The term omnichannel is a popular eCommerce buzzword, but what exactly is omnichannel eCommerce, and why is it important?
We cover these questions and more about the eCommerce sales phenomenon that is omnichannel.
What is omnichannel eCommerce?
Omnichannel eCommerce gives customers a seamless shopping experience across all digital channels, whether they are shopping from a desktop, mobile device, via social media platforms, or from an in-store kiosk.
An omnichannel eCommerce strategy anticipates that customers will start searching on one sales channel and often move to another. Omnichannel integrates a multichannel strategy and optimises it as a progression of the online purchasing journey for the modern eCommerce customer.
What is the aim of the omnichannel approach?
The primary purpose of the omnichannel approach is to always be where customers are and build stronger connections with those customers. The omnichannel approach seeks to create a positive customer experience by using a variety of channels to communicate with customers and help them to shop when and how they want to.
Using multiple sales channels such as brick-and-mortar stores, social media platforms and online marketplaces, a multichannel approach helps businesses to expand their reach and improve leads and conversions.
Omnichannel vs multichannel eCommerce: what’s the difference?
The key difference between an omnichannel and multichannel approach is that omnichannel provides a holistic, integrated shopping experience across multiple channels.
Operating on the premise that consumers will engage with a brand using multiple channels before making a purchase, omnichannel eCommerce provides a unified customer experience across all of the channels a shopper uses.
Multichannel eCommerce, on the other hand, uses two or more channels, platforms, or marketplaces to sell goods. Each channel is treated as independent from the other and engages with customers separately.
Put another way, the difference between omnichannel and multichannel eCommerce is that omnichannel eCommerce is an improved version of multichannel eCommerce.
Why is omnichannel eCommerce important?
Omnichannel eCommerce is important because consumer buying behaviour has changed: consumers now research and purchase products both online and offline, use mobile devices to research products instore, and shop via social networks or across devices.
Omnichannel eCommerce is customer-centric and puts the customer in control of their interactions with a company while providing a range of options for them to conduct business with the brand.
It’s increasingly vital for any business operating within the eCommerce arena to have an omnichannel eCommerce strategy because those with robust omnichannel engagement strategies retain their customers nearly three times more on average than those who don’t.
The benefits of omnichannel eCommerce
There are many benefits of omnichannel eCommerce, including better customer experience, greater profitability, and improved efficiencies. Omnichannel eCommerce allows you to:
- Be where your customers are regardless of the channel they use. Omnichannel operations offer greater reach to meet your customers where they are, providing them with a uniform and streamlined customer experience across all platforms.
- Enhance customer satisfaction, because omnichannel optimises opportunities for personalisation through collection, analysis and cross-referencing of customer metrics and data, from all channels. Omnichannel also makes it easy for customers to make purchases or reach customer service teams from any device, via their preferred platform.
- Improve profitability. When consumers find it easier to research, find and make purchases from multiple platforms and channels, they are more likely to be repeat customers. An early Harvard Business Review found that omnichannel shoppers tended to have greater brand loyalty and also bigger baskets per shop.
- Develop better efficiencies, with integrated customer service, sales, marketing, and resource planning activities. For example, with business functions working together to create streamlined and efficient workflows, omnichannel systems improve inventory control. Stock information is shared across the various channels and POS, reducing the risk of inventory waste.
The challenges of omnichannel eCommerce
Businesses will experience challenges with omnichannel eCommerce if they fail to implement their strategies correctly. Understanding the challenges of omnichannel eCommerce before moving to an omnichannel undertaking helps to prevent unnecessary expense and time.
The challenges of omnichannel eCommerce include:
- Not having the right technology. Relying on existing technology that doesn’t integrate across channels can lead to disaster when executing an omnichannel eCommerce strategy. A technological infrastructure is needed that ensures cohesive, accurate information across all channels.
- Poor inventory control. Products that are displayed as available when they are out of stock, or instore inventory that is unavailable for purchase online, is a sure-fire way to frustrate customers and lose them to competitors. The best way to overcome inventory challenges is to invest in an online inventory management system that automates inventory control and improves visibility of inventory stock levels across all channels in real time.
- Inconsistent pricing. Using or unintentionally displaying inconsistent pricing across eCommerce channels leads to consumer mistrust, which is bad for business. With consumers having a variety of channels to shop from, it’s important that consistent pricing is offered across all channels to build confidence and loyalty with your brand and improve sales.
- Failing to use customer data analytics. Thinking one size fits all is the wrong approach when communicating with omnichannel eCommerce customers. Collecting and analysing data from your channels promotes better understanding of the customer. Having a single source for consumer data provides a unified view of your customer that allows for more precise and personalised customer communications.
What makes a great omnichannel customer experience?
A great omnichannel customer experience is built on performance and consists of individual consumer touch points, across a variety of channels.
Key to this is:
- Responsiveness of platforms and the ability to seamlessly connect. Interaction between channels means customers can pick up where they left one and continue the customer experience on another.
- Speed and flexibility. Customers enjoy minimum processing time, with services that allow easy payment through a variety of options and rapid order fulfilment.
- Reliability and proactive communication. Ensure consumer touchpoints are optimised for each channel with a variety of customer support services that include live agents, chatbots, digital messenger platforms, and email.
The foundation of a great omnichannel customer experience is having a detailed understanding of your customer needs and preference. Advanced analytics can be used to process consumer data, behavioural insights gained through consumer interviews, observations, current research from market experts, and competitor analysis to gain a clear understanding of your customers’ expectations.
How to design an eCommerce omnichannel strategy: 4 Tips
A contemporary customer journey is a series of transitions between traditional and digital retail channels and can vary significantly by customer type. An effective eCommerce omnichannel strategy needs an extensive understanding of the shopping experience customers want and expect.
Therefore, the first step in delivering a successful omnichannel eCommerce strategy is to put yourself in the position of the customer. What is the customer experience you would like? How do you want to be treated? And what are the things that would cause irritation and dissatisfaction?
When designing an eCommerce omnichannel strategy, organisations should follow a sequential process based on four essential components:
1. Establish design principles that will achieve the right balance of speed, transparency, and interaction. Focus on consistency, clarity, and content design. Consistency is important across both aesthetic and interactive design to ensure streamlined customer service journeys. Communication to consumers should focus on conveying information in a manner that is easy to understand and that will achieve successful interaction and navigation across all digital and live eCommerce channels.
2. Design service journeys using the established design principles to ensure end-to-end journeys address identified consumer preferences and needs. Establish what customer wants and needs are being meet by using analytical data, social metrics, and by inviting customer feedback. Explore consumer behaviour both online and offline to garner a rounded understanding of your customers’ preferences. To ensure seamless journeys, consider each step a consumer might take to migrate across channels.
3. Introduce cross-functional collaboration across the business, including sales, marketing, warehousing, product development, and customer service teams. An effective omnichannel eCommerce strategy must adopt a culture of customer orientation across the entire organisation.
Establish and test interaction models to ensure they are delivering a seamless experience across all eCommerce channels. Responsive process redesign allows teams to respond quickly, improve transparency, and ensure frontline procedures align with key business objectives. Utilise the right technology to achieve this, and train employees on new processes to enable effective cross-team workflows.
4. Implement IT architecture that integrates and operates seamlessly across multiple software systems such as inventory, CRM, POS, sales, and customer management systems. Smart technology is crucial to the delivery of a streamlined, intuitive, and personalised user experience. IT infrastructure should support a seamless omnichannel experience with the flexibility to adapt to the customer’s preferences and other related aspects of their journey.
Two examples of omnichannel eCommerce success
Two examples of companies that have utilised the omnichannel eCommerce approach successfully are global leaders Amazon and Nike.
For smaller companies, it’s important to remember that the omnichannel eCommerce approach will vary according to the business’s industry, market segment and customers. However, the primary goal is the same: to ensure customers can seamlessly transition from one channel to another.
1. Amazon’s global omnichannel business
Amazon from its beginnings as an online book retailer in 1994 has become the largest omnichannel business globally by revenue.
The company uses a two-fold approach to its omnichannel strategy. Primarily it focuses on the customer experience, an undisputed fundamental of multichannel eCommerce success. They use data to create personalised, responsive interactions, regardless of the channel their customers favour.
They also ensure complete integration of channels at the back end – that is, integrating inventory and order fulfilment, and connecting customer data to satisfy preferences in whatever channel customers are found.
Amazon has developed self-service and eCare capabilities that guide customers to the channels best suited to their preferences. In addition they offer digital live interactions and company-initiated contact for those customers, who often seek out a live agent via the phone. Research supports the idea that both purchase experience and customer service are significant contributing factors to Amazon’s omnichannel eCommerce success.
2. Nike’s omnichannel strategy
Nike’s omnichannel strategy involves frictionless engagement for its customers via the Nike App introduced in 2018, and through the incorporation of immersive technology into their retail stores.
The Nike app boasts over 250 million users and has allowed Nike to exploit smartphones as the ultimate shopping companion. The app enables users to find and reserve items in store, access special offers or exclusive promotions through Nike Member Rewards, and scan barcodes for further information on products. And all of this can be done in store, using a smartphone.
Nike also successfully harnesses insights from data collected via their apps and interactive physical stores. Using real-time customer data, for instance, Nike found that large numbers of customers were doing yoga. They quickly designed and manufactured new yoga apparel, selling it through both online and in-store sales channels in best-practice omnichannel fashion.
Technology to automate omnichannel processes
Delivering exceptional customer experiences in omnichannel eCommerce relies on the ability to seamlessly serve shoppers across multiple channels and touchpoints. Technology to automate omnichannel processes is therefore crucial for connecting with audiences, improving customer experiences, and the delivery of goods for omnichannel eCommerce businesses.
Some of the numerous tools available to help automate omnichannel processes include:
- Email marketing tools to enable the automatic capture of new leads. The process of sending targeted email campaigns to leads is also automated via a pre-built and self-operating system – saving time, converting leads into paying customers, and improving the user experience through timely follow-up emails.
- Customer Relationship Management (CRM) software allows companies to stay connected to customers on an ongoing basis. CRM systems facilitate cross-channel engagement, enabling companies to connect with individual customers at the right time in their customer journey. Leveraging AI and chatbot services to create highly personalised customer experiences, CRM tools are vital to delivering outstanding customer service.
- Point-of-sale (POS) systems provide quick access to information from stock availability to customer purchasing history through loyalty or rewards programmes. An automated POS system streamlines operations by linking purchase orders directly to an order, provides a real-time view of inventory stock levels, and can connect directly to suppliers for automatic stock replenishment.
- Inventory management. Efficient inventory management is crucial for omnichannel eCommerce to optimise inventory control across all channels. Inventory management systems provide real-time visibility to avoid overstocking or understocking, ensuring eCommerce businesses can meet demand, no matter which channel a sale originates from.
- Order fulfilment and shipping software. Automated order fulfilment solutions will simplify fulfilment across channels and optimise logistical operations. Automating the process helps omnichannel eCommerce businesses to drive sales, increase customer satisfaction, and enhance supply chains – all while reducing labour and order fulfilment costs.
Smart-tech options to help automate omnichannel eCommerce integration across all systems are the key to omnichannel success and essential for seamless delivery. Integrated platforms automate the sharing of information between eCommerce stores, marketplaces, POS, CRM, and marketing software systems to achieve a smooth, unified customer experience regardless of where they are in their shopping journey.
How is inventory management key to an omnichannel eCommerce strategy?
Efficient inventory control is key to making an omnichannel strategy work effectively because it enables businesses to have a clear, real-time view of where inventory is throughout the entire supply chain, across all channels, and at any time.
It would be impossible to guarantee order delivery or plan product replenishment efficiently and cost-effectively without a robust inventory management system to monitor and automate inventory across multiple channels.