28 February 2022
How an omnichannel strategy can pave the way to retail success
Offering a compelling omnichannel customer experience is now a must for retail brands to grow and thrive in an increasingly competitive market. More than a third of Americans have made omnichannel features, such as buy online and pickup in store (BOPIS), part of their regular shopping routine since the start of the pandemic. And nearly two thirds plan to continue doing so in the future (McKinsey). Gen Z and millennials are the most enthusiastic age groups when it comes to new ways of shopping and increasingly evaluate brands on the seamlessness of their experience (McKinsey).
Many retail executives have had to re-think their strategies and have changed their top priorities as the pandemic has led them to move their investments towards a digital-first and omnichannel go-to-market model. Nevertheless, the lack of clarity over the benefits of an omnichannel strategy is driving some businesses to slow down their omnichannel efforts.
So, the question remains: what are the benefits of omnichannel retail?
McKinsey research shows that more than half of global consumers engage with three to five channels while on a journey to acquire a product. They might see the product for the first time on social media, research possible alternatives on search engines and finally complete the purchase at a bricks-and-mortar location. Thus, having a broad and consistent presence across multiple channels helps retailers to generate product awareness and drive traffic to their website and store. By leveraging multiple touchpoints, retail brands can reach out to new audiences while retaining existing customers.
Consumers want to choose how to engage with brands, for example through apps, websites, in-store digital touchpoints and social media, so retailers who can meet this preference experience higher customer retention and sales. Indeed, the omnichannel consumer spends on average 15 to 30% more than a single or a multi-channel consumer (Vincle).
Improved customer lifetime value
Over the last two years, the demand for omnichannel fulfilment has accelerated substantially. According to IDC’s customer insights survey, consumers prefer to buy from retailers that offer BOPIS (58%), curbside pick-up (49%) and same day delivery (41%) (Oracle). Retailers who can blend the offline and online worlds effectively, using technologies such as location-based marketing, virtual reality and chatbots, are able to meet customer expectations of a seamless and connected shopping experience, delivering higher engagement and customer lifetime value.
In fact, 53% of leading European retailers consider improving lifetime customer value a major reason to implement an omnichannel strategy (Coresight). Having greater customer lifetime value is fundamental for retailers to better understand, target and serve their audiences and to engage with them efficiently while creating value.
Enhanced data collection and analysis
An omnichannel strategy enables retailers to gather more customer data from multiple touchpoints and analyze consumer profiles, preferences and behaviors to have a better understanding of their customer base. As a result, brands can map out customer journeys more accurately by identifying how customers engage with them each step of the way, as they move through the awareness, consideration and purchase stages.
Having an in-depth overview of the customer journey allows retailers to make data-driven decisions and enables them to offer their target audience relevant and personalized content across all interactions, leading to greater engagement and satisfaction. In fact, 78% of consumers say personalized content increases their purchasing intent (Outgrow).
A blended online and offline shopping experience
The new digital consumer combines online and offline interactions throughout their journey. Despite the surge of online shopping, the role of bricks-and-mortar stores remains crucial. While 63% of shopping journeys start online, 46% of global consumers still want to shop in person (The Drum). Thus, retailers are adopting omnichannel business models to meet customer expectations and offer superior customer experiences both online and offline, bringing digital elements into their stores and complementing their ecommerce shopping experience with offline features.
For example, some retailers are opening stores where consumers do not need to queue to pay for items but are charged automatically via mobile apps with the help of in-store sensors and cameras. Others are launching virtual shopping events where consumers can ask questions on the product they are interested in and engage with the brand in real time. In this way, retailers can collect and unify online and offline customer data to create personalized experiences that quickly meet evolving customer needs and wants.
Today, an omnichannel retail strategy represents a great opportunity for businesses to thrive despite increasing challenges brought about by a competitive and fast changing market. As consumers progressively connect and engage across multiple touchpoints before making a purchase, it has become crucial for retailers to adopt an omnichannel model that merges the offline world with online one to boost sales and increase customer satisfaction.
Retail brands can leverage the power of an omnichannel approach to collect data across multiple channels and create personalized offerings and recommendations that will help to deepen the relationship with their audiences. As customer trust grows, brands will increase their chances of developing and retaining a loyal and more cost-effective customer base.
THG Ingenuity has helped many retail brands like Homebase and Orlebar Brown connect and engage effectively with local and global audiences via an omnichannel approach. Get in touch today for more information on how to optimize your omnichannel strategy.