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What is Omnichannel retail. The Evolution of Retail in an Omnichannel World

The world of retail has undergone radical transformations in recent decades. In this digital age, where competition is ramping up and consumer expectations are constantly shifting, Omnichannel Retailing has emerged as a solution. But what is Omnichannel Retailing and how can a business adapt to this trend?

What is Omnichannel retail?

This new era has redefined the traditional boundaries of brick-and-mortar stores. Now, a customer might start their shopping journey on a mobile app, compare prices on an ecommerce website, and finally make a purchase in a physical store. This is the essence of Omnichannel Retailing: it offers a cohesive, integrated experience across all these touchpoints, ensuring a seamless journey for the shopper.

Some examples of omnichannel retail strategy

Understanding your audience and their behaviors in Omnichannel Retailing

In an Omnichannel Commerce scenario, deep understanding of the audience is more crucial than ever. This is where concepts like “User Journey”, “Buyer Persona” and customer segmentation become essential:

  • User Journey in Omnichannel Retailing:
    • Definition: It is the journey that a customer takes through multiple channels (online, physical, mobile, social networks, etc.) from the recognition of a need to post-purchase.
    • Real example: Consider Carlos, who discovers a new book through an ad on Instagram. You research online reviews, add it to your wish list in an app, visit the physical store to browse it, but finally purchase it through the store’s website with a special promotion. Later, you receive email recommendations for other books based on your purchase.
  • Buyer Persona in Omnichannel Retailing:
    • Definition: Detailed representations of different types of customers who interact with your brand through various channels in the omnichannel ecosystem.
    • Real example: “Mamá María”, a working mother who shops both online and in physical stores. He prefers to shop online to save time, but visits the physical store when he wants to check the quality of the product. Understanding “Mamá María” allows the retailer to offer online purchasing options with in-store pickup, facilitating your omnichannel shopping experience.
  • Customer segmentation in Omnichannel Retailing:
  • Definition: Divide your customers based on how, when and why they interact with your brand through different channels.
  • Real example: An appliance retailer may have segments such as “frequent online shoppers”, “occasional physical store visitors” or “social media deal seekers”. By identifying these segments, the retailer can send special offer notifications to “social deal seekers” when they are near a physical store or provide exclusive discount codes for “frequent online shoppers.”

By incorporating these strategies into omnichannel commerce, retailers can ensure that the shopping experience is seamless and personalized across all touchpoints. At the end of the day, success in Omnichannel Retailing comes down to understanding and addressing customer needs at every stage of their journey, no matter which channel they choose.

Omnichannel Retailing and Ecommerce Integration – KPIs: Omnichannel Strategy for Prices and Loyalty

“TechZone”, a leader in technology retail, has understood the need to offer a unified shopping experience to its customers, regardless of the channel they use. To do this, they establish a key KPI: “Improve the customer experience in all channels and increase sales by 30% during the next quarter through omnichannel promotions and achieve 25% more registrations to the loyalty program.”

The strategy breaks down as follows:

  1. Financial Department : Evaluates products that may be subject to discounts, considering sales in store, online and through the app. They establish special promotions for combined purchases between channels, such as discounts in the app for products reserved in store.
  1. Marketing Team : They design specific campaigns for each channel, but with a coherent and unified image. The promotion of the app, for example, could be highlighted in the physical store so that customers download the application and take advantage of exclusive promotions.
  1. Establishments and Sales Team : They are trained not only to sell in-store, but to promote the omnichannel experience. If a product is not in stock in the store, the sales team can help the customer order it through the app or online store and decide if they want to receive it at home or pick it up in the store when it is available.
  1. App and Online Store Team: They ensure that the online experience reflects the promotions of the physical store and vice versa. They incorporate functions such as “reserve in store” or “pick up in store” for products purchased online, ensuring that the customer has multiple convenient options.
  1. Loyalty Strategy: They expand the loyalty program so that points can be earned and spent on any channel. If a customer earns points in the physical store, they can use them to obtain discounts in the online store or in the app. To attract more users, they offer additional points for purchases made through different channels in the same month, promoting the omnichannel experience.

With this strategy, “TechZone” not only drives sales and customer loyalty, but ensures that regardless of which channel the customer chooses to use, they will receive a consistent and unified experience. This cohesion is the essence of omnichannel retail: providing the same quality and benefits no matter how or where the customer chooses to interact with the brand.

Identification of problem points in Omnichannel Retailing:

Identifying Pain Points in Omnichannel Retail: The Case of ‘UltraRun’ Sneakers

The sports fashion company “SportyLife” is a clear example of how data analysis in an omnichannel retail business can reveal problem points in a product.

  1. The scenario:
    SportyLife, with both an online and offline presence, launched a new model of running shoes, the ‘UltraRun’. The marketing campaign was ambitious, covering digital and social channels, physical stores and its app. Apparently, everything was going smoothly: online sales showed an upward trend and interactions on social networks were positive.
  2. Data collection:
    However, thanks to its omnichannel strategy, SportyLife was able to collect data from different customer touchpoints. The analysis team consolidated sales data from physical stores, interactions in the app, comments and reviews on the website, direct feedback from customers in the store, and comments on social networks.
  3. The finding:
    Studying this data together, the team noticed an unusual pattern. Despite good initial sales and positive online reviews, many customers who had tried the ‘UltraRun’ in physical stores did not purchase them. Additionally, returns for this particular product were higher than the average for other products, especially from the online store.
  4. Depth investigation:

Analyzing the data further, the team noticed an interesting pattern. Although ‘UltraRun’ shoes were designed specifically for runners, a high percentage of online purchases were made by users looking for shoes for casual use. This data correlated with returns and feedback from customers, who mentioned that, although the shoes were aesthetically attractive, they were not as comfortable for daily use as they expected. When investigating physical stores, they realized that the ‘UltraRun’ were displayed in the running section, when in reality, due to their design and marketing, they attracted more to an audience looking for a casual style.

  1. Action taken:

With these findings, SportyLife decided to make some strategic adjustments. They relocated the ‘UltraRun’ shoes in their physical stores, placing them in an intermediate section between running and casual so that customers had a clearer idea of their recommended use. Additionally, they adapted online marketing to focus on the ‘UltraRun’ both as an option for runners and those looking for a casual sports style. Clear labels and descriptions were implemented on the website and app, pointing out the dual purpose of the shoes.

  1. Result:

Thanks to these adjustments, returns decreased significantly and customer reviews improved. SportyLife demonstrated once again the importance of listening to customers and quickly adapting to their needs and expectations. This action reinforced the company’s commitment to a unified customer experience, demonstrating the advantages of an omnichannel strategy that integrates feedback from both the online and offline worlds.

Provide seamless experiences across every digital channel:

The success of Omnichannel Retailing lies in the cohesion and continuity between channels. For example, a customer could start by exploring products in a mobile app during their subway ride, later review reviews on social networks from their PC, and finally make a purchase from their tablet. If at any point in the process the customer feels disoriented or loses previously seen information, the omnichannel strategy is not being effective.

Tools that track customer activity as they move from channel to channel are essential. Imagine a customer who adds a pair of shoes to the cart on their mobile but decides not to purchase immediately. The next day, when you access the website from your PC, those same shoes should be waiting for you in your cart, ready for purchase.

And the commitment does not end with the purchase. Unified order handling ensures that whether a customer buys online and picks up in-store, or buys in-store and chooses home delivery, the experience is consistent. If a customer decides to return a product, they should be able to do so in any store, without complications, regardless of the original purchase channel.

These examples illustrate how Omnichannel Retailing is not just a strategy, but a customer-centric philosophy that seeks to provide consistent and seamless experiences at every touchpoint.