How to Successfully Implement an Omnichannel Retailing Strategy

10 June 2014
Omnichannel, multichannel, showrooming – the list of buzzwords for the probably most significant change in the retail industry is steadily increasing.

We are in a period of transition and innovation. The tremendous rate of innovation in omnichannel retailing is closely linked to the technological advances of e-commerce and mobile. Consumer behaviour and psychology certainly play a major role in the paradigm shift from single channel to multichannel.
The challenge for retailers is to create a consistent, seamless customer experience across all channels, be it the Web, bricks-and-mortar retail stores or mobile devices. Consumers’ demands are not very complex: they just require a consistent dialogue and integrated business processes. In other words: customers don’t understand why they may return goods that have been purchased online free of charge whereas if they purchase a product in-store, they need to drive back to the store to return it, they can’t return it online.

Technology as driver for omnichannel

Many retailers have already embraced multichannel shopping and have aligned their business operating models with the new strategies. They sell through multiple, but distinct channels. Customers can choose between several sales channels but each channel – online, smartphone, catalog, in-store – operates independently. Goods bought online cannot be returned in-store.
Omnichannel retail experience is about delivering a seamless, integrated experience across all channels: Customers may use all distribution channels consistently and initiate any kind of transaction at any channel. Studies by McKinsey have shown that cross-channel shoppers spend approximately four times more time in a retailer’s shop than single-channel customers.
Before 2007, all phones had buttons instead of touch screens. You had to own a television to watch TV, and check your email on a computer. That was before the introduction of the smartphone and the tablet. Although there were already some smartphones on the market, the Apple iPhone sparked a revolution in e-commerce and m-commerce. The iPad followed in 2010. Integrated location-based services opened up a whole new range of possibilities for e-commerce and logistics services, which have gradually become, in recent years, an integral part of our daily life.
More and more Europeans surf the Internet, download movies, music or software and order products online. A European Commission study predicts that, by 2016, 78% of the European population will have regular access to the Internet via WiFi hotspots and broadband networks.
This non-stop access to e-commerce sites, emails, product reviews, and social media is omnichannel’s main driver. It changes the way people behave, shop and interact with each other.

Changes in user behaviour

People yearn to get things done immediately. With innovations such as the instant camera, the microwave and the smartphone, immediacy was the key success factor. Psychological studies have shown that people are growing ever more impatient. With every second of latency before a Web page loads, the abandonment rate rises considerably.
Not only impatience, but also consumers’ expectations in terms of convenience when shopping online or via mobile are steadily increasing, especially when it comes to quality of product data, search and navigation functionalities, product reviews, payment methods and shipment.

Ease-of-use and the shopping process

Not all shoppers are equal. Regardless of the shopping touchpoint – online or in-store – the shopping process can always be subdivided into the following phases: Product selection, decision-making, checkout and payment, shipment.
According to a case study by Accenture, 90% of consumers said that they especially valued how convenient a distribution channel was. Thus, practices like showrooming and price differences have less of an impact than ease-of-use and user-friendliness of a shopping process.

What retailers can actually do

  • Embrace mobile technology: Optimize your website to support mobile devices and make sure that all transactions and services work across all channels. Check if you can improve your service in physical stores with mobile solutions. Provide customers and your staff with mobile tools and apps to help them access products, coupons and discounts. Check if you can link inventories of different stores to improve delivery capability.
  • Pay special attention to product prices: Price comparisons are only a click or two away. Therefore, price inconsistencies are more problematic than ever. 75% of shoppers between the ages of 18 and 34 admitted comparing prices using their mobile devices when shopping in physical stores. Track prices using Price Intelligence solutions.
  • Recognize customers across channels: Implement a consistent solution for your client master data administration. Identify ways of tracking clients and client behaviour in-store.
  • Connect on a personal level: Storing a customer’s purchasing history and recommending similar products is no longer enough. Increase customer loyalty through a detailed segmentation. Here’s an example from a mail-order retailer: Opening a parcel is an intense and haptic moment for a mail order customer. Retailers only have these few minutes to connect with the customer. Instead of enclosing standard inserts, address your customers personally and include personalized offers.
  • Seek the right business partner: Not every company has the resources and capabilities of Amazon, Otto and Zalando. You should look for the right partner and solutions to optimize your offer. Don’t try to implement everything by yourself.



Also published in Versandhausberater Spezial Nr. 04/2014, 06.06.2014

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