Introduction
The retail landscape has transformed significantly over the past decade with the rise of e-commerce and smartphones. Customers now demand seamless shopping experiences across different channels- whether online or in-store. To keep up with evolving consumer behaviors and remain relevant, retailers are adopting an omnichannel approach that provides continuity across channels. This article discusses how omnichannel retailing is shaping the future of customer shopping experience.
What is Omnichannel Retailing?
Omnichannel retailing refers to a retail strategy that provides customers a seamless shopping experience across different channels- online, mobile, social media, physical stores, etc. It aims to create a unified shopping journey for customers by enabling fluid movement between channels. For example, a customer can browse products and read reviews online, check in-store availability on their mobile, and pick up the purchase from the nearest store.
The key aspects of an omnichannel strategy include:
– Integrated inventory visibility: Customers can see real-time stock availability across all channels from any device.
– Order online for in-store/curbside pickup: Customers can order online and pick up from the store within hours.
– Buy online and return in-store: Convenient returns eliminate shipping hassles for the customer.
– Purchase continuity across devices: Customers can start searches/purchases on one device and continue on another seamlessly.
Benefits to Customers
Omnichannel retailing provides several compelling benefits and enhanced experiences to today’s connected customers:
– Convenience: Customers have the flexibility to shop anytime, anywhere and fulfill purchases based on their preferences.
– Personalization: With access to customer data across channels, retailers can deliver hyper-personalized shopping experiences and recommendations.
– Immediate gratification: Customers want the ability to browse virtually and fulfill purchases instantly in-store or receive them quickly at home.
Benefits to Retailers
For retailers, an omnichannel strategy boosts sales and customer retention in the following ways:
– Increased basket size: Customers who click and collect or try online then buy in-store spend up to 30% more on average.
– Higher conversion rates: Customers are 6.4 times more likely to complete a purchase when they can easily move between channels.
– Greater customer loyalty: 90% of omnichannel shoppers say they will continue buying from the retailer.
– Lower costs: Click and collect orders see 40% lower fulfillment and return processing costs vs shipped orders.
Omnichannel in Action
Several leading retailers have successfully implemented omnichannel strategies to elevate the shopping experience. Some examples include:
Nike: The sportswear giant allows members to reserve products online for pick up in selected Nike stores within 2 hours. Nike offers BOPIS (buy online, pick up in store), curbside pickup, scheduled locker pickup and ship-from-store returns.
Target: The big box retailer enables same-day pickup and delivery of online orders placed in the morning. Customers can also return online purchases at any Target store location and enjoy flexible payment options like store credit, gift cards and RedCard discounts.
IKEA: The furniture brand rolled out a digital meeting place called ‘Planning Studio’ that lets customers design, configure and visualize products online before visiting stores. In-store associates can then access the online designs/configurations to provide a seamless experience.
Challenges to Overcome
While omnichannel offers immense opportunities, retailers also face certain challenges in building an integrated multichannel experience, including:
– Legacy technology infrastructure: Many retailers struggle to modernize aging technologies hindering seamless data and order flow across channels.
– Synchronizing inventory: Maintaining real-time visibility and availability updates across channels requires robust inventory management capabilities.
– First-party customer data: Building a unified customer profile requires aggregating data consistently captured by the retailer first-hand versus third parties.
– Fulfillment complexities: Managing reverse logistics like returns arising from a “buy anywhere, return anywhere” policy adds to fulfillment complexities and costs.
– Budget and resource constraints: Transitioning to an omnichannel model demands investments in technology, talent, infrastructure and skills – which many small-to-mid sized businesses struggle with.
The Road Ahead
As customer shopping habits continue evolving at a rapid pace amid high smartphone and internet penetration globally, omnichannel retailing will become increasingly vital for business success. Industry experts estimate over 80% of retailers will adopt an integrated omnichannel strategy by 2025. Retailers need to establish foundational capabilities for a scalable omnichannel strategy at the earliest to remain competitive in the years ahead. Those falling behind risk steadily losing market share in a hyper-connected shopping era.
Conclusion
In summary, omnichannel revolutionizes the shopping experience by enabling a seamless journey for customers across online and in-store. While challenging to build and maintain, an omnichannel strategy is critical for retailers to deepen customer loyalty and brand relevance considering evolving consumer demands. Done right, it holds immense upsell potential while boosting overall sales and profitability. The future of retailing certainly belongs to those retailers that can consistently deliver immersive omnichannel experiences to empowered customers.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it