What Is Omnichannel Retail? Your Business Strategy for 2022

omnichannel retail commerce

Think ‘omnichannel retail,’ and the first brands that spring to mind might be Target, Alibaba, or Best Buy. The term is usually associated with giant brands and mass merchants—but it doesn’t have to be.

Walmart, Amazon, Sephora, and their ilk may dominate the headlines as early adopters achieving great feats, such as one-hour store pickup, record sales after a viral TikTok, or loyalty-boosting mobile apps. But omnichannel retail is just as achievable for small-to mid-sized brands and just as critical to future success.

With strategic planning and focus, you can transform your eCommerce website into an omnichannel hub.

For a comprehensive understanding of omnichannel retail, it’s important to know:

What is omnichannel retail?

Whether defined as omnichannel retail, or omnichannel commerce—or hyphenated as ‘omni-channel’—omnichannel proves to be a term that garners a range of definitions. CRE, a real estate services and investments firm who works within the retail space, defines it as “retailers and consumers combining multiple channels to market, sell, buy and deliver goods.”

Bloomreach, a commerce experience cloud provider, delves a bit deeper, calling attention to the proliferation of devices and interfaces that have promulgated the business model: omnichannel retail is “a multichannel approach to sales that focus on providing seamless customer experience whether the client is shopping online from a mobile device, a laptop or in a brick-and-mortar store.” The best and most succinct definition might come courtesy of TM Forum who describes omnichannel as being the reinforcement of “brand through consistent engagement.”

And that’s essentially what omnichannel commerce is all about: your customers.

So, if you need a textbook-friendly definition of omnichannel retail, here it is: Omnichannel retail is the backend unification of sales channels so as to provide seamless and memorable customer experiences to shoppers. But you should remember that omnichannel is more about the journey than the jargon. Omnichannel, then, is just another way of saying “customer-first.”

An example of an omnichannel commerce experience

It’s the middle of winter, and your hands are chapped. You’d need some new lotion, and want to try a new brand, one with sustainably-sourced ingredients and a non-greasy formula. You search on your phone and discover Brand X, which seems to check all the boxes.

Brand X products are sold at your neighborhood Whole Foods.

The scents are amazing and you like the look of the packaging, but the store doesn’t carry the winter moisturizing kits offered on the Brand X website, so you leave without any of their products.

A couple of days later, an Instagram story promotion pops up showcasing the organic lavender farm where Brand X’s ingredients are sourced, and you recall how much you liked the look of their products. The story ends with a 10% off promo code, so you return to the eCommerce site—on your laptop this time—and place an order for that moisturizing kit. You’re offered the option to sign up for the loyalty club for a further immediate discount as well as future rewards. The kit is delivered to your home in a few days.

A week later, you’re emailed an invitation to submit a review, which will earn you extra loyalty points, and at the end of the month, you receive an SMS coupon offer for more lotion, as well as a link to information about the brand’s sustainable packaging initiative, which makes it easy and free to return empty, clean bottles to the company for reuse. You make a second purchase, print the return label for the used bottle, and mention Brand X to a friend looking for a gift idea.

As the above scenario demonstrates, omnichannel retail is achievable for independent ecommerce merchants—not just the eCommerce giants. The key to connecting the omnichannel dots is to know your customers and prioritize delivery of offerings on the digital and store touchpoints they prefer.

Omnichannel vs. multichannel

One reason for hesitation may be that it’s hard to pin down what omnichannel retail means exactly—and what makes it different from other terms that are sometimes used interchangeably.

  • Broadly, omnichannel retail is the practice of providing a cohesive, coordinated shopping experience for consumers from start to finish, however and wherever they choose to interact with brands. At its most comprehensive, omnichannel retail affects how retailers conduct sales, merchandising, eCommerce marketing, and fulfillment, both in stores and online.

  • “Multi-channel retail” is also used to describe retailers with diverse online and store offerings—but those efforts aren’t necessarily integrated and inter-operational. For example, a retailer whose eCommerce site fulfills orders from a dedicated warehouse and shares nothing but a name with store locations is technically operating in two channels, but isn’t leveraging the benefits that come with synchronizing efforts between them.

  • "Single channel retail” is a nearly-extinct term, describing brands operating just via physical stores or websites. It’s not just that store brands need to launch websites to keep up with changing consumer expectations; in recent years, “pure play” retailers founded on the web—from Amazon to Warby Parker—have opened physical locations to enhance their online offerings with store experiences.

what is omnichannel vs. multichannel retail

The omnichannel customer experience

Retailers large and small are extending and integrating their capabilities across the digital/physical divide because consumers increasingly demand it.

Shoppers don’t think about channel boundaries. They expect consistent behavior regardless of the touchpoint, recognition as individuals, recollection of their past purchases and interactions with the brand, and hassle-free, convenient experiences.

This expectation for integrated retail impacts every stage of the shopping experience:

  • Prior to purchase, consumers rely on the web as a shopping information source, regardless of where they ultimately made a purchase. Fully 59 percent of consumers research items online before heading to stores. 46 percent specifically check online whether items are in-stock on the shelves.

  • As they browse online, fully 71 percent of consumers expect the experience to be personalized—that is, reflecting preferences and past interactions with the brand through individualized recommendations and targeted promotions. What’s more, 76 percent of consumers say they’re frustrated if brands don’t deliver a tailored experience.

  • When it comes to finalizing their transactions, store purchases have rebounded—but digital is nearly as prevalent. 82 percent of U.S. consumers have returned to store shopping, while 78 percent buy items online. Digital purchases are occurring on multiple screens, with 36 percent of shoppers reporting that they buy items on their phones daily or weekly.

  • The pandemic gave many retailers a crash course in fulfillment—with the lasting effect of high consumer expectations. Nine in 10 consumers now expect free shipments to arrive within two or three days, even as fulfillment from stores is more appealing than ever: 38 percent now use in-store pickup for online orders, up 13 percentage points from prior to the pandemic.

  • After order completion, customers expect brands to follow up and stay in touch; 58 percent expect follow-up messages post-purchase. Retailers that signal interest in an ongoing relationship through tailored messaging are often rewarded with repeat business, as 78 percent of consumers are more willing to make a second purchase from companies that personalize.

In short, consumers expect to develop a consistent and personalized relationship with brands that eases the process of finding, buying, and receiving the products that meet their needs.

6 omnichannel retail benefits for merchants

While meeting these high consumer expectations is easier said than done, merchants stand to reap significant rewards from omnichannel commerce. Not only can they deliver the experiences shoppers want, but they can reduce operational costs, boost sales, and position themselves for the agility and transparency the future demands.

01. Consistency builds trust and sales

At its most basic level, omnichannel retail helps standardize merchant offerings across touchpoints. Not only ensuring discounts don’t clash, but also presenting a predictable digital experience across touchpoints. When shoppers know what to expect, whether using their mobile phones or a laptop browser or following store signage, they’re more apt to trust the brand and make purchases: businesses that embrace usable design have been shown to generate 32 percent more revenue, and brand consistency overall lifts revenue 10 to 20 percent.

02. A singular brand voice stands out

Consumers gravitate toward brands that express an authentic, singular identity, and retailers that coordinate marketing and merchandising across touchpoints have an opportunity to refine their brand voice and ensure its unique style is communicated through every social media post, product description, email campaign, and store shelf talker.

03. Personalized experiences drive revenue

Not only do 76 percent of consumers say they’re more likely to buy from brands that personalize experiences across touchpoints; 78 percent are more likely to recommend those brands to others, lending omnichannel retailers valuable word-of-mouth credibility.

Overall, leading brands earn 40 percent more of their revenue from effective personalization than lower performers, according to McKinsey.

04. Integrations enable fulfillment efficiencies

Rising fees from major last-mile carriers, high costs for courier-style local delivery, and complications arising from repurposing store square footage all pose challenges to retailers—but integrating back-end order management and inventory systems can help realize efficiencies and smoothen the process.

Furthermore, fully 85 percent of shoppers who visit stores to pick up online orders go on to make an unplanned additional purchase, helping retailers win incremental business. Store-based fulfillment services also make the most of merchandise on hand, reducing the prospect of stale inventory.

05. Unified operations support sustainability

Not only does omnichannel retail help meet shoppers’ expectations for personalization and convenience; it can also help set the stage for new sustainability-based initiatives, such as resale of used goods and reuse of packaging, both of which require logistical prowess. Demand is soaring for brands to do more to take on such initiatives: shoppers are four times as likely to buy from brands that are combating climate change.

06. Omnichannel retail yields holistic data insights

By connecting touchpoints and back-end operations, retailers can better understand the customer journey, identify areas of opportunity for improvement, and invest more in initiatives that are working well.

How to build an omnichannel retail strategy

Omnichannel retail is the norm for consumers, and delivers multiple potential benefits to merchants. But given the logistical complexities, retailers should take a strategic, thoughtful approach when it comes to implementation.

After all, who hasn’t endured a confusing store pickup experience or received a comically off-base targeted email?

These snafus make brands memorable for the wrong reasons, and can have a negative impact on the bottom line. Nearly 6 in 10 U.S. consumers will stop interacting with brands after just a few bad experiences. And 17 percent will quit after just one.

To avoid these pitfalls, it’s crucial that eCommerce merchants select and scale their omnichannel offerings appropriately. Here’s how to do it.

  1. Know your customers’ journey

  2. Standardize basic selling tools

  3. Choose the right marketing mix

  4. Optimize for crossover fulfillment efficiency

  5. Leverage big players to fill gaps

  6. Measure the results

01. Know your customers’ journey

Omnichannel retail touches so many aspects of a business that sellers often don’t know where to start. But luckily, they have reliable help shaping priorities: their own customers.

By knowing how their target audience likes to shop, retailers can adopt omnichannel strategies that prioritize connecting their customers’ most important digital touch points with physical store offerings.

To understand the customer journey, eCommerce merchants need to know at a minimum:

  • How their audience prefers to learn about products and offers

  • What devices and online/offline resources they access when conducting research

  • What payment methods are popular

  • Whether fast, free, or other priorities matter most for fulfillment

  • Where else audiences gather and shop

  • What convinces customers to re-engage

Gathering this information is invaluable when it comes to assigning priorities for omnichannel retail implementation. As a bonus, asking customers to help is a way of demonstrating that your brand has their interests at heart. To learn more about your shoppers’ priorities:

  • Use existing customer data. Brands that are already open for business can mine purchase histories, website analytics, like those provided by Wix Analytics, referral tracking, customer service feedback, store traffic patterns, reasons for merchandise returns, usage of online payment options, and numerous other data sources to compile a comprehensive overview of existing behavior. Just be aware of the gaps in current offerings that may require further information-gathering to flesh out priorities for future development.

  • Survey your target audience—online and offline. To understand what needs may be going unmet, ask potential new audiences for their input. Field an online survey targeted to demographic parameters you set, ask visitors to shopping centers to fill out a form in exchange for a coupon or discount, and consider asking for participation from attendees of events that appeal to your target audience.

  • Know the regional, demographic, and category trends that apply to your brand. Understanding the industry, your competitors’ offerings, and general expectations of the age group, income bracket, and region you serve enables you to compare your specific findings against broader trends.

02. Standardize basic selling tools

While your target audience’s shopping and buying preferences can help shape the details, it’s essential for retailers to build on a strong basic foundation of omnichannel functionality for the eCommerce site. A comprehensive online platform is essential in order to standardize design, centralize product information, and enable connections to back-end systems, marketing channels, and functionality-boosting plug-ins. In particular, merchants should invest in:

  • Shareable product, brand, and customer service content. A comprehensive catalog of both product-specific and “value-added” marketing content, along with comprehensive information about in-store services and events, can help retailers stand out from the competition. And adapting and customizing product feeds and other content for different devices, social media platforms, and even third-party marketplaces can boost efficiency.

  • Personalization that predicts. Customized product recommendations that suggest complementary products and add-on items based on shoppers’ past brand interactions can be a major revenue booster: by some counts these tools influence 92 percent of shoppers to make purchase decisions. Modern personalization engines blend analytics with artificial-intelligence-powered algorithms to predict preferences and serve relevant products and content.

  • Mobile-first functionality and design. Consumers now do the majority of their shopping research and complete 4 in 10 online purchases via mobile commerce, which means that any digital offering should be developed with small screens in mind.

03. Choose the right marketing mix

While basic eCommerce functionality is a must-have, there’s more flexibility when it comes to choosing which channels to engage for marketing your brand’s products and offers. It’s crucial to match marketing methods with your target audience’s preferences to avoid expensive advertising and content investments that fail to deliver results.

While there’s no one-size-fits-all marketing mix, it’s useful to devise strategies for these key phases of the customer journey:

  • Discovery. To introduce your brand to new shoppers and expose existing customers to fresh offerings, establish brand outposts on social media sites, develop content that boosts visibility in search results, reward word-of-mouth recommendations, and invest in ad campaigns to reach relevant audiences. You can use Wix Multichannel Campaigns to simplify marketing across various channels like email, Facebook, and Instagram. Instead of managing each separately (and consequently logging in and out of multiple sites), you can created a unified campaign from one dashboard and easily track your success.

  • Consideration in the “messy middle.” Forget “the rule of seven.” By some estimates, omnichannel consumers need anywhere from 20 to 500 brand interactions as they navigate what Google calls the “messy middle” of the path to purchase: the phase that can include researching, consulting other sources, adding items to the shopping cart, comparing prices, and asking friends. Reviews, buying guides, and social media endorsements can all sway these shoppers, as can nudges in the form of remarketing ads, abandoned-cart email campaigns, discount offers, and invitations to experience products in-store.

  • Re-engagement post-purchase. Reaching out to existing customers with timely offers and content is crucial for winning repeat business, and there are more ways than ever to connect—from tried-and-true email replenishment offers to SMS alerts letting recipients know about nearby store events of interest to calls for participation on social media.

An omnichannel platform like Wix eCommerce allows you to create newsletters and a range of email marketing campaigns to reconnect with past buyers. You can further build customer loyalty by setting up automated messages across email and chat based on customer actions and account behaviors with our CRM.

04. Optimize for crossover fulfillment efficiencies

If there’s one aspect of omnichannel retail that small-to-mid-sized merchants find most intimidating, it’s the prospect of trying to compete with the scale and efficiencies of mass merchants like Amazon or Walmart when it comes to order fulfillment.

The good news is that consumers are rooting for startup and small businesses, and will cut them slack—if they’re transparent about shipping options, costs, and timelines, and explain their constraints.

For example, Accenture found that 57 percent of consumers would switch to a brand that clearly explained any changes in service levels due to the pandemic or economic or societal issues.

Starting with focused objectives and perfecting new capabilities one by one can help avoid cost overruns and customer-service mishaps. In addition, consider focusing on:

  • The green option. Given consumers’ growing preference for sustainable options, highlighting the fact that slower shipping enables greater efficiency and reduces environmental impacts can help guide shoppers toward delivery options that alleviate the need for speed and cost less to boot.

  • Stores as the fast, free alternative. Nearly half of those who abandon their online shopping carts do so because of extra unexpected costs, such as shipping fees. While making free shipping widely available isn’t economical for most independent retailers, they can offer an alternative: their stores. Local customers can pick up items, often within a day or two, for free, while shipping from stores (as opposed to centralized distribution warehouses) can be cheaper and quicker for home delivery within the region.

05. Leverage the big players to fill gaps

No matter how thoughtfully you strategize, the fact is that you likely don’t have the resources to do everything in every channel. But you can ride the coattails of bigger players who offer selling, marketing, and fulfillment opportunities that help bridge the gaps.

Retail and technology’s giant brands rely on independent retailers to broaden their platform’s product selections, localize their content, and boost relevance. While these David-and-Goliath partnerships have potential drawbacks, they can help omnichannel retailers achieve scale and efficiency in areas that matter to their customers. Consider:

  • Amazon fulfillment if your audience craves speed. If most of your potential customers live beyond the reach of your store locations and want items delivered fast, or if many are Prime members, you may want to consider listing items on Amazon’s third-party marketplace, here’s a guide on how to sell on Amazon, and using the Fulfillment by Amazon (FBA) option to enable swift home delivery. In addition to leveraging Amazon’s industry-leading fulfillment, you’ll benefit from added visibility with new audiences, as the site is now the top destination for online shopping searches.

  • Social commerce platforms to boost visual content capabilities on mobile. Fully 99 percent of all social media users access their networks via mobile devices—which means that omnichannel retailers who establish brand outposts can gain visibility with new mobile audiences. What’s more, shopping capabilities on sites like Pinterest and Instagram enable followers to share eye-catching content with “buy” buttons built in, and cutting-edge augmented-reality shopping features on Snapchat, give retailers access to a toolset that might otherwise prove too costly to develop.

06. Measure the results

Not only is comprehensive integration and execution crucial to the success of omnichannel initiatives; it’s also critical to capture shoppers’ activities when using omnichannel features and to compile a single customer record that reflects all their interactions with the brand.

Ensuring that the results of omnichannel activities are accurately reflected in web analytics and behavioral tracking tools will not only help track their contributions to the bottom line; they’ll also deliver unprecedented insights into your customers’ preferences and behaviors, helping your brand deliver future offerings that are even more relevant.

Omnichannel commerce success is within reach

While omnichannel commerce is a daunting undertaking for rising eCommerce retailers, consumers increasingly expect brands to fluidly blend online and offline experiences—and to unify offerings across digital properties. eCommerce merchants who maintain a tight focus on the needs of their specific audience and flawlessly execute what omnichannel initiatives they offer can not only win immediate sales, but set the stage for future blended experiences that delight and satisfy their customers.

Geraldine Feehily

Bogar Alonso

Head of Outbound Marketing, Wix eCommerce

Bogar leads thought leadership and outbound marketing for Wix eCommerce. He has an extremely soft spot for all things eCommerce, retail, tech, content, and marketing.

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