Top 8 Tips on Building an Omnichannel Retail Strategy
Last Updated:  September 4, 2023
The present day customers are not only tech-savvy, but are also multi-channel consumers. While a majority of sales are still fulfilled in physical stores, online channels and social media have a huge impact on customer behaviour. This new class of empowered customers also seek highly personalized, consistent and holistic experiences across all channels. Retailers today should go beyond just the physical store or a pure online store in order to reach customers with the most impactful customer experiences at the right time and place.
In this post, we discuss in detail as to why omnichannel retail is becoming a reality and how retailers (both online and physical stores) can leverage various technologies and techniques in order to build a successful omnichannel retail experience.
Why retailers should go omnichannel
1. Shoppers prefer multi-channel experiences
Spurred by smartphones and the on-demand economy, customers today are demanding an ‘always on’ shopping experience. Not only should such experiences be easily accessible, they should also deliver optimal product assortments and flexible fulfillment options, on all channels. Although the internet has opened numerous opportunities for online shopping, a majority of sales still happen in physical stores. However, a key difference in customer behaviour today is that customers are better informed and leverage online platforms even when considering and completing purchases at physical stores. Hence, physical stores have to find channels to reach and connect with customers on online platforms.
2. Influence of Social Media
Social media is pitted to be one of the strongest influences in today’s retail space (both online and physical stores). Customers today not only seek multiple channels to shop, but also value product reviews and feedback on social media platforms. For instance, when customers visit Apple’s App Store, they would not purchase products that have only one star. Social media review platforms have a have huge impact on brand loyalty and bad/poor reviews could lead to long lasting negative effects on retailers. A well planned omnichannel strategy will seamlessly integrate social media and commerce in order to ensure retail success.
3. Strong correlation between physical stores and online stores
Many stores have observed that there is a strong correlation between the brand’s physical and online stores. For instance, at a recent conference, Macy’s noted that when they close a physical store, their online business from that area drops as well. This can be attributed in part to customers’ shopping behaviour. Customers today demand easy transitions between physical and online stores. For example, a customer might buy the product online, but return the product in the physical store or vice-versa. Thus, retailers might lose out on valuable customer segments if they do not adopt an omnichannel approach.
How to build an omnichannel strategy
With the emergence of omnichannel retail, brands and businesses have to re-visit their strategies in order to meet the requirements of today’s empowered customers and reach them with the most enticing, seamless, consistent and contextual experiences across all channels.
1. Map customer purchase behaviour
Customer behaviour and customer journeys in the omnichannel space is relatively more complex. With several influencing factors, purchases can be made at any time of the day or night, either directly at physical stores, or at online stores. This requires businesses to develop sound omnichannel strategies that takes into consideration the different customer paths and influencers across all channels. Understanding the customer decision making process is key to developing an omnichannel strategy. A few key considerations to map customer purchase behaviour in the omnichannel retail space are as follows:
– Where are the purchases made? – In the store/while commuting/at home etc.
– When are the purchases made? – In the morning/at noon/at night etc
– What kind of products are purchased/are more popular – home decor/women’s wear/groceries etc
– What is the frequency of purchases? – everyday/once a week/once a quarter etc
– How are purchases made? – smartphone/tablet/direct cash payment at the store etc
Gathering insights around such important questions will help retailers to clearly map out customer journeys in order to fully understand their preferences and needs and deliver the most relevant experience at the right time. In order to fulfill such experiences, physical stores can leverage technologies such as iBeacon, that provide an excellent way to deliver personalized, contextual and hyper-local experiences to customers on their smartphones while in the store, while gathering significant customer data
2. Boost customer engagement
After understanding customer behaviour (from the questions in the previous section), retailers should chalk out detailed customer route maps in order to set up relevant triggers across channels. The aim of such triggers should be to maximize customer engagement and drive purchases. A few examples of customer triggers that can be used are as follows:
– Organise events and offer sales – Events and sales have a good customer recall and can be used to remind customers to make purchases. This also acts as a shopping goal.
– Send proximity notifications – Retailers can send highly tailored notifications based on customers’ location in the store. Such notification can prove to be very relevant and lead to higher conversions.
– Send reminder about offers/discounts – Notices regarding a special discount or the number of accumulated loyalty points can act as a good trigger for making purchases.
– Initiate conversation – Retailers and brands can engage in active dialogue on social media platforms in order to boost brand value
Effectively using triggers can help brands to not only drive customer engagement but build sustainable brand value.
In addition to analysing customer behaviour and setting up appropriate triggers, retailers and brands should leverage innovative new technologies like VR (virtual reality) and iBeacon among others in order to bridge the gap between the physical and online worlds and deliver seamless and consistent customer experiences. We have discussed some of the best approaches to build an omnichannel experience in the following sections.
How physical stores can build omnichannel experiences
1. Create fulfilling store experiences
Physical stores can help in creating fulfilling omnichannel experiences, by also acting as fulfillment centres for the stores’ online counterparts. Services like ‘click and collect’ (buy online pick up in-store), in-store return for online purchases, allowing store customers to digitally check store inventory and running targeted promotions based on online behaviour are some of the ways to deliver value to both online as well as in-store customers.
In order to deliver such smooth and seamless experiences, physical stores will have to invest in connected technologies. For instance, retail stores can easily deliver ‘click and collect’ facilities to online shoppers using beacons. We have discussed how retailers can deploy beacons to deliver this solution in our earlier blogs.
In an interesting example of ‘click and collect’, supermarket chain, Woolworths, has installed beacons at all of its supermarkets in order to reduce the time and effort lost by customers while waiting in line to collect their online orders. In this case, beacons present a clear channel of communication between the store staff and customers, in order to improve the overall efficiency of the experience.
2. Present virtual viewpoints
Technologies like AR (augmented reality) and VR (virtual reality) can be leveraged by stores in order to deliver enhanced, virtual experiences that can help customers experience environments that cannot be fulfilled by stores.
Such virtual technologies allow retailers to present very interesting virtual experiences like a virtual endless aisle that displays a wide assortment of products (that are not available at the store), or a virtual mirror that allows customers to virtually try on clothes or products.
An interesting deployment of VR can be seen at the home improvement store, Lowe’s. Using the Oculus Rift Virtual Reality headset, customers can personalize individual room sizes, equipment, colors and finishings at the store’s simulated space – Holoroom
3. Provide valuable services
Customers today are highly informed and seek the best experience on any platform. Physical stores can amp up the customer experience they deliver by providing valuable information and services. For instance, using an audio calling platform or two-way communication technologies like Facetime or Skype can be used by retailers to allow customers to connect with product experts on in-store terminals or kiosk solutions.
4. Integrate social media with in-store experience
In-store experiences can also be enhanced by integrating with social media platforms. Retailers can have screens or walls that relay live social media feed or commentary. This can also include images, tweets and videos in order to drive customer engagement. Dressing rooms can have displays that allow customers to obtain real-time product reviews from social media platforms on the products they intend to buy.
Such integrations will also help store staff to monitor in-store social commentary and respond in real time.
5. Have a unified loyalty program
Having a loyalty program that integrates customer journeys across online and physical platforms is a great way to integrate and boost customer engagement. Rewarding customers even for their online involvement can prove to be an effective way to grow the online customer base. An interesting example of this can be seen at the popular clothing chain, Marks & Spencer. The store’s customer-focused loyalty program, Sparks offers customers rewards for interacting with the brand online or in-store. Once customers collect their “Sparks”, they can use them for a wide range of benefits.
A good way to implement an omnichannel loyalty program is by leveraging iBeacon technology. Beacons provide an effective way to seamlessly tie together customer journeys across all channels and provide hyper-local and data driven loyalty experiences. Retailers can also gather a wealth of data around customer behaviour and preferences using beacons. Some of the key loyalty metrics that can be captured using beacons are visit frequency, repeat visitors, retention and cross-store visits.
6. Send in-store notifications based on online browsing history
The data and insights gathered from customer paths in the online world (website and app) can be used to trigger personalised and contextual notifications when customers are in-store. A good example of this can be seen at luxury retail chain, Barneys New York. The store uses beacons to send personalised notifications and product recommendations to customers. The notifications are based on the products in the customers’ mobile shopping bags, wish lists and customers browsing patterns within the store’s online publication – The Window.
How online stores can build omnichannel experiences
1. Build physical experience zones
Online-only stores will lose out on a chunk of customers, if they do not have a presence in the physical world. Even today, customers are motivated by touch and feel and a majority of retail sales happen in physical stores. A good way to overcome this problem without actually opening a physical store (and re-aligning business processes) is to have physical experience zones. Such experience zones are a great way for customers to experience products and build confidence before making purchases. This approach also saves online retailers from the hassle of product returns due to mismatch in product expectations.
Recently, the popular Indian fashion portal Abof.com (promoted by the Aditya Birla group), opened its first experience zone in Bangalore. With the experience zone, customers can review Abof’s collections, browse the online website, and get style tips. Such initiatives can prove to be a great step towards building trust and brand loyalty for online businesses.
2. Enable customer interaction through online chats
Online stores should strive to make the customer experience as personalised as the in-store experience. A good way to achieve this, is by integrating interactive live chat platforms that allow customers to connect with product experts or sales executives directly from the website or app. Incorporating such interaction platforms is great way to understand customer behaviour, address customer pain points and drive sales.
In a recent example, the popular toy store , Toys “R” Us integrated an online chat software into their online store so as to allow online customers to connect with the brand’s local store in order to provide a more personalized experience. Such solutions also allow retailers to leverage the in-store associates’ strength of service and sales skills across all channels.
The omnichannel retail revolution is just getting started and retailers are realizing that they can no longer function in silos, and the convergence of digital and physical commerce will soon become a retail norm. In order to stay ahead of the curve, retailers will have to leverage new technologies and realign processes in order to create impactful and valuable retail experiences.
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