expected to take real-time customer support to the next level.

As the world of retail continues adapting to emerging technologies, we’ll be witnessing new and exciting opportunities to enhance omnichannel retailing. 

Frequently asked questions

What are the key benefits of omnichannel retailing for customers?

Omnichannel retailing offers a wide array of benefits for customers by providing high levels of flexibility and convenience. Shoppers can enjoy a seamless shopping experience regardless of the platform they’re using and enjoy peace of mind knowing that their customer journey is smooth and undisturbed among all online and offline channels.

Is an omnichannel marketing strategy easy to implement?

Strategizing an omnichannel marketing approach requires a significant investment of time and other resources. However, with a reliable plan in place and consideration of the possible risks, you can use more channels for the benefits of your business./p>

Does omnichannel retail impact inventory management?

Yes, omnichannel retailing has a significant impact on inventory management as it requires real-time, accurate data on inventory levels across more than one channel. In order to achieve this level of precision, businesses must integrate inventory systems to make sure that all offerings are in stock whenever and wherever shoppers require them.