Retail businesses have had a shift in strategies over the years with them having to try different ways of staying competitive in today’s market. An omnichannel retail strategy’s main goal is to improve customer experience by integrating multiple channels into one streamlined shopping experience. This combines the power of both online and offline retail by synchronizing their inventories. Retailers can then offer in-store pickup for online purchases and integrate mobile apps to help with this.
A successful omnichannel retail strategy is more than just that, as it integrates customer engagement and operational solutions that range from in-store digital signage to ecommerce platforms. Consistency across the boards is needed to ensure that the strategy runs smoothly with no hiccups, so it’s important to have a proper plan in place.
Throughout this article, we will explore how your retail business can utilize omnichannel strategies to improve the efficiency of your operations and increase overall profitability.
Exploring the Channels
When it comes to retail strategy, there are three main types of channels; single, multi and omni. Each of these will offer retailers different shopping solutions and alternative experiences for customers. Let’s take a look at them all individually:
Single Channel Retail
This is the strategy of selling products through one type of sales channel. This can be traditional in-person retail, online stores, online marketplaces like Amazon or social media shops like on TikTok and Instagram. This strategy is often the baseline for starting your own business, as a lot of start-up companies can only afford one channel retail when first getting started. While this strategy can generate success, the multi and omni channels seem to be much more catered to the digital era.
Multi Channel Retail
This is essentially selling products through multiple channels, both through online and offline methods. It’s important for retailers to have a strong online presence but also make customers aware of where their physical stores are located. Retail businesses can reach out to customers via social media or email to boost their online visibility while also promoting their in-person locations. It’s a great first step for increasing customer engagement with your brand.
Omnichannel Retail
Similar to multi channel retail, this strategy involves selling your products on multiple channels and platforms. The multi channel retail strategy lays the foundation of which omnichannel is built on. The main difference between the two is that omnichannel connects all of the channels for a fully integrated experience for shoppers. It allows for the creation of unique customer profiles as all the information across the different platforms can be combined together.
With this retail strategy, customers can find and purchase whatever they want whenever they need it through any channel that best suits them. Some of the main channels used in an omnichannel retail strategy include social media, e-commerce, emails, online marketplaces and physical stores.
Omnichannel Retail Strategy Benefits
Competitive Advantages
Most people are omnichannel themselves as they are very likely to shop on both online platforms and in-person, so it makes sense to take advantage of this by using an omnichannel strategy. In fact, 4 in 5 customers who shop in physical stores will browse online for the products and usually make some form of decision before visiting the store. This means that during a single shopping session, customers are very likely to use more than one channel.
Being able to offer an omnichannel form of product sales will give you a competitive advantage over retailers that don’t use the strategy. It ensures that no sales opportunities are missed, as customers have various ways to purchase your products.
Higher Customer Retention
Omnichannel retail will provide a much better shopping experience, which will result in a higher customer retention rate. Having one bad experience can put a shopper off a brand for life, so retailers need to keep customers satisfied. It could be argued that retaining your existing customers and making sure they revisit your brand repeatedly is much better than acquiring new customers, as it leads to more regular profits.
Higher customer retention can also lead to other advantages, such as lower marketing costs, enhanced brand reputation, elevated sales forecast, greater customer feedback and a stronger competitive advantage.
Increased Engagement and Sales
A successful omnichannel retail strategy should lead to an increased customer engagement and more sales. Creating an environment where customers can engage with your business through a variety of methods increases the likelihood that they will be more engaged with your brand, as you offer them a larger channel range.
Retailers that use an omnichannel strategy with three or more channels will usually outperform single or two channel campaigns by around 250% in terms of customer engagement. That is why shopping centres have started to include more physical stores that also have other channels for customers. The shopping centre in Leeds has been very proactive with this.
Customer Loyalty
Building a relationship with customers is very important for retail brands, as it helps create a more loyal customer base. Omnichannel retail usually results in customers spending more per single transaction, as they want to support the brand they have built a relationship with. Customers who feel connected will spend around double that of those who don’t.
Your retail business will generate more sales with a loyal customer base and omnichannel customers will have a five times higher lifetime value for your business. This is the net profit attributed to the entire future customer and brand relationship.
Improved Operations
The operational efficiency of a business will improve significantly from a successful omnichannel strategy, as despite there being multiple channels of data it only needs to be processed once as they can all be combined. This increase in efficiency will lead to lower operational costs too.
The more you keep customers satisfied and the more they return to your brand, the easier the process of operating the business becomes. It all comes down to building initial trust with customers through methods such as strong advertising, word of mouth promotion and improving customer experience.
