Omnichannel retail: definitions, trends, and strategies to enhance your customer journey

Abstract illustration of a Omnichannel retail: definitions, trends and strategies
Phoebe Lown
Phoebe Lown

Content Writer

Omnichannel is a word that’s thrown around a lot. Every retailer knows that the key to success is to have an omnichannel strategy defined and implemented. But it can be hard to know where to start, what products you need to scout, and what resources you’ll need.

In this article, we’ll dive into why having an omnichannel customer experience is worth the resources. Plus, what strategies you can use to create a top-notch journey for your customers.

First things first. What is omnichannel retailing?

Omnichannel retail, also known is as omnichannel commerce is the process of unifying your sales channels under one umbrella. Most retailers choose to do this because it provides a seamless customer experience, no matter what channel they are shopping on, it could be in-store, mobile device, or desktop - the list will only continue to grow.

Omnichannel differs from a multichannel approach in a sense that it acknowledges that mobile and social media help customers to quickly switch between channels and use channels these simultaneously in their purchasing decision. For example, a customer may read a review on their mobile device while checking out a product on a physical retail store shelf.

The critical point is that whatever touchpoints shoppers are coming across – the experience must remain the same and work in synergy.

The customer journey is long, involving many touchpoints. By having an omnichannel retail strategy in place, you’ll put the focus on the entire customer journey, across every channel - and make the journey seamless.

illustration of a mobile with a hand slecting an item in a webshop.

Why is omnichannel retailing important?

Simply put, omnichannel ingrains the customer into the heart of the story. Only selling products on multiple channels won’t create a true omnichannel experience. Retailers need to understand that their customers will have different preferences for how they want to discover and buy products.

By having an omnichannel strategy in place, it empowers users to personalize their own experience. The customer has the control to access the products, services, and support options on demand.

So, instead of putting all your customers into a silo, by taking an approach where all channels and touch points are unified, the customer can interact with your brand and products in whichever way they want. Which is ultimately a true path to increasing your conversion rates. According to Entrepreneur, omnichannel customers spend 4% more in-store and 10% more online than single-channel customers.

While it may seem like creating an omnichannel shopping experience is an unobtainable dream, retailers should be wary about dismissing it.

With the pandemic driving the current climate, customers have become more inclined to change their shopping habits and try new methods of purchasing such as Click and Collect. To find out the true impact that COVID-19 is having on consumer buying behavior, we ran a survey. The results were pretty staggering, with 44% of respondents predict that their buying habits won’t change post-COVID-19.

As the pandemic causing a shift towards ecommerce, retailers will need to ensure that the customer experiences are adequately met or risk losing out on footfall when consumers eventually head back to instore shopping. For example companies with robust omnichannel engagement strategies retain 89% of their customers on average, compared with a retention rate of just 33% for those with weaker or non-existent strategies.

However, the shift towards omnichannel experiences was always going to inevitable despite the pandemic. As the spending power of Millennials and Generation Z continues to grow, they’re quickly cementing their place as the dominant consumer groups. Having grown up with technology, both groups have a digital first mentally, with over 60% of them using social media messaging such as Facebook Messenger and WhatsApp to engage with brands for customer service issues or to discover new products.

So, in a nutshell, consumers simply want a more engaging and streamline experience when they interact with their favorite brands. Those brands that can offer up seamless experiences, will be rewarded with more engagement, revenue, and loyalty.

Omnichannel retail trends

In this chapter, we’ll explore which omnichannel retail trends are emerging throughout the COVID-19 pandemic and which of those trends are set to stay with us.

Shoppable social will increase consumer engagement

From working, connecting with loved ones, shopping, and checking the news – the World Wide Web has helped most of us weather the COVID-19 storm. A study by McKinsey found that 10 years of normal e-commerce adoption were condensed into 3 months in 2020 with the most exciting developments being driven by social media. In May 2020, Facebook launched Facebook Shops, a feature that blends e-commerce with the world’s biggest social media platforms, now has over one million active e-commerce outlets.

Social commerce is set to drive the future of e-commerce. The main advantages include an easy buying experience for customers and the ability for retailers to market targeted ads to users to increase retention.

And shoppers seem to love it! A third of consumers globally have purchased on a social media platform: with that proportion reaching 43% for 18–24-year-olds and 47% for 25–34-year-olds. A study from eMarketer, also found that by tagging the product on the social media post, 38% of shoppers were more likely to click and buy directly from that post.

Of course, for retailers, having a social media presence is a given. However, retailers will need to double down on their social media strategy to promote personalized offers, grow their communities and ensure that social media is in the foundation of their omnichannel strategy.

illustration of an omnichannel integration on a mobile phone.
Conversational commerce finds its voice

We’re also seeing more investment into conversational commerce technologies, such as chat bots, voice assistance and chatting with brands via messaging apps like WhatsApp. Although the concept is hardly new, conversational commerce is seeing a pandemic driven surge as a result from more consumers purchasing online.

A survey commissioned by Facebook found that over 58% of respondents felt more confident messaging a business, rather than calling or filling out a contact form online when asking order related questions. But conversational commerce isn’t just for solving customer queries. According to a research report by Numa, an AI phone and virtual answering service, with 98% of all text messages opened and 95% responded to within 3 minutes of being delivered, texting is one of the easiest and most immediate ways for businesses to strengthen consumer relationships—even from afar. In fact, the study also reports 393% increase in contactless, text-to-order revenue.

With the pandemic having a significant impact on in-store retail, effectively reducing human interaction, investing in a conversational e-commerce strategy alongside new omnichannel models will become even more important for retailers.

illustration of a customer service representative with a headset and chat dialog bubbles
Frictionless payments to drive footfall

In-store retailers will have to face the likelihood that consumer footfall won’t return to pre-pandemic levels due to changing consumer shopping behavior. Which means providing convenient experiences beyond just offering discounts and customer service in-store.

What’s cool is that the more retailers will invest in futuristic technologies, such as queue less checkouts, invisible payments, augmented reality shopping and the introduction of new instore payment methods such as cryptocurrency wallets. Invisible payments are often crowned the ‘future of in-store retail’, a title justly earned. Invisible payments drive seamless checkout experience via technology innovations including AI-driven automation and mobile wallet payments and are considered the bedrock of retailers omnichannel strategy.

With the hype surrounding invisible payments has put the microscope on concepts like queue less checkout apps and Amazon Go stores – which eliminates the need for any checkout and reduced staff. Queue less checkout stores and other mobile Scan & Go apps are gaining scale in Northern European markets, however, the rate is expensive and slow, limiting the tech to large volume retailers, as smaller retailers are unlikely to see a return.

That said, for retailers these technologies have one commonality – frictionless experiences. Merchants need to view invisible payments and other in-store technologies digital experience enablers within a physical store environment, just like they do with their online checkouts. With technology becoming more accessible to retailers, in-store pain points can be massively reduced and positively answer the challenge of bringing customers back to the store.

illustration of a credit card being scanned at checkout.
Enhanced mobile experiences to drive loyalty

To increase consumer loyalty, brands such as Starbucks are embracing mobile apps into their omnichannel strategy. The app helps customers make an order on their phone and then collect it in-store. It’s a pretty smart initiative, its convenient for customers as they don’t have to wait in in line to pick up their morning coffee.

But it also increases engagement and keeps customers coming back for more! The app also offers a rewards program to offer personalized offers and promotions to its users. Partnering incentive and convenience is paying off! Over 48% of smartphone owners said that the Starbucks app is their favorite restaurant loyalty rewards app.

The flexibility that mobile devices offer is crucial for retailers during the COVID-19 pandemic. Mobile devices enabled retailers to quickly offer click and collect options, using mobile devices to pick and pack, and then again to manage queues and retrieve orders.

One great example is from fashion retailer Lacoste, who responded to government measures with a “Street & Collect” initiative. The initiative enhanced allowed shoppers to place orders via Lacoste’s website or by scanning a QR code affixed to each store’s front window. That scan gives customers access to in-store inventory so they can place an order that is then delivered to them on the sidewalk. Talk about convenient.

Integrating a seamless omnichannel retail strategy

Creating a seamless omnichannel retail strategy is no mean feat. It involves digging deep into which platforms, mediums, devices your customers are using every day and unifying them into your customer journey.

Offering a personal, convenient, and normal shopping experience across all your channels; are the pillars that will prop up your strategy. Here’s how to achieve that:

1. Segment your audiences and create personas

First things first, this is the part where you dive into your data to see how each segment of your audience is interacting with your brand. Demographics can include:

  • Income rage
  • Geographic location
  • Age range
  • Online behavior
  • Values
  • Previous marketing interactions

Once you’ve found who is buying what, how they’re buying it and where they are buying from, you need to work with your marketing team to create buyer personas.

By creating buying personas, you’ll be put into a position to think beyond your classic customer, to come up with a diverse and inclusive collection of insights into who is buying from you and who you want to buy from you. Research is the key element here.

The more you know about your customers, such as their motivations and frustrations, the easier it is to create a seamless journey. We also recommend interviewing customers to support your personas.

2. Map the customer journey of each segment

Steve Jobs said, “you’ve got to start with the customer experience and work back toward the technology.” By mapping the customer journey you’ll find which touchpoints are resonating or, even missing, with each segment and the channels you’ll need to prioritise.

First, map the phases each of your segments go through during in their intent to buy and then map the touch points. You can then cross-examine these touchpoints with your data to understand which channels are performing best.

3. Prioritise each channel and device

To be clear, implementing an omnichannel retail strategy doesn’t mean that you need to include every single channel that is available to you. The strategy is about ensuring that the channels that matter to your customers are done well. If we look back at the Starbucks loyalty app example, to appeal to younger audience who have gone mobile, Starbucks has improved their customer journey, engagement, and revenue, all with one channel. Starbucks is also able to offer a personal experience for every single customer on a channel that’s familiar to them.

You don’t have to go about investing millions into a mobile app if there isn’t a need for it. If you see that your customers want more from the in-store experience such as checking product reviews or stock levels on the go, then finding solutions to digitalize the in-store experience is a must.

4. Invest in cross-channel customer support

How many times have you put off calling a business because you don’t want to spend time in lengthy ‘your call is important to us’ queues as they have no customer support on social media or via Live Chat. Being present for your customers on the channels that is most convenient for them is crucial is if you’re going to be active on multiple channels. Plus providing an enhanced customer experience will increase loyalty, we all remember the brands that have gone above and beyond to turn a negative experience around!

5. Integrate the right technology

Inventory management is the cornerstone for integrating a unified tech stack. Letting customers buy, return, and keep on buying on whatever channel they’re in the mood for. With customers jumping between mobile, tablet, in-store, desktop, and more means that you’ll need a tech stack that can keep up with stock levels and easy reporting to match. So, you’ll always have your finger on the pulse for every item that’s available in your inventory and what channels are working for you. Your Support team will also thank you, as they’ll easily be able to assist customers and provide a top-notch service without technology standing in their way. While your customers will be able to shop the way that’s convenient for them.

Help your customers shop their way

With Payvision’s omnichannel solution you can deliver a flawless shopping experience across channels for today’s connected consumers, while gaining access to robust reporting and expertise

Chat to the experts
Ellerd Liem,
Director Point of Sales & Omnichannel Solutions
illustration of an omnichannel integration