Viewing new furniture in the local store, buying from the retailer's online store from their smartphone after thinking it over, and reaching support via WhatsApp - customers expect a seamless fusion of online and offline channels today. Companies must respond: the future belongs to omnichannel retail. We explain why it is not enough to be present on all channels, what advantages omnichannel offers and present examples of successful company transformations.
Definition: What is Omnichannel?
Omnichannel refers to the linking of all of a company's sales and communication channels with the aim of providing customers with a consistent purchasing experience, achieving rapid purchase transactions, and improving customer loyalty.
Customer behavior and interests are collected on a data basis at various touchpoints and are also available in all other channels. In omnichannel retail, a customer can switch from one channel to another at any time and continue his customer journey smoothly - if companies proceed strategically.
Omnichannel vs. Multichannel – What Is the Difference?
It has become standard practice for companies to operate online stores and be active on social media in addition to stationary stores. Companies have been operating multichannel retail for decades: they try to bring their products and their messages to their potential customers on as many channels as possible. In the past, however, the different channels were usually not coordinated with each other.
What Does Multichannel Mean for Customers?
The online store's marketing then pursues its own goals and develops campaigns independently of stationary retail. A Facebook ad for an event in the store? An e-mail campaign offering a useful additional product after a purchase in the retail store? Not practicable in multichannel retail.
In corporate groups, the approach can lead to the point where local store prices don't match online retail prices. Customers who notice this feel deceived. The company loses trust and reputation.
Not only do the activities in the individual channels remain separate, but data about customers and their behavior do not merge, so that customers start their customer journey from scratch on each new channel, unlike with omnichannel retailing.
What Does Omnichannel Mean for Customers?
The omnichannel approach is holistic: all business channels are linked. With the customer's consent, data about him is stored so that he receives a consistent and personalized purchasing experience from the very first moment of contact. Regardless of whether they contact the company from their smartphone, in a retail store, or in an online store.
An example: Max wants to buy a new bedroom wardrobe. He looks at a few models in the online store of a local company. Later, he receives an ad on Instagram for similar products from the brand. He decides to look at his favorite in the stationary store. He has the goods delivered to him. Since he doesn't have any cash on him, he pays via an app. He receives an announcement about the delivery via email. When he contacts customer support via WhatsApp about a missing accessory, they are able to immediately assign his concern and help him in a straightforward manner.
Advantages of Omnichannel Retail
Regardless of whether companies (want to) exclusively serve different online channels or offline and online channels in combination, there are many reasons that speak for omnichannel retail.
Meeting Customer Expectations
Today, companies simply can no longer afford to pursue a single-channel strategy. Customers expect to be able to switch spontaneously between digital channels and offline experiences. According to the Salesforce Connected Customer Report, the overall experience of a brand can even be more important than the actual product.
Higher Sales and Stronger Customer Loyalty
Channel networking reduces purchase abandonment and increases sales. It also makes it possible to stay in touch with customers beyond the initial purchase and thus realize further sales.
Better User Experience
The omnichannel strategy not only ensures a uniform external brand presence and easy orientation for the user. Thanks to precise knowledge of customer behavior, their questions and problems can be clarified more quickly by support and they can receive personalized offers.
Agility and Flexibility
Technological developments also make it risky to focus on just one or a few channels, because channels that are strong today may become less important in the future. Those who pursue a holistic omnichannel strategy recognize trends earlier and can flexibly redirect.
Challenges in Omnichannel E-commerce
The key to success in e-commerce is networked product and customer data. Those who best know and serve the wishes of their (potential) customers can set themselves apart from the competition. Omnichannel retail promises to provide precisely this knowledge advantage. However, to achieve this, companies need the right technological, procedural and organizational basis: all systems must be networked. Data must be able to flow freely. It must be maintained and regularly analyzed. Departments must have cross-channel access to information and focus on the customer.
A key element is the synchronization of product data: In order to display correct stock levels in all channels in real time, ERP system, online store further systems must be connected. The more source systems there are, the more challenging the integration. However, it is essential for an optimal user experience. If the description in the online store does not match the stored product, or if the goods are not in stock despite being displayed in the warehouse, there is a risk of customer complaints. This results in returns and avoidable costs for the company.
Once the basic infrastructure is in place, companies should create customer profiles using analytics tools. In addition to master data such as address or telephone number, customer profiles ideally list purchases at all touchpoints. A customer's behavior in digital channels, depending on consent, is also recorded in detail. The synopsis of behavioral and product data provides valuable information that can be used for personalized marketing campaigns, optimization of the product range, and customer service.
Omnichannel Example in the Company
An omnichannel strategy makes sense for companies of all sizes and in all industries. How the networking of the various sales and communication channels appears in company practice differs significantly. Over the past few years, Parsionate has successfully provided strategic support to a number of companies in their transformation to omnichannel retail. Here are a few examples.
Sportscheck, as one of Germany's leading sports retailers, is known for its strong retail business, but also sells through its online store. A few years ago, the company decided to switch from a multichannel to an omnichannel strategy. Parsionate supported Sportscheck in setting up a central product database and a PIM solution for the entire DACH region.
The Klingel Group is one of the largest mail order companies in Europe. In the past, the catalog was the leading medium, today the online stores are the most important sales channel. In 2012, the group decided to switch to omnichannel retailing. Parsionate integrated a powerful PIM system into the existing IT landscape.
The wine merchant Hawesko is number one in the mail order business for high-quality wines, champagnes and spirits. Although digital channels are the sales engine, classic distribution channels such as the catalog are also maintained. Customer expectations finally motivated the management to pursue an omnichannel strategy. Parsionate supported the company in adapting its data management.
Frequently Asked Questions About Omnichannel
New omnichannel retail trends are constantly emerging - especially in digital. Since the Corona pandemic, digital channels have become even more important in the omnichannel mix. 70 percent of local retailers have initiated or increased digital activities. Another trend, according to Venturebeat: videos on social media platforms, through which companies link directly to products in their online stores. Tiktok has already rolled out this feature for an initial user group.
An omnichannel customer experience is the result of a successful omnichannel strategy: customers can always switch touchpoints spontaneously and situationally and experience a personalized and consistent brand presence so that they can easily find their way around. They continue their customer journey seamlessly, regardless of device and channel.
Before companies introduce new IT solutions, they should analyze their customer base. Which channels are in demand? How do customers want to communicate? They should also test the current data flow and the possibilities for integrating existing systems. This enables them to identify where action is needed and successively improve the omnichannel experience for customers and internal data management.