Retailers have struggled to adjust to changes in the industry caused by COVID-19. Even as we are moving towards a post-COVID world, we still aren’t completely sure what that will look like. One of the best ways retailers can rise to the occasion and prepare for the future is to embrace omnichannel retail.
Here’s what you need to know about this concept and how you can effectively utilize omnichannel retail for your business:
What Is Omnichannel Retail?
Omnichannel retail involves conducting retail operations throughout various channels. For instance, you can conduct retail operations online and in person. While this may seem straightforward, omnichannel retail is so much more than just randomly utilizing a few different channels to make sales. Instead, it requires a more strategic and integrative approach.
Why Is Omnichannel Retail Superior?
While omnichannel retail may not be easy, it’s worthwhile. This is because omnichannel retail is superior to a single channel or even multichannel approach.
- Omnichannel strategies help you meet your customers where they are. These days, customers aren’t just going to come to you. Instead, you need to go where they are to make their lives easier and more convenient. With today’s technology, customers have come to expect an easy purchasing process. If you’re not able to offer this, they are going to look elsewhere.
- Omnichannel strategies help you stand out amongst tons of other retailers. It’s no secret that retail can be a crowded space. As a result, it can be hard to compete with large and more established brands. However, with an omnichannel approach, you can meet the needs and expectations of your customers better than the competition.
- Omnichannel strategies help provide you with valuable data and analytics. The more channels you use, the more information you’re able to gather from each one. When you put all this data together, you can make beneficial business decisions that you otherwise wouldn’t be able to make without these insights.
What Are the Four Pillars of Omnichannel Retail?
You need to know about the four pillars of omnichannel retail: sales channels, marketing channels, operations, and shipping and fulfillment. Here’s what you need to know about each of these pillars so that you can build an effective omnichannel retail strategy:
Pillar 1: Sales Channels
There are countless sales channels out there for you to choose from — and the good news is that you don’t have to choose just one. In fact, for a true omnichannel approach, you need to have multiple sales channels.
If you’re an online business, your most important sales channel will probably be your online storefront through platforms like Shopify. If you’re a brick-and-mortar store, your most important sales channel will probably be your actual storefront.
That being said, you shouldn’t limit yourself to these obvious channels. Instead, you need to expand to others so that you can reach more potential customers. For instance, you may want to consider using ecommerce marketplaces like Amazon, social media platforms like Instagram or Facebook Shops, or a mobile application.
Pillar 2: Marketing Channels
In addition to your sales channels, you also need to think about the marketing channels you’re using to get the word out about your incredible products. Again, there are many options to choose from here, depending on your brand and your customers.
If you have a hip and happening brand that caters to a younger demographic, you need to be on hip and happening marketing channels like TikTok and Snapchat. On the other hand, if you have a sophisticated brand that caters to a more mature demographic, advertising on places like Google, Facebook, or Instagram might be the right approach.
Pillar 3: Operations
Omnichannel retail doesn’t just involve visible components. For your channels to seamlessly work together, you also need to invest in operations. Managing orders and inventory coming from multiple different channels can be overwhelming and inefficient without the right approach.
For this reason, it’s important to invest in technology that’s compatible with an omnichannel approach. For instance, you may need an inventory management tool to track your inventory across all the different channels. The good news is that tons of tools out there will make your transition to omnichannel simple and straightforward.
Pillar 4: Shipping and Fulfillment
Finally, shipping and fulfillment is an essential pillar of omnichannel retail. Again, it can be difficult to manage shipping and fulfillment when orders come from several places. For this reason, many retailers choose to utilize a third-party logistics (3PL) company to handle these areas.
Not only do 3PLs handle shipping and fulfillment, but they can also handle things like inventory management and warehousing. And while this may seem like a costly option, it could end up saving you a lot of time, effort, and money. This is because 3PLs often have negotiated rates with carriers to reduce your shipping costs. You can also usually share warehouse space to cut down on those expenses as well.
How to Implement an Omnichannel Retail Approach
So how can you implement an omnichannel approach to retail and start benefiting from it? Here’s what you need to do:
1. Start With Segmentation
Many retailers make the mistake of generalizing all of their customers. Instead of generalization, you need to try segmentation. Your customers are all different and will likely fall into different groups. When you’re able to segment your customers, you can better serve them and meet their needs.
Here are some of the different ways that you can segment your customer base:
- Income range
- Generation
- Geographic region
- Online engagement and behavior
- Values
- Brand loyalty
For instance, you can segment customers based on their brand loyalty so that you can reward your most loyal customers with exclusive offers and content.
2. Learn About Each Segment
After you have segmented your customers, you need to learn more about each segment to utilize the right channels for each one. For instance, if you have segmented customers based on generation, the channels used by a Baby Boomer would look vastly different from the channels used by a Millennial.
You want to meet customers where they are, and to do that, you need to find out where they are! You can conduct surveys or just track KPIs to make these determinations.
3. Map Out the Customer Journey
From there, you need to map out the customer journey since it’s usually more complicated than you realize. Customers rarely find a brand or a product and immediately purchase it. Instead, it’s more complicated and drawn out than that.
For instance, let’s say that a customer searches for a product on Google. They check out a few different websites — some that came up organically due to SEO efforts and some used paid advertising. While they don’t make a purchase immediately, they start seeing retargeting advertisements on their social media accounts from one or more companies.
Perhaps one of the retargeting advertisements included a discount coupon for signing up for email alerts. They then check out customer reviews for this brand. Eventually, they see via email that the brand is now running a sale on the product they were interested in. At this point, they’re ready to make the purchase.
4. Prioritize Customer Support
Once you better understand the customer journey, you can focus on converting customers at various stages throughout this journey. One of the best ways to encourage conversions is to invest in your customer service efforts.
Let’s say that a customer has done their research but has questions about your size chart or return policy that they’re unable to find on your website. Offering customer service options like live chat or chatbots can help answer their questions promptly so that they feel confident making a purchase.
5. Integrate Your Channels
Finally, all of these channels need to be integrated for a seamless customer experience. It’s not enough to just utilize multiple channels; you need to integrate them for them to be considered “omnichannel truly.” There are various software tools out there that can help you do just that. Or if tech isn’t your thing, go with a human expert instead, like Greg Gillman.
Final Thoughts on Omnichannel Retail
While implementing omnichannel retail strategies may not be easy, it’s certainly worthwhile. However, if you’re looking for an easier solution, you should consider outsourcing to experienced professionals like Greg Gillman.
Greg Gillman specializes in omnichannel growth strategies for direct-to-consumer brands and has generated $4 billion in revenue for his clients. Reach out to him to see how he can help you reach your customers.
Sources:
Omnichannel Retail Simplified | Shopify
14 Effective Ways to Segment Customers | Forbes
Using Customer Journey Maps to Improve Customer Experience | Harvard Business Review
