Omnichannel Explained: Why You Need It and 3 Killer Examples

What is Omnichannel Retail

Omnichannel commerce is taking over.

Do a count: How many apps do you have on your phone? How many social media accounts do you engage with? And as you read this, how many internet connected devices are in the room with you?

That’s omnichannel.

As technology develops, our everyday lives are becoming more and more intertwined with the internet. And as a result, consumers expect to be able to purchase what they want, when they want, how they want.

Whether it’s in-store, on a website, through an app, or on social media, consumers now move seamlessly between multiple channels.

Which is why businesses must too.

In this article, you’ll learn what omnichannel retail is and why you need it. Plus, you’ll learn about how three leading brands are implementing omnichannel strategies.

Strap yourself in.

What is Omnichannel?

In short, omnichannel is god-like marketing and sales.

But let’s dig a little deeper.

The term “Omnichannel” refers to an integrated approach to marketing, sales, and operations activities.

This allows consumers to shop across multiple channels and devices while experiencing a unified customer journey.

For this reason, omnichannel retail encompasses and integrates all forms of online and offline selling, such as:

  • Ecommerce websites.
  • Ecommerce marketplaces, such as Amazon, eBay, and AliExpress.
  • Native selling on social media sites, such as Facebook, Instagram, and Pinterest.
  • Brick-and-mortar and pop-up stores.
  • Social advertising and retargeting on platforms like Twitter, Facebook, or LinkedIn.
  • Other online advertising and retargeting methods, such as Google Ads.
  • Extremely personalized email marketing.
  • Mobile websites and applications.
  • SMS and messaging platforms, such as Facebook Messenger.
  • And any other sales and marketing activities a business might use!

In omnichannel retail, data from all channels is shared in order to unify all of these activities.

This way, each customer receives a seamless, personal journey regardless of how they choose to interact with a brand.

If you’ll allow me to break out the dictionary for a moment – and I promise, this will be painless – “omni” is a Latin word meaning “all.”

Omnichannel Definition

It’s typically used with words like “omnipotent” and “omnipresent,” meaning “having unlimited knowledge and power” and “being present everywhere.”

In this instance, “omni” is a suitable prefix for a strategy which allows businesses to track, understand, and customize each consumer’s experience throughout every brand touchpoint.

Like I said: God-like.

What an Omnichannel Experience Might Look Like

Remember, omnichannel retail is about communicating with consumers across multiple channels and having a deep awareness of where they are in the customer lifecycle.

With that in mind, let’s look at a hypothetical example of what an omnichannel customer experience might look like:

The Customer Relationship Begins

Sarah visits a Facebook page using Facebook Shopping, where she discovers and purchases a sweater in size 8.

She receives her sweater, complete with an insert promoting other clothing items and accessories not listed on the Facebook page, along with a discount. The insert also includes details of the brand’s loyalty program.

The Customer Relationship Deepens

Sarah visits the discount landing page, which triggers the Facebook pixel to start running retargeting ads to her on Facebook and Instagram.

While there, Sarah adds a pair of size 8 leggings to her cart, but she leaves before buying. Immediately, Sarah is sent an abandoned cart email featuring the leggings she didn’t buy, with a time-sensitive discount promotion.

Meanwhile, the Facebook and Instagram retargeting ads promote the leggings Sarah added to her cart, as well as the other items of clothing that she looked at when she visited the online store.

However, these ads exclude any items sold out in size 8.

Sarah clicks on one of the Facebook ads to return to her basket. She purchases the leggings and a beanie hat using the discount code.

When she receives her order confirmation email, it includes information about the brand’s refer-a-friend program.

Personalization Intensifies

At this point, the Facebook and Instagram retargeting ads stop showing leggings and beanies – items that Sarah has already bought. Instead, they now focus on related winter clothing such as gloves, scarves, and coats.

Next, Sarah receives an email letting her know about a pop-up store happening in New York. She also receives details of the loyalty points she’s earned from her previous purchases, and how they can be applied as a discount at the pop-up store.

Sarah visits the pop-up store with a friend who purchases a pair of gloves while taking advantage of the “refer-a-friend” program – this earns them both a $15 voucher.

Customers Are Nourished into Advocates

Follow-up emails encourage Sarah to browse new looks on Pinterest. She’s also encouraged to follow the brand on social media platforms to earn additional loyalty points and to post photos of her purchases on Instagram using a branded hashtag.

Sarah posts photos of her new look online which the brand reposts on Instagram, strengthening her relationship with the brand.

When the brand reposts Sarah’s photos, they make the Instagram post shoppable to promote those particular products to their audience.

And on it goes…!

This example shows how creating an omnichannel customer journey means integrating every aspect of your business, from marketing and sales to inventory management.

Chris Shaw, the Director of Product Marketing at Manhattan Associates, a supply chain and omnichannel commerce technology company, says,

“When the customer places that order [online] or calls the contact center or walks into the store, we try to do everything we can to put the customer and the order back together again, because they don’t make any sense without the context of each other – [and] not just the transactions the customer has had at the particular store they may be in right now, but all the interactions they’ve had outside that store: the times they’ve interacted with the call center, when they’ve interacted via social, when they’ve interacted via chat.”

Done well, omnichannel retail should allow consumers to transition seamlessly across multiple channels, while being drawn deeper into the brand experience.

Omni-channel VS Multi-channel

Is omni-channel the same as multi-channel?

In a word, no.

In multi-channel marketing, a business uses different channels to interact with consumers and tailor their experience.

However, these channels are managed separately and operate independently of each other.

In multi-channel marketing, the opportunity for consumers to move between different channels is greatly reduced or simply doesn’t exist at all.

Different departments and teams within a business may communicate, but their efforts aren’t unified.

The graphic below illustrates the differences between multi-channel and omnichannel:

Multi-Channel vs Omni-channel

Most modern businesses are engaged in multi-channel retail.

They might be running Facebook ads, email marketing campaigns, content marketing, native social selling, and more. However, very few businesses have unified and integrated these channels into an omnichannel strategy.

Which begs the question:

Why is Omnichannel Strategy Important?

The need for omnichannel retail was predicted long ago.

In a Harvard Business Review article from 1995 titled, Do You Want to Keep Your Customers Forever?, the opening paragraph stated:

“Customers, whether consumers or businesses, do not want more choices. They want exactly what they want—when, where, and how they want it—and technology now makes it possible for companies to give it to them.”

So how can businesses meet this demand?

It Begins with Personalization

“Looking back three, four or five decades, personalization was simply the way business was done, at least by the best merchants of that time,” says Shaw.

“When my grandfather, who was an engineer and a mechanic, would walk into his local hardware store, the people who worked there knew who he was and knew the kind of products he bought. They would go so far as to stock certain brands of tools simply because they knew that Hugh Shaw would buy those tools when he came in and that he was dedicated to that brand. They would even, sometimes, drop a purchase off at Grandpa’s house on their way home if that was helpful to him.”

So are most marketers effectively personalizing customer experiences today?

Well, not yet.

Unfortunately, only 12 percent of marketers are “very” or “ extremely” satisfied with the level of personalization in their marketing efforts, while 38 percent are “moderately” satisfied.

Marketing Personalization

However, this isn’t because personalization isn’t valued.

In a 2018 study by Evergage/Researchscape International, marketers overwhelmingly agreed (98 percent) that personalization helps advance customer relationships, with 74 percent claiming it has a “strong” or “extreme” impact.

Marketing Personalization Relationships

What’s more, 88 percent stated that their customers and prospects actually expect a personalized experience.

Marketing Personalization

If personalization is so important, why are marketers struggling to implement it?

The Challenges with Personalization

It comes down to data and integration. Marketers are struggling to link insights across channels and track customer journeys that span multiple devices and platforms.

The research revealed that 55 percent of marketers reported that they feel they don’t have sufficient data and insights for effective personalization. This is no surprise when you consider that on average, customer data is housed across multiple systems.

In short, extreme personalization is easy to provide as a mom-and-pop business.

However, as a business grows and ecommerce channels are utilized, personalization becomes far more difficult.

An Integrated Omnichannel Strategy Is the Solution

Unifying all aspects of your business allows insights and data about individual customers to be applied throughout the customer journey.

And it’s highly effective.

McKinsey Research and Harvard Business Review collaborated with a retailer who operates hundreds of stores across the U.S to learn more about the power of omnichannel retail.

In the study, “channel” was defined as any interactive touchpoint with the retailer – online or offline, including websites, mobile applications, and in-store tablets.

Of the 46,000 participants in the study:

  • 7 percent were online only
  • 20 percent were store-only shoppers
  • 73 percent used multiple channels

“Not only did [omni-channel customers] use smartphone apps to compare prices or download a coupon, but they were also avid users of in-store digital tools such as an interactive catalog, a price-checker, or a tablet. They bought online and picked up in store, or bought in the store and got their purchases shipped.”

That’s not all.

The study also discovered that omni-channel customers spent an average of 4 percent more in-store, and 10 percent more online than single-channel customers.

Here’s the best part: The more channels a customer used, the more they would spend.

“Customers who used 4+ channels spent 9 percent more in the store, on average, when compared to those who used just one channel.”

Bottom-line: Omnichannel retail allows businesses to provide personalized, intuitive experiences to customers, throughout multiple touchpoints – at scale.

3 Brands Delivering Remarkable Omnichannel Experiences

Now that you understand what omnichannel retail is and why it’s so important, let’s look at three real-world examples of how brands are using omnichannel strategies to grow.

Now, if you’ve just launched your Shopify store, you probably don’t have physical stores or immersive technology. However, these examples showcase the potential and principles of omnichannel commerce.

1. Crate and Barrel

Crate&Barrel Omnichannel

Homeware store Crate and Barrel partnered with omnichannel specialist CloudTags to test a program dubbed “Mobile Totes.”

This allows Crate and Barrel to synchronize their physical stores and website, and remarket to store visitors online.

The program uses tablets throughout their brick-and-mortar stores that act as digital shopping bags. These allow customers to scan product barcodes to learn more and read product reviews.

Customers can email themselves their shopping list, or checkout in the store where a sales assistant will gather their items for them.

If a customer doesn’t purchase items, but emails the list to themselves, when they open the email, their cookie ID enables Crate and Barrel to retarget them with ads featuring the products they added to their list.

Crate and Barrel reported a 10% sales spike within two months of testing Mobile Totes in their Skokie, Illinois, store.

Although some criticize remarketing as creepy, Joan King, VP of ecommerce at Crate and Barrel, disagrees: “More and more, people are actually expecting that we know their shopping preferences. They are expecting us to be smarter and smarter.”

2. Neiman Marcus

Neiman Marcus Omnichannel

In 2017, high-end fashion retailer Neiman Marcus was awarded the IRT Retailer Innovation Award in Customer Engagement for its omni-channel efforts.

Neiman Marcus focuses heavily on personalization. As Jeff Rosenfeld, VP for Customer Insight and Analytics, said, “Identity is the core of personalization, and if you don’t get it right, you’re not talking to the entirety of that customer.”

So how is Neiman Marcus employing omnichannel strategy?

To start, when a customer consistently searches clothes or shoes in a specific size, the website will remember. Then, the next time they search the website, they’ll be shown products in nearby brick-and-mortar stores with those sizes available.

Online shoppers are also shown promotions that feature relevant local events, and new arrivals in nearby stores from brands they’ve shown interest in.

Plus, all of this is incorporated into email marketing and direct mail campaigns.

Neiman Marcus also integrates new tech tools into its omnichannel strategy, such as the in-store “Memory Mirror.”

This lets brick-and-mortar visitors record a 360-degree video of themselves trying on clothing. They can save this video in the mobile app to show friends or look at it later when they’re ready to purchase online or in-store.

Neiman Marcus has also created an app called “Snap. Find. Shop.

Neiman Marcus Snap Find Shop

Whenever users see a pair of shoes or handbag they like, they can use the app to take a photo, which is then used to search the Neiman Marcus database using smart image recognition.

If Neiman Marcus stocks something similar, users can immediately buy it on the app.

3. Timberland

Timberland Omnichannel

Outdoor fashion brand Timberland is working hard to integrate their in-store and ecommerce experiences.

The brand has introduced tablets and large interfaces called “TouchWalls” to their stores.

The TouchWalls allow in-store users to search and learn about online-only inventory, while creating a shopping basket that merges in-store and online products.

Customers can also use in-store tablets equipped with CloudTags technology and near-field communication (NFC). These allow them to scan NFC-tagged products so they can access additional product information and read online reviews. Plus, the tablet will promote other products related to those scanned.

“You are engaging with the consumer on an intimate level – they are telling you what products are interesting,” said Kate Kibler, VP of direct to consumer at Timberland. “That customer data is one of the most important things to grow your brand.”

Customers can also email themselves their shopping lists, and all of this activity is stored online in user profiles that allow Timberland to remarket products to users.

Kibler explained: “What we’re doing is giving the consumer the option to shop how they want, when they want.”

Summary

Omnichannel is still an emerging method.

Arguably, even the most proficient and cutting-edge omnichannel examples are still just scratching the surface of what will soon become possible.

Remember, omnichannel retail is about communicating to consumers with a strong understanding of where they are in the buyer’s journey – regardless of how they decide to interact with a brand.

In order to provide this seamless omnichannel experience, businesses must integrate all aspects of their business so that data can be harnessed and applied at every consumer touchpoint.

And this holds true for every business, regardless of size – even if you only have a few consumer touchpoints, such as an online store, Instagram account, and email sequences.

Some people may find it intrusive but omnichannel is the future of commerce.

What are your thoughts on omnichannel and personalization? As a consumer, do you think it’s intrusive or helpful? Let us know in the comments below!

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