What is omnichannel retail?  And why it’s here to stay

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Forget focusing solely on bricks-and-mortar retail or e-commerce. An omnichannel approach is the future of shopping.


This story is part of our special series on improving customer service. You can also head straight to:

How to map the consumer journey

Meet the retailers offering seamless omnichannel service

5 omnichannel trends to know in 2021


Savvy business owners know that success isn’t about just bricks-and-mortar retail. Or e-commerce. Or even both. True success comes from being able to manage, communicate, showcase and sell across multiple channels simultaneously.


The pandemic has fuelled consumers’ vast appetite for online shopping and, as a result, understanding omnichannel has never been more important.


So, what is omnichannel retail?


Omnichannel retail puts the customer – not your product – at the heart of your approach.


“It’s a retail approach where every touchpoint – physical stores, online, social media – talks to each other in real time, with a live view of inventory,” explains Brian Walker of Retail Doctor Group.


And research suggests that an omnichannel strategy drives more sales, with a Harvard Business Review study revealing that the more channels a consumer uses, the more loyal to the brand they are, and the more likely they are to spend. In the US, Afterpay has found that omnichannel customers spend 72 per cent more than online customers. 


What is the difference between omnichannel and multichannel retail?


It’s easy to confuse multichannel and omnichannel retail; after all, they’re both about using multiple touchpoints to sell products.


However, omnichannel is a more sophisticated evolution of multichannel retail because all the touchpoints are synced up and ‘talk to one another’, explains Walker. “Multichannel retail is a more siloed approach.”


An example of an omnichannel retail experience


Sarah* sees a pair of shoes she loves on Instagram and goes online to research them. After comparing prices on Google.com, and then searching for availability on the brand’s own website, Sarah heads to the nearest store with her size in stock to try them on.


By then, it’s likely that – thanks to customer relationship management (CRM) software – the brand is aware that Sarah has been looking at this particular style of shoes. If she is already a loyalty programme member, the brand will have added this information to her customer profile. (If she doesn’t buy the shoes, the brand will automatically send her an email reminding her about them.)


When Sarah arrives in-store, she decides to buy the shoes and the purchase is added to her loyalty programme customer file. A couple of weeks later she receives an email from the brand, which has used artificial intelligence to determine other items she might like, to promote further products. Sarah may also be served ads for these items via Instagram.


What does omnichannel retail look like?


As well as consistent pricing and branding across all channels, great omnichannel retail includes capabilities such as:


·  Offering click-and-collect or curbside pick-up.

·  Allowing customers to search for in-store products online or on mobile, including stock availability.

·  A shared cart across channels for logged-in shoppers (such as mobile to desktop).

·  A loyalty programme that operates across channels.

·  Cross-channel product returns; for example, buying online but returning in-store.

·  Endless aisle capability (which means that bricks-and-mortar retailers don’t carry as much stock, but items can be ordered online).


Why has omnichannel become so important?


The founder and CEO of Retail Express, Aaron Blackman, says that although the concept of omnichannel retail has been around for a while – with retailers long aspiring to provide a seamless online and in-store experience – the pandemic has accelerated the trend.


“In the space of less than a year, COVID-19 has rapidly created a demand on retailers to deliver online-centric shopping experiences and introduce fulfilment processes that are no longer ‘nice to have’ – but are central to meeting customer expectations for safety and convenience,” he says.


Click-and-collect services, virtual appointments and other initiatives that retailers rolled out in response to social distancing have been eagerly embraced by consumers. And retailers can expect more developments in the omnichannel space.

Organisations that can be agile and pivot quickly will lead the future growth of our industry.

- Erica Berchtold, CEO of The Iconic

“If 2020 has taught us anything,” says CEO of The Iconic Erica Berchtold, “it’s that those organisations that can be agile and pivot quickly will lead the future growth and direction of our industry.”


Omnichannel retail means ‘always open’


Anesley Clarke, the CEO of B2C Furniture, which makes environmentally conscious homewares, says there is a common misconception that as online sales increase, in-store sales decrease. But this is far from the truth, he says.

Everyone shops differently and, to capitalise on that, you need to cater to it.

- Anesley Clarke, CEO of B2C Furniture

It’s foolish to believe there is a single road to success,” explains Clarke. “Everyone shops differently and, to capitalise on that, you need to cater to it.” 


The key is being ‘always on’ for shoppers. “Consumers want more than just a tap-and-go transaction,” he adds. “They want to feel engaged and awakened by the connection to your brand. They want a meaningful experience that ignites a rewarding feeling by association with you.”


Consistency is key


Ultimately, omnichannel means delivering a consistent brand and customer experience, regardless of where the customer wishes to engage with your business, explains Shaun Johnson, co-founder of chatbot business Maisie AI.


Too often, he says, retailers don’t really engage with customers. They market to them, which is a one-way conversation.


In reality, customers typically interact with retail brands across multiple channels. They ask a question on Instagram, purchase something on your website, and then pick up in-store, he explains.


“Retailers who aren’t offering a true omnichannel experience will suffer from lower conversion rates and a sub-optimal customer experience, which can lead to reduced loyalty and retention, and lower net promoter scores,” warns Johnson. “The fact is that consumers are now much more likely to order online and pick-up in-store.


“When people visit a website, they’re pretty much left alone to work it all out themselves,” he continues. “They often have questions before they buy but, in many cases, no-one is there to help them. That’s a bad customer experience that leads to poor conversion and high return rates.” And that’s where chatbots like Maisie can come in, he adds.


How to get started with omnichannel retail


Want to explore omnichannel retail?


1. The first step is mapping your consumer journey, which will help you understand how customers discover your brand and its products, and then identifying all the relevant touchpoints.


2. Next, you’ll need to evaluate whether your brand approach is consistent across all these touchpoints.


3. The final step, says Walker, is to consider your point of sale, customer relationship management and inventory technology – and then ensure they are all working in sync.


*Not a real name.


Nina Hendy is a business journalist who writes for The Sydney Morning Herald, The Age and more

  • All references to any registered trademarks are the property of their respective owners. Afterpay does not endorse or recommend any one particular supplier and the information provided is for educational purposes only.