Omnichannel retail is the term used to describe the merging of e-commerce and brick-and-mortar retail. Otherwise put, it's the coming together of online and in-store shopping.
This transformation has enabled retailers to provide a seamless shopping experience to their customers no matter where their customers choose to engage: website, desktop application, mobile app, social media channel, or physical store.
Omnichannel retail is an integrated approach to retail that creates a unified and seamless experience across all digital and physical touchpoints in the customer journey. It means customers shopping from anywhere and everywhere, with the same consistent experience.
The term is also called omnichannel commerce. "Omni" means all and channel refers to the different ways customers can shop your products: website, mobile device app or website, SMS, desktop app, or brick-and-mortar.
With better integration among all those channels, companies can offer one tailored customer experience.
Here’s an example of omnichannel in action. You stayed up late last night looking at the latest kitchen gadgets, and forgot you left one in your online shopping cart. That retailer can alert you via email or text about that unpurchased gadget. They can reformat their next periodic ad to you so it includes more kitchen items. You may even see ads for that specific item start to appear when you’re browsing other websites.
If you want to check out the gadget in person, you can tell which store has it in stock. And once you’re there, scanning a barcode brings up reviews for that product, as well as similar items.
These multiple channels – the website, the email, the text, targeted ads, inventory checks, and item reviews and recommendations – work together to give you a personalized customer journey.
According to the Harvard Business Review, 73% of retail customers already navigate more than one channel while shopping. These omnichannel shoppers also spent roughly 10% more online and 4% more in stores than single-channel shoppers. These shoppers also spent more for every channel of a business they used, stressing the importance of a well-crafted omnichannel experience.
Since omnichannel is a form of multichannel, it’s important to differentiate them. Because while all omnichannel retail is by definition multichannel, not all multichannel is omnichannel.
Let’s start with single-channel retail. A business using this method uses one channel to reach its customers. These retailers may have smaller businesses, like a crafter with a page on Etsy. Or they might have very targeted audiences, like retailers who sell exclusively on Amazon, and who only need to target Amazon shoppers.
A multichannel retailer uses more than one channel to reach its customers. Most businesses fall into this category. Channel options include customary options like physical locations, websites, social media, emails, or a blog. Options used less frequently include eCommerce sites, loyalty programs, mobile apps, and texts.
An example of a multichannel retailer is your bank. You can visit it in person, but you can also scan a check on your phone to deposit it into your account. You can receive texts if an account runs too low. You can pay bills through its website. And so on.
Omnichannel retail also uses multiple options to reach its customers, which is why it is a type of multichannel retail. The key difference is how integrated a retailer’s channels are. This strategy ensures all those channels work together.
With those different channels differentiated, we can go into the key differences between omnichannel and multichannel retail. Those differences are:
In a multichannel approach, each channel operates in a separate silo, with its own targets, goals, and metrics. Multichannel targets customers across different touchpoints (i.e., in-store, website, SMS), but these teams operate separately from one another and may provide a disjointed customer experience with inconsistent messaging.
The personalized, omnichannel customer experience is the clear winner.
In a multichannel approach, each channel operates independently, with little or no integration among them. In contrast, an omnichannel approach requires tight integration among channels to share data, coordinate messaging, and ensure consistent branding.
Rather than working to achieve competing aims (in some cases in actual, direct competition among work departments with prizes and incentives), marketing teams and other departments work together more collaboratively.
Additionally, fewer resources (headcount) may be needed for an omnichannel approach. For example, there's just one copywriter or team of copywriters deciding on one message that gets deployed across different channels. You don't need multiple teams of writers coming up with multiple campaigns. One team can do the work of two or more, tweaking the wording for different channel formats as needed.
In a multichannel approach, the focus is more volume-driven. Reach as many customers as possible within one particular channel (i.e., mobile app). There can be a competitive aspect with a channel team's desire to outperform other channels like website or email marketing.
In contrast, an omnichannel approach focuses on providing one customer-centric experience, with the goal of building long-term relationships and loyalty. This means that an omnichannel approach is more concerned with meeting the needs of the customer than with the individual performance of one channel itself.
Sometimes a company’s multiple channels are kept separate, or siloed. Imagine, in our recurring example above about kitchen gadgets, that the website was siloed from the company’s other channels. The website wouldn’t communicate with the other channels (and other digital marketing teams) about the item in your cart. That would mean no updates to the periodic ad, no targeted ads, no text reminders, and no similar product recommendations.
Worse than this lost opportunity is the disjointed message conveyed to your customer due to siloed channels.
Here are some other common drawbacks:
All these instances could be solved if the different marketing channels and departments weren’t siloed. These situations may seem like small inconveniences, but all contribute to painting that business in a negative light. Customers today expect an omnichannel experience. They might not know what it's called, but customers know the experience they want.
"If I had asked people what they wanted, they would have said faster horses."
Henry Ford
And while omni means all, an effective omnichannel strategy doesn’t mean you have to employ every single option available. Instead of “all the channels,” think of omnichannel as “all your relevant channels working together” to a consistent brand experience.
An omnichannel approach to retail offers four distinct benefits to businesses.
Retailers can grow loyalty with this increased integration, partly due to meeting or exceeding their customers’ expectations. They’ll be able to better address mobile shopping needs, speed up response times, and improve customer engagement overall. They’ll also be able to integrate with external commerce areas, such as Amazon and eBay.
Omnichannel also provides retailers with lots and lots of customer data. All their channels – websites, social media, point of sale (POS systems), referral programs, and more – are now combined. This provides a more holistic view of each customer. Retailers better know which items they want, which items they already have, and how they shop.
Customers experience a smoother, more engaging shopping experience. They can interact with customer service in real-time to get their questions answered. Many companies are working to improve AI bots as personal shoppers or customer service reps as well. Improved AI means the bots can better guess intent and assist customers.
Customers can also shop how they want with omnichannel shopping, whether it’s shopping online, in the store, or a combination. They can also choose their point of sale: buy in the store, buy online and pick up in-store, or have an item delivered.
Omnichannel retail also means omnichannel marketing, which provides smoother communications to customers. As discussed above, the omnichannel experience provides consistent messaging. Customers can customize and specify their topics of interest, frequency of mailed ads, and more.
Implementing a successful omnichannel strategy is a large undertaking, both in cost and complexity. These two hurdles almost always mean that going to omnichannel will be long and challenging.
Another hurdle is making sure all parts of your business use the same software and systems. Some companies have customized legacy systems for certain operations (such as POS software) or have standalone stores that run on a different system. Further, implementing omnichannel includes connecting back channels that customers don’t regularly see, such as supply-chain logistics.
So before you rush to implement, decide what your customers want out of your business. How do they shop? What sales channels do they prefer to use? Your customer demographics may help answer this question. For instance, different age groups have different shopping habits to accommodate for. Answering these questions should help you determine whether to make the leap.
If you decide to take the leap (you know that you have to do it at some point and it will only get more costly and more complex as time goes on), the next step is to make sure you have internal buy-in.
Related: How to Get Everyone On Board With Your Digital Transformation
As mentioned earlier, some stores or departments may have unique systems or processes they’re loath to give up. Some departments may not want to share information with perceived internal competition, such as Inside Sales vs Outside Sales. Make sure you have a plan to address these disparities before continuing.
Finally, shop around to find the right omnichannel solution for you. Assess your company’s needs – including cost, of course, but also customer base, what channels you need to integrate and your marketing strategy.
Epicor is known for ease of use, powerful integration, and the ability to be a one-source solution for businesses instead of having to use multiple vendors.
Businesses consistently praise the company for the smooth transition to Epicor omnichannel software and marketing solutions, with increased bottom line and little to no business disruption.
"In less than 14 days, we added an [Epicor] eCommerce solution that is adding tremendous value to our business, 24 hours a day, without disrupting our retail flow. ”
Scott Gescheider, CEO of Moana Nursery
Omnichannel retail is a powerful tool to provide a unified customer outreach. Implemented well, it should help both your customers and your company grow.
