As digital platforms evolved, so did the retail sector. Nowadays, the traditional business model wherein retailers sold their products and services solely from brick and mortar stores has become outdated. Most of the time, if a retail business has a physical store, their presence likely extends to the internet and social media.
Internationally, e-commerce giants such as Amazon and Walmart dominate the market, while in Southeast Asia, sites such as Shopee and Lazada have become extremely popular among consumers. In fact, Shopee and Lazada ranked tenth and thirteenth, respectively, on Similarweb’s ranking of the most visited websites in the Philippines based on site traffic between December 2021 and November 2022. On top of this, they are the third and fourth most used applications in terms of monthly active users between January and December 2022, according to analytics company DataReportal’s Digital 2023 report on the Philippines.
Consumer behavior shifted alongside these trends. After all, if consumers can get the same products at a fraction of the price without needing to go to physical stores, why wouldn’t they? For these reasons, businesses needed to adapt, and from this necessity, omnichannel retail strategies picked up some momentum.
What is omnichannel, anyway?
If you’ve heard of omnichannel, you’ve probably heard of the term “multichannel” as well. Although they have their similarities, it’s best not to use them interchangeably. Simply put, a multichannel approach means selling products or services through multiple channels, whereas an omnichannel strategy involves providing a seamless shopping experience across all of those channels, according to top e-commerce platform Shopify. The difference lies in the idea that merely selling products from multiple channels is different from creating a consistent experience for your consumers regardless of how they interact with your business.
Think of businesses like Starbucks. Whenever you make a purchase, they offer you a free rewards card that can collect “stars,” which you can use later on to redeem rewards such as free food or drinks. Using their app or website, you can track your progress towards freebies, top-up your card with some money, and even pay for your order. Of course, you can also do all of these things in-store, but having the option to do them from any channel is what makes the process much more seamless. Starbucks understands that the mobile and internet experience has become extremely important for consumers, so they made sure that their app and website are as stable as possible. This is a good example of what omnichannel is all about.
How an omnichannel retail strategy drives more sales
Meeting your customers where they are–that’s the philosophy that omnichannel is founded on. While it’s true that physical stores are still an important aspect of retail, offering your customers the convenience of being able to browse through your products and services from anywhere at any time has become just as vital. Doing so allows your customers to do a variety of things. For example, they can check out a product’s specifications from your site and purchase it in-store, or perhaps place an order online and just have the item delivered to their doorstep. This opens more opportunities for brands to up their revenue.
A report from IDC Retail Insights helps paint a picture of omnichannel’s benefits. According to their study, retailers who use omnichannel marketing strategies see a 15 to 35 percent increase in average transaction size, a 5 to 10 percent increase in loyal customers’ profitability, and a 30% higher lifetime value than those who shop using only one channel. Since customer lifetime value or CLV refers to the potential net profit a company can potentially generate from a customer, this is to say that an omnichannel strategy encourages customers to spend more per transaction and come back for more.
The sheer benefit that cross-channel consistency provides similarly cannot be understated. When potential customers can recall your brand’s image across various channels, it could make them more likely to trust your brand and eventually make a purchase. And, since omnichannel involves using digital platforms, it opens the door to a whole new world of possibilities.
In the digital world, you can track metrics that you usually can’t physically measure. Having a website, app, or social media page, for example, will let you track impressions, clicks, and other valuable insights–all of which could help you plan future omnichannel marketing campaigns. These campaigns will lead you to more opportunities as well: say, for example, email and SMS marketing once you manage to implement a system to collect customers’ phone numbers and email addresses. But when you do get to that point, don’t forget that consent is at the heart of such marketing campaigns. If you end up sending marketing texts and emails to unconsenting customers, you will face repercussions instead of benefits.
Take note that omnichannel is no foolproof strategy to boost sales. It has to be done properly in order to be effective. Here are some ways for you to start planning an omnichannel marketing strategy tailored to your retail business.
How to start planning an omnichannel retail strategy
Since you will be going omnichannel primarily to enhance the customer experience and generate more leads, the first step is to understand your target audience and their preferred platforms. You wouldn’t want to create a mobile app for customers who prefer browsing the web through their computers, for example, so getting this information is crucial to any omnichannel strategy.
A good way to do this is to start giving out surveys to customers in your physical store and incentivize them for answering. In exchange for their responses, you can run a raffle and give them a chance to win some prizes, or give them freebies or small discounts. The possibilities are endless, but the point is: do everything you can to get that information from your customers.
Once you know which channels to target, it’s time to look for a technology partner that can help you with implementation. There are plenty of companies out there who specialize in omnichannel retail that can provide solutions for you, but of course, finding the right partner that understands you and your needs can take a lot of time. After all, the people who will integrate the technology to your business are as vital as the technology itself.
Another important step is training your employees to maintain consistency across the channels you’ll be utilizing and make sure that they’re up to date with your plans. At the end of the day, your employees will be the face of your company, so it is critical that they themselves are aware of the strategy. For example, if your website has a page for Frequently Asked Questions or FAQs about your channels, your employees should have identical answers when the same questions are asked of them in-store. Otherwise, there will be confusion among your customers.
Feedback matters in omnichannel retail strategy
Just like with all strategies, you can do as much research and planning as possible and still face some challenges along the way. This is why going omnichannel is also a commitment to constantly understanding customer needs and preferences. If you published a website, ask your site visitors for feedback on what they liked and didn’t like about it; if you released an app, ask those who downloaded it about their user experience; if you started social media pages, always check your analytics and see where you can improve and do some social listening on the side. Utilize all the channels you have to gather feedback to further improve your omnichannel retail strategy–in the long run, you will be able to achieve the perfect formula that fits your retail business best.
The future is omnichannel
Wunderman Thompson’s The Future Shopper Report 2023 predicts that around 64% of spending will be online by 2033. In addition, it found that 56% of consumers said that they want seamless communication across brands’ physical and digital channels and the ability to move between them, while 60% said that they prefer to shop with brands that have both physical and digital stores. As they wrote in their report, “The customer journey is omni-channel and seamless, albeit first and foremost a digital one.”
For businesses to stay competitive in today’s retail landscape, it seems that an omnichannel strategy is becoming a necessity. As we talked about in this article, there are many ways in which multiple channels seamlessly integrated with one another can help you drive more sales. Gone are the days wherein consumers only ever consulted physical stores for their purchase decisions; now, they browse reviews online and seek recommendations on social media, and therefore expect you to meet them across all of these touchpoints.
With a myriad of options available to consumers through their mobile devices, consumers are starting to demand flexibility, convenience, and personalization. An omnichannel retail strategy can help you meet these expectations and ensure that you can meet your customers wherever they are in the buyer’s journey. After all, it’s not just about keeping up with your competitors through the latest trends, but about securing a place in the future of retail.
