Omnichannel retail: Seamless shopping experience

February 27th, 2024 17 minute read
Henry Kivimaa Photo

Henry Kivimaa

Copywriter

February 27th, 2024 17 minute read
Wooden dice showing different omnichannel sales strategies

Once upon a time, if a shopper was looking to make a purchase, they had to find a store selling the desired item, physically locomote there, and only then could they acquire it. Then along with the dotcom boom, arrived thousands of websites for every business and person imaginable. Many of them provided moderately low-value experience — giving a little intro about the person behind the website, introducing you to their cat, and listing some games like RuneScape that they liked to play.

Luckily, besides these personal homepages, some websites did provide value — among them — online stores, paving the way to a new kind of shopping experience known as e-commerce, a precursor to omnichannel commerce.

Online stores allowed businesses to set up shop for quite cheap, compared to brick-and-mortar stores. They were also easily accessible to consumers. This led every business owner and their grandma to open an e-commerce store and start selling goods online.

While many businesses did move completely online, a great deal decided to benefit from both online and offline shoppers, offering a new kind of sales experience for consumers.

One of the early examples of a move towards omnichannel commerce can be seen with companies like Best Buy and Walmart in the early 2000s. These retailers began to integrate their online and offline channels by allowing customers to order products online and pick them up in-store, or by providing the ability to check store stock levels online.

This integration represented a significant shift towards providing a more cohesive shopping experience, utilizing omnichannel technologies to bridge the gap between digital and physical retail spaces.

Though it was just the beginning of what would eventually be known as omnichannel retailing, the term “omnichannel” itself started gaining popularity in the retail industry around the 2010s as technology advanced and consumer expectations for a seamless shopping experience increased.

Retailers began to recognize the importance of offering a unified brand experience across all customer touchpoints, including social media, customer service, and mobile apps, in addition to traditional online and physical stores, thus crafting a comprehensive retail strategy,

As we delve deeper into omnichannel retail trends, it’s important to understand precisely what is omnichannel retail and how it differentiates from traditional retail models. Just to make it crystal clear, let’s go over the definition of omnichannel retail, emphasizing its importance in today’s consumer market and highlighting how omnichannel commerce has evolved to meet the ever-changing needs of shoppers.

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What is omnichannel retail?

Omnichannel retail is a multichannel approach to sales that aims to provide customers with a seamless shopping experience, whether online from a desktop or mobile device, by telephone or in a brick-and-mortar store. This strategy leverages omnichannel technologies to weave the different shopping methods available to consumers into one cohesive experience.

The term “omnichannel” goes beyond a simple cross-channel business model by emphasizing integration and coherence among channels, ensuring that customers can switch between modes of shopping effortlessly.

The foundation of omnichannel retail lies in understanding and meeting the customer’s needs at every touchpoint. It’s about creating a consistent brand presence that allows consumers to move smoothly between physical and digital storefronts without a hitch in their experience.

For instance, a customer might see a product online, decide to check it out in person at the store, and then choose to purchase it through the company’s mobile app. An omnichannel approach ensures this journey is possible, practical, and pleasant.

Key components of omnichannel retail include:

  • Shared data and analytics
  • Consistent and personalized marketing messages across channels
  • A unified customer service philosophy

Businesses can tailor their offerings and interactions to better meet individual customer preferences and behaviors by leveraging data collected across various channels. This personalized approach enhances the customer experience while simultaneously boosting loyalty and sales.

Omnichannel retailing recognizes the blurred lines between online and offline shopping.

Consumers today expect flexibility, convenience, and a personalized shopping experience. An effective omnichannel strategy meets these expectations by providing a comprehensive, integrated shopping journey, ensuring that customers who walk into a store, browse a website, or use an app receive the same quality of service and brand experience.

Omnichannel vs. multichannel retail

We mentioned that omnichannel retail is a multichannel approach, but you may have seen these terms used interchangeably. So, is there really a difference? Absolutely. While both omnichannel and multichannel retail involve selling products through multiple channels, the key distinction lies in how these channels are integrated and the overall customer experience they deliver.

Multichannel retail

Multichannel retail refers to the practice of engaging customers through various channels, such as physical stores, online websites, social media platforms, and more, without necessarily integrating these channels.

Each channel operates independently, with its own strategy and goals. The focus here is on maximizing the reach and efficiency of each channel to capture a broad audience.

However, this approach can lead to a fragmented customer experience, as the lack of integration between channels may result in inconsistent messaging, branding, and customer service.

Omnichannel retail

Omnichannel retail, on the other hand, takes a more customer-centric approach. It not only recognizes the importance of multiple channels but also focuses on creating a cohesive, integrated experience across all of them.

The idea is to make the transition between channels seamless for the customer, making sure they receive a consistent brand experience whether shopping online, through a mobile app, or in a physical store. This requires a deep integration of backend systems, from inventory management to customer relationship management (CRM), to provide a unified view of the customer and enable personalized interactions.

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Example of an omnichannel retail strategy

An example of a successful omnichannel retailing strategy can be illustrated through the journey of a fictional retail brand, “EcoWear.”

EcoWear sells sustainable clothing online and through physical stores. Its omnichannel commerce strategy is designed to offer a seamless and personalized shopping experience across multiple channels, ensuring that customers can interact with the brand in a way that’s most convenient for them at any given moment.

Website and mobile app integration

EcoWear’s website and mobile app are fully integrated, allowing customers to save their shopping cart and preferences across devices.

A customer might begin browsing the EcoWear collection on their mobile app during their commute and later switch to the website on a desktop to complete the purchase, finding their cart items and preferences saved and ready for checkout — a prime example of omnichannel technologies at work.

Personalized marketing

Utilizing customer data from both online and offline purchases, EcoWear sends personalized email and app notifications about new arrivals, exclusive deals, and recommendations based on past shopping behavior.

This targeted approach enhances customer engagement and encourages repeat visits to both the website and physical stores.

In-store experience

In EcoWear stores, customers can use interactive kiosks to browse the entire inventory, including items not currently available in-store. They can also scan product barcodes to read reviews, check stock in other locations, or order products to be shipped directly to their home if their size or preferred color is not available in-store.

Seamless online-to-offline services

EcoWear offers services like “buy online, pick up in-store” (BOPIS) and “buy online, return in-store” (BORIS), bridging the gap between online and offline shopping.

Customers appreciate the flexibility of shopping online at their convenience and the immediacy of picking up their purchases or handling returns in person, without the wait or cost of shipping.

Social media integration

EcoWear leverages social media platforms not just for marketing, but as channels for sales and customer service. Customers can shop directly from Instagram posts, engage with the brand through Facebook Messenger for queries, and participate in Twitter (X) polls to influence future product lines.

Loyalty program

The EcoWear loyalty program rewards customers for purchases made both online and in-store, as well as for social media engagement and in-app activities. Points can be redeemed for discounts, exclusive access to sales, or special in-store experiences, encouraging a continuous cycle of engagement across all channels.

This omnichannel strategy enables EcoWear to provide a cohesive, customer-centric shopping experience that increases engagement, boosts sales, and builds loyalty.

By integrating their online and offline channels, EcoWear ensures that customers receive personalized, convenient service regardless of how they choose to shop.

The importance of omnichannel retail

The importance of omnichannel retail in today’s market cannot be overstated. As consumer expectations evolve and digital technology advances, the ability to offer a seamless, integrated shopping experience across multiple channels has become not just a competitive advantage but a necessity for survival and growth in the retail sector.

Here are several reasons why omnichannel retail is so crucial.

Bridging the online-offline divide

Omnichannel retail is pivotal in bridging the gap between online and offline worlds, creating a unified retail ecosystem. This connectivity is essential as it reflects the modern consumer’s journey, which fluidly spans across digital and physical realms.

By seamlessly connecting these two spheres, retailers can offer a comprehensive and engaging shopping experience that aligns with today’s interconnected lifestyle.

Building a resilient retail model

The integration inherent in omnichannel strategies fortifies businesses against market volatility and changing consumer trends.

By diversifying the ways in which customers can interact with and purchase from a brand, retailers build resilience against disruptions, whether they’re caused by economic downturns, technological shifts, or global events. This adaptability is crucial for long-term viability in an ever-changing retail landscape.

Omnichannel retail in numbers

  • Approximately 73% of consumers prefer to shop across multiple channels.¹
  • Shoppers who utilize multiple channels exhibit a 30% greater lifetime value compared to those who shop via a single channel. ¹
  • Customers engaging with multiple channels tend to spend about 4% more in physical stores and 10% more online than those who limit their shopping to one channel.²
  • 43% of consumers report making online purchases from their beds, while 23% do so at work, and 20% engage in online shopping from the bathroom or while driving.³
  • 98% of Americans switch between devices daily, with 57% open to sharing personal information in return for personalized interactions with brands.⁴

Optimizing inventory and supply chain efficiency

Beyond customer-facing benefits, omnichannel retail plays a critical role in optimizing backend operations.

By providing a unified view of sales, inventory, and customer data, businesses can make more informed decisions regarding managing your inventory, supply chain logistics, and demand forecasting. This optimization reduces waste, lowers costs, and improves the overall efficiency of retail operations, contributing to a healthier bottom line.

Enhancing competitive strategy through differentiation

Retail is competitive, and to succeed, you need to differ from the countless others in this space.

Omnichannel retail allows businesses to distinguish themselves through the quality of the customer experience they deliver. By offering a seamless, integrated experience across all channels, retailers can elevate their brand in the eyes of consumers, differentiating themselves from competitors who may still be operating in silos or focusing solely on price competition.

Future-proofing the business

Embracing omnichannel retail is also an investment in the future. As digital technologies continue to evolve and consumer preferences shift towards more integrated and personalized experiences, businesses that have already adopted an omnichannel approach will be better positioned to adapt and thrive. This forward-thinking strategy ensures that retailers remain relevant and competitive in the digital age.

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Benefits of omnichannel retail

The transition to omnichannel retail offers many benefits for both businesses and consumers. By providing a seamless shopping experience across all channels, companies can meet the high expectations of today’s consumers, thereby driving sales, enhancing customer satisfaction, and fostering loyalty.

Below, you’ll find some key benefits of implementing an omnichannel retail strategy.

Enhanced customer experience

One of the most significant advantages of omnichannel retail is the improvement in customer experience. Customers appreciate the convenience and flexibility of shopping across multiple platforms without friction.

An omnichannel approach ensures that whether they are online, on a mobile app, or in a physical store, the shopping experience is consistent and seamless. This convenience can lead to increased customer satisfaction and loyalty.

Increased sales and revenue

Omnichannel retailing can lead to higher sales and revenue. By offering multiple channels for customers to make purchases, businesses can capture sales from customers who prefer different shopping methods.

Additionally, the integrated data and analytics from an omnichannel strategy enable businesses to create personalized marketing and sales tactics, potentially increasing the effectiveness of these efforts and boosting sales.

Improved customer insights

Implementing an omnichannel strategy allows businesses to collect and analyze data across all channels, providing valuable insights into customer behavior, preferences, and purchasing patterns.

This comprehensive view enables companies to tailor their product offerings, marketing messages, and overall strategy to better meet the needs of their target audience, resulting in more effective customer engagement.

Higher customer retention

The personalized and seamless experience omnichannel retail offers can significantly enhance customer loyalty. Customers who enjoy a consistent and convenient shopping experience across multiple channels are more likely to return.

Personalization, driven by integrated data analytics, further strengthens this relationship by making customers feel valued and understood, increasing retention rates.

Competitive advantage

In a market where consumers have endless choices, offering an omnichannel experience can set a business apart from its competitors. Companies that successfully implement an omnichannel strategy are seen as customer-centric and innovative, attracting customers who seek convenience, personalization, and a high-quality shopping experience.

Operational efficiency

Omnichannel retail can also lead to improvements in operational efficiency. Integrated inventory management systems, for example, can provide a real-time view of stock levels across all channels, reducing the risk of stockouts or excess inventory. This integration can streamline operations, reduce costs, and ensure customers can always find the desired products.

Flexibility and scalability

With an omnichannel approach, businesses can quickly adapt to changes in consumer behavior or market conditions. The integrated nature of omnichannel systems means that companies can easily scale up or modify their operations across different channels to meet evolving customer needs or to capitalize on new market opportunities.

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Omnichannel retail challenges

While the omnichannel retail approach heralds a brave new world of shopping, seamlessly integrating multiple channels into a single, harmonious customer experience, it is not without its trials and tribulations.

Implementing an omnichannel strategy presents a myriad of challenges, each a hurdle that businesses must clear to provide that seamless shopping experience consumers now expect. Let’s dive into some of these challenges.

Data silos

One of the first obstacles many retailers face is the issue of data silos. In a multichannel environment, each channel might operate independently, collecting and storing customer data in isolation. Transitioning to an omnichannel approach requires breaking down these silos to create a unified, accessible database that provides a 360-degree view of the customer.

This integration is crucial for personalizing the shopping experience but can be a daunting task for businesses entrenched in legacy systems.

Technology integration

Hand in hand with the challenge of data silos is the broader issue of technology integration. An effective omnichannel strategy relies on the seamless interaction of various systems — from inventory management and CRM to e-commerce platforms and point-of-sale systems.

Achieving this level of integration often requires significant investment in new technologies and the overhaul of existing infrastructure, which can be both costly and complex.

Consistent brand experience

Maintaining a consistent brand experience across all channels is another major challenge. Customers expect to encounter the same brand identity, values, and level of service whether they’re shopping in-store, online, or through a mobile app.

Ensuring this consistency demands meticulous attention to detail and a coordinated effort across all departments, from marketing and sales to customer service and fulfillment.

Inventory management

Effective inventory management becomes exponentially more complex in an omnichannel environment. Retailers must be able to track and manage stock levels in real time across multiple locations and channels to fulfill customer orders efficiently and accurately.

This requires not only sophisticated inventory management systems but also a flexible supply chain that can adapt to fluctuating demand.

Customer service

Omnichannel retail elevates customer service expectations. Consumers anticipate seamless support throughout their shopping journey, regardless of the channel. Providing this level of service requires training customer service representatives to handle inquiries across multiple platforms and ensuring they have access to comprehensive customer data to offer personalized assistance.

Channel conflicts

Lastly, channel conflicts can arise when pricing, promotions, and product availability vary between channels. These discrepancies can frustrate customers and erode trust in the brand.

Harmonizing these elements across all channels is critical but can be challenging, especially for businesses that rely on different teams or partners to manage each channel.

Despite these challenges, the potential rewards of a successful omnichannel strategy — enhanced customer loyalty, increased sales, and a competitive edge — make it a worthwhile endeavor.

Addressing these hurdles requires a strategic approach, embracing technological innovation, and fostering a culture of adaptability and customer-centricity within the organization.

illustration small omnichannel order management v1 landing page

Manage your omnichannel retail business with Katana

The list of challenges presented above may seem daunting, but they are not insurmountable. Many of the challenges inherent in omnichannel retail can be significantly mitigated, if not outright overcome, with the implementation of an integrated inventory management platform.

Katana, a cloud-based inventory platform, offers retailers a centralized solution designed to streamline operations, enhance visibility, and foster the seamless integration of various channels. It does that by offering businesses:

Katana is tailored to address some of the most pressing issues faced by businesses striving to achieve omnichannel success. Request a demo today and see how it can elevate your omnichannel retail operations.

Omnichannel retail FAQs

What does omnichannel mean in retail?

In retail, omnichannel refers to a cohesive, integrated approach to sales that aims to provide customers with a seamless shopping experience across multiple channels, including physical stores, online websites, mobile apps, social media, and any other form of customer engagement.

This strategy acknowledges and addresses the modern consumer’s desire to switch between channels fluidly, ensuring that their experience is consistent and unified, regardless of how or where they choose to shop.

Omnichannel retailing focuses on integrating these various channels to offer a personalized and efficient shopping journey, enhancing customer satisfaction and loyalty.

What is an example of an omnichannel retail strategy?

An example of an omnichannel retail strategy is a clothing retailer that integrates its online store, mobile app, and physical locations to create a unified shopping experience.

For instance, a customer can browse products online, use the mobile app to check in-store availability, and choose to pick up the item in person with the option to try it on before finalizing the purchase. If the product isn’t the right fit, the customer can return it through any channel:

  • In-store
  • Via mail from an online request
  • Through a scheduled pickup from their home

Additionally, this retailer uses customer data from both online and offline interactions to send personalized recommendations and promotions via email, app notifications, and social media, ensuring a cohesive and customized shopping journey.

What are the elements of omnichannel retailing?

The elements of omnichannel retailing include:

  • Integration of channels — Seamless connectivity between various sales and communication platforms, including brick-and-mortar stores, e-commerce websites, mobile apps, social media, and customer service lines, allowing customers to move effortlessly between them.
  • Data and analytics — Leveraging customer data across all channels to gain insights into shopping behaviors and preferences, which can be used to personalize the shopping experience and make informed business decisions.
  • Consistent brand experience — Ensuring that the brand’s messaging, aesthetics, values, and quality of service are uniform across all channels to maintain trust and recognition with customers.
  • Customer-centric approach — Prioritizing the needs and preferences of the customer by offering flexible shopping options, personalized interactions, and responsive customer service.
  • Technology infrastructure — Utilizing advanced technology solutions, such as CRM systems, inventory management software, and digital marketing tools, to support the seamless execution of omnichannel strategies.
  • Employee training and empowerment — Equipping staff with the knowledge and tools to offer consistent and informed customer service across all touchpoints, both online and offline.

These elements work together to create a holistic, integrated shopping experience that meets the high expectations of today’s consumers, ultimately driving loyalty and sales for the retailer.

Sources

¹The State of Omnichannel Statistics 2023: Data & Trends, OnlineDasher (2023)
²The State of Omnichannel in 2023, Unity Group (2023)
³Ecommerce Statistics You Must Know (Chatbots, Voice, Omni-Channel Marketing), Kinsta (2023)
⁴11 Proven Methods to Increasing Omnichannel Customer Engagement, Moengage (2023)

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