Omnichannel Retail Explained: The Power of Customer-Centric Commerce

Omnichannel Retail Explained: The Power of Customer-Centric Commerce

How do you engage, educate and sell to customers?

Beyond traditional and multichannel retail approaches, omnichannel retail puts the customer at the center of the shopping experience, giving them more opportunities to engage with your business across multiple channels—and giving you more opportunities to build lasting relationships with them, generate more revenue and assure sustainable business growth over time. 

But omnichannel retail only works if it’s a unified brand experience across multiple channels, where each seamlessly connects with the other. 

Becoming an omnichannel retailer means knowing what type of shopping experience your customers want, building it and supporting buyers on each channel the way they want. 

That’s easier said than done, though. In this post, we’ll go over:

 

What does omnichannel mean in retail?

Omnichannel is a buzzword getting thrown around a lot these days, so let’s start things off defining exactly what it is (and isn’t). 

Traditional retail is the way retailers operated before eCommerce and smartphone apps changed the way people shop forever. 

A traditional retailer has a brick-and-mortar location, perhaps an online store and social media accounts, but they fail to unify the experience across each. Consumers do not have inventory transparency, they cannot research products effectively and they cannot engage with the merchant other than in-store, via email, direct message or phone. 

In a nutshell: traditional retail isn’t customer-centric and is limited to regular business hours. 

Omnichannel retail means enabling customers to discover, engage, research, buy and get post-purchase support using whatever channels they want, in whatever order they want, at any time they want. 

When a customer is going through the purchasing journey, they have many choices as to where to start—they can reach your business on their time. Omnichannel commerce puts the customers in the driver’s seat. The merchant’s job is to find natural ways for the channels their customers use to overlap and support them across every touchpoint. 

 

Omnichannel commerce puts the customers in the driver’s seat. The merchant’s job is to find natural ways for the channels their customers use to overlap and support them across every touchpoint. 

 

What is the difference between omnichannel and multichannel retailing? 

The ability to interact with the customers anywhere, at any time, is what separates omnichannel retailers from traditional ones—and that’s what separates omnichannel retailers from multichannel ones as well. 

What is a multiple channel retailer?

A multiple retailer is a merchant that operates on multiple touchpoints (B&M locations, online store, social media, etc). 

Now, you might be saying to yourself “but that’s exactly what omnichannel retailers do, too!”. You’re right, but there’s one big difference between the two:

Omnichannel retailers unify the experience of each channel they operate on, usually by using omnichannel retail software, whereas multiple channel retailers don’t. 

The multiple channel experience frustrates customers because it’s almost what they want, but still has friction points. They might be able to find a brand on Google, but they can’t see stock levels, buy through Instagram or Facebook, or live chat with a sales rep on your site. They can’t get what they want, when they want it⁠—whether it’s support, inventory transparency or anything in-between. 

In a nutshell: multiple channel retailers are in-between traditional and omnichannel retail. They’re almost there, but fail to unify the customer experience across all channels. 

 

Multiple channel retailers are in-between traditional and omnichannel retail. They’re almost there, but fail to unify the customer experience across all channels. 

 

But today, customers expect more than what either traditional or multichannel retail can give them. They expect a frictionless omnichannel experience. 

 

What is an omnichannel retail strategy?

Successful omnichannel retailers usually have one main focus: fusing their brand’s digital and physical experiences into one cohesive experience for the consumer⁠—regardless of what channels they use and in what order they’re used. 

Why is omnichannel retailing important?

A survey of 46,000 shoppers conducted by Harvard Business Review found that customers spend more with omnichannel retailers than they do with traditional retailers. 

And it’s easy to understand why. Customers value convenience. Omnichannel retail is inherently convenient. Traditional retail isn’t. 

Let’s dive into the key benefits of omnichannel commerce: 

  • Better brand awareness and discoverability
  • Connected physical and digital commerce
  • Unified sales, customer and inventory data
  • Increased customer lifetime value (CLTV) 

Better brand awareness and discoverability

eCommerce surged in 2020, with 30% growth in consumer spending in the first six months⁠—over twice the growth from 2019. While its growth is certainly in part because of the pandemic, the value of eCommerce was clear well before COVID-19. 

Having an online presence, through an eCommerce store, search engine optimization (SEO) and social media, helps your business get found by more shoppers, both local and abroad. 

With omnichannel retail, you’re discoverable at every touchpoint, increasing discovery and brand awareness on your customers’ time. “Through integrations with Google My Business, Facebook Pixel and Instagram, Lightspeed merchants have a suite of tools to help them translate engagement into sales,” explains Kyle Baggs, Product Marketing Manager at Lightspeed. 

Omnichannel retailers can create meaningful interactions, increase brand awareness with relevant buyers and translate that engagement and awareness into more sales either through their online or physical store.  

Connected physical and digital commerce 

Having an online store allows you to expand your customer base to include those too far to visit your store, and that’s already enough of a reason to start thinking about eCommerce. But selling online also has an omnichannel impact; local shoppers will be able to check out your store hours, stock levels and reviews. 

57% of consumers surveyed pre-COVID had picked up an online purchase in-store. With safety-conscious consumers carefully planning their in-store trips post-COVID, buy online, pick-up in-store (BOPIS) is set to see even more of a surge in popularity⁠—BOPIS orders already surged 208% year-over-year in April. 

More customer connections from social selling

Did you know that 74% of customers say that social media has played a role in their shopping journey? Customers put a lot of value on reviews and referrals from their fellow shoppers—social commerce done right leverages social proof and, with tools like Instagram Shopping, helps them buy without leaving the platform. 

Whether you’re creating shoppable posts, giving a sneak peek at your upcoming collection or something in between, finding natural ways for your social media accounts to overlap with your physical and digital storefronts makes for a more cohesive shopping experience and provides another opportunity for customers to discover, engage, buy and be an advocate for your brand.   

Unified sales, customer and inventory data

Having a connected point of sale system and eCommerce platform—or better yet, using a single omnichannel retail platform—means all your customer, inventory and sales data is updated in real-time across your channels. Customers get complete inventory transparency when they’re shopping online, and merchants can be confident that the numbers they see are accurate.

For customers, this can mean that purchases they make online are synced to their purchase history across channels, allowing sales associates to cater their approach based on past purchases. Customers get the same quality of service at every touchpoint.

For merchants, unified sales, customer and inventory data across all channels means they’re able to use real-time, accurate data as well as their instincts to make decisions. 

Increased customer lifetime value 

Businesses that prioritize building a fluid omnichannel experience benefit from better brand awareness and deeper, more profitable relationships with customers. The same Harvard Business Review survey found that omnichannel retailers saw a 23% increase in repeat shoppers over a six month period. Customers value convenience and reward merchants who make their lives easier with their hard-earned dollars. 

 

Omnichannel retailers saw a 23% increase in repeat shoppers over a six month period. Customers value convenience and reward merchants who make their lives easier with their hard-earned dollars. 

 

Omnichannel merchants give customers more ways to shop, which results in more loyal customers and higher customer lifetime value.

How to implement omnichannel in retail: 4 factors to consider

If you’re ready to take your business omnichannel, here’s what you need to think about before getting started: 

  • Which channels do your customers use? 
  • What is your business model? 
  • What type of POS system do you use? 
  • What type of eCommerce software do you use? 

Wish channels do your customers use? 

Omnichannel is a customer-centric business model. Take a moment to think about who your target consumers are and, more specifically, what channels they use. 

Research how your customers typically buy something. While part of this comes down to your instincts and knowing what channels you get the most engagement on, you can (and should!) back up your instincts with data from the source. 

In other words: ask your customers what channels they use to shop (literally). 

Use a tool like Typeform to build a survey to send to your mailing list. Ask them discovery questions like:

  • How did you discover our brand? 1) Instagram, 2) Facebook, 3) Google Search, 4) Through a friend, 5) In a blog or publication, etc. This question helps you understand how your customers were first introduced to your brand. It’s also where they may prefer discovering new products you launch.
  • Which option best describes how you shop? 1) Browse online, buy in-store, 2) browse in-store, buy online, 3) buy online, pikup in-store, 4) buy online, ship to home, 5) Buy in-store, ship to home. 

This will help you understand what types of shopping journeys your customers prefer, which will help you build an omnichannel experience that’s right for them

Remember: omnichannel retail isn’t about being everywhere, it’s about being everywhere your customers are. 

 

Omnichannel retail isn’t about being everywhere, it’s about being everywhere your customers are. 

 

What is your business model?

Ensure that your omnichannel strategy supports your physical and digital store operations. This means if personalized shopping is a big part of the customers’ experience in-store, it needs to be a big part of their online experience as well, be it through virtual stylists and appointment shopping or even just a way to make try-on appointments online.

What type of POS system do you use?

If you want to set yourself up for success, your POS system should do more than just ring up sales—it should manage every aspect of your business, from inventory organization to customer management and beyond. 

Going omnichannel will mean your store is always open for your customers, and you don’t want that to mean you’re glued to a physical location to manage all channels. If you want to be truly omnichannel, you’ll need to go cloud-based. That way, you’ll be able to check on reports, order new stock and manage your online channels anywhere you are.

Which eCommerce platform do you use?

For a truly unified omnichannel experience, your eCommerce platform should be fully integrated with the POS system you use for your physical store locations. 

A consistent customer experience across all channels hinges on accurate inventory transparency at every touchpoint. Whether they’re checking inventory levels on your website or through Google Local Inventory Ads, your Google My Business profile or somewhere in-between, customers should see the same inventory levels you see in your POS system’s back end. 

 

Omnichannel retailers doing it right

Ready to start crafting your omnichannel strategy? Get inspired by how some of the best in the business are creating completely unified shopping experiences using multiple touchpoints. 

  • Nike
  • Warby Parker
  • Glossier
  • Editorial Boutique
  • Rebicycle
  • Lululemon

Nike

Nike’s omnichannel strategy now drives its business model, and their investments have paid off with a 35% year-over-year growth in revenue

They’ve leaned into the power of mobile apps to connect with customers and take advantage of the fact that with an app, they can serve their customers a digital experience, even within a physical store. 

Using the app, customers are recognized when they enter a store, can checkout and pay for their purchase without waiting in line and can find and reserve products while in-store on their phones. 

The result is astounding customer loyalty at scale

Warby Parker

Warby Parker didn’t start as an omnichannel business, but nor did they start as a traditional retailer. In the beginning, they were a digital-first brand, manufacturing high-quality glasses and selling them to customers directly through their online store. 

They’ve expanded into physical locations with an emphasis on experiential retail, a move that they’ve found bolstered sales on both channels. Customers often started by searching for glasses online, then head in-store to try on the pairs they found online.  

Warby Parker’s omnichannel experience is a webroomer’s dream. 

Glossier

Like Warby Parker, Glossier began as a digital-first company. They took what they learned from their online operations—that customer experience is a value driver—and encourage their employees to center personalized experiences at every channel and every touchpoint. Whether you’re buying from them online or in-store, Glossier wants you to feel like you’re having a conversation with the company.

“The retail stores are a calculated, true representation of the Glossier brand and what the experience should be,” says Ali Weiss, Glossier’s SVP of Mareting. “We definitely take risks, but we analyze how it will impact the consumer experience before we do anything.” 

Editorial Boutique

Thinking omnichannel is relatively new for Editorial Boutique, a hip Montreal retailer that specializes in personalized stylist appointments and merging the affordable with the avant-garde.

Customer-centricity was already an essential part of their business, and it continues to be for its digital operations. Customers who don’t want to (or can’t) come in store can make virtual stylist appointments with one of Editorial’s sales associates. Every time that customer comes back, be it online or in-store, they get the same personalized service. 

Rebicycle

Rebicycle is a bike retailer whose specialty is building custom bikes, personalized to the customer’s needs, height and aesthetic preferences, and their customer journey is omnichannel to the core. 

It all starts with booking a virtual consultation online. In that appointment, a Rebicycle employee asks a series of questions to figure out exactly what the customer wants. Once finished, Rebicycle sends the customer a work order with the bike specs, cost and when it’ll be ready for them to pick up in-store. 

Rebicycle uses their online and physical store, along with appointment booking tools like booxi, to give their customers a personalized experience. In just 1 hour of getting to know their customer, Rebicycle builds a one-of-a-kind bike that matches exactly what the customer wants. 

Lululemon

For Lululemon, seeing their physical stores as a continuation of their eCommerce fulfillment strategy helps get customers their orders quicker—they’re able to ship directly from one of their many locations. Customers can choose to buy online and pick up in-store, which means when they’re on location, they can jet themselves get immersed in the new experiential retail model Lululemon has rolled out. 

 

What is omnichannel marketing?

Once you’ve got your omnichannel model set up, you’ll need to market the value-added for customers on each channel. Your goal is increasing adoption of the various omnichannel touchpoints you’ve set up. 

 

Why is omnichannel marketing important?

Imagine you were browsing Instagram and you came across something that caught your eye—a dog harness that promises to be harder to slip out of, let’s say. 

After reading through reviews in comments on the post, you click through to the account’s profile and watch a few story posts. Having been able to gather all your research in one place, you’re ready to buy—and you can, because the retailer has enabled Instagram Shopping. You don’t even have to leave the app.

Social selling is a good example of how omnichannel retailing and omnichannel marketing cross over—and you can see the benefits. 

Omnichannel marketing puts customers in control and gives them more options. It’s easier for merchants to close a sale because, rather than being intrusive with your advertising, you’re turning product discovery into the start of a connected buying journey.

 

Omnichannel marketing puts customers in control and gives them more options. It’s easier for merchants to close a sale because, rather than being intrusive with your advertising, you’re turning product discovery into the start of a connected buying journey.

 

How to build an omnichannel marketing strategy

Omnichannel retail marketing strategies are more effective because the customer receives a consistent message wherever they are. 

To build your omnichannel marketing strategy, think about where your customers usually connect with you and how you can make those channels and touchpoints overlap. 

Retargeting ads are a clear-cut example of omnichannel marketing. 

If a customer abandons their cart on your website or looks at a specific product, you can serve those customers an ad for those exact same products on Facebook and Instagram. 

Rather than feeling like a totally out-of-place ad, it reflects the customer’s interactions on another channel and is in line with their interests. 

The 6 different types of marketing channels

You don’t need to be active on every channel to have an effective omnichannel marketing strategy. You need to be active on the channels that your customers use. 

Think about how you might use the following channels as part of your omnichannel marketing strategy: 

  • Physical store: this is a requirement for omnichannel retail! And any omnichannel marketing you do should take it into account too. Are you making your customers aware of what benefits there are to visiting you in-store? Is your in-store experience connected to your online presence? One way you could connect the channels is by offering a discount for posting a picture in-store on social media with a particular hashtag.
  • eCommerce site: again, having one of these is a requirement for omnichannel retail. While social selling may be important for you, your eCommerce site will likely be the main hub for your online business activities. The Facebook pixel is a great place to start including activity on your site in your omnichannel marketing strategy.
  • Email: you never want to overwhelm your customers and end up in the spam box—but abandoned cart emails and newsletters about new product launches can help keep customers in the loop and connected.
  • Mobile app: think about Nike’s mobile app—it serves as an extension of their digital experience and connects that experience to the in-store reality. A mobile app can help you give customers control by putting your business in their hands, which means product discovery is always within the reach of their fingertips.
  • Online marketplaces: Instagram shopping, Facebook marketplace… even Etsy or eBay can supplement your eCommerce store. If you know your customers are browsing there, give them a way to discover you and then follow through to close the sale.
  • Social media: beyond social selling, how are you marketing to your customers on your social media platforms? Are you using your Instagram account to connect with your community? Are you using Facebook ads to drive bounced customers back to your eCommerce site?

 

The future of retail is customer-centric 

Customers don’t just like omnichannel—they expect it. 

If you’re not offering up cohesive experiences that put customers in complete control of their experience, you’re in danger of losing their business to a brand that is.

Going omnichannel with the right retail software prepares you to meet the future with confidence. Want to learn how Lightspeed’s omnichannel commerce platform can help you get there? Let’s get in touch.

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