The term “omnichannel retail” is one you’ve no doubt heard over the past few years. But what exactly is omnichannel , and why and how should you operate an omnichannel business?
Defining Omnichannel Retail
Omnichannel means that all channels through which a retailer sells — physical stores, website, mobile app, and catalog — operate as one cohesive unit instead of as disparate entities. Consumers enjoy the same shopping experience across all channels. For example, if you were to follow an omnichannel retail model, the assortment of items presented on your website would be identical to the assortment of items available through your mobile app and your stores.
Additionally, with omnichannel retail, consumers’ in-store and online experiences needn’t be mutually exclusive. Savvy consumers are empowered by digital purchasing information, but they also want a human, physical connection — a connection they can get from the omnichannel model.
Similarly, consumers could begin their shopping in one channel and finish it in another. They might order merchandise via a mobile app and pick it up in-store, or select and pay for an item at one store, then retrieve it at a different location or have it delivered from another store or a distribution center because it is out-of-stock at the store they originally visited.
The “Whys” of Omnichannel
There are several reasons you should seriously consider omnichannel retailing. Most significantly, consumer behaviors and preferences are changing. If your store does not offer the merchandise they want, when they want it, and if it does not afford them the purchasing and delivery flexibility described above, they won’t hesitate to defect to the competition. They may even find that competitor on a mobile device while standing in the aisles of your store.
Consumers are becoming more accustomed to shopping online and their expectations are that all retailers can provide easy, convenient online shopping, as well as a consistent experience when it comes to availability, pricing, and service when they shop in that retailer’s physical stores. Not meeting these expectations can lead to disappointed customers and lost sales.
Practicing Omnichannel
To do omnichannel retail right, you’ll need a point of sale (POS) system that gives you a singular view of SKU-level inventory across all stores and channels. Ideally, customers should also have access to this information. Suppose a consumer is shopping for a red skirt, and it’s out of stock online. Instead of trying another retailer that may have the skirt available, this consumer could, by leveraging an inventory availability function within your un-siloed POS system, discover that the skirt is on the rack at a nearby store — thus saving the sale. Without such information, you would be likely to lose that sale.
Your POS system should also be configured so customers can take advantage of such omnichannel retail options as “buy online, pick up in-store,” “buy online, return in store,” and “buy in-store, deliver from distribution center (or another store),” which can add new revenue streams. Additionally, you’ll need tablets or other mobile devices for store associates to pull up customers’ purchasing histories and engage in suggestive selling that can increase average sales. This supports the omnichannel principle of treating shoppers to the same experience they enjoy on your website, through your app, or when purchasing from your catalog by telephone — i.e., receiving recommendations based on their preferences and past purchases. Mobile devices also support omnichannel by enabling you to share detailed product and product availability information with shoppers at the point of decision, thereby increasing the likelihood that they’ll purchase a desired item or items from your store rather than elsewhere.
The benefits of omnichannel can’t be ignored. Adopting an omnichannel retail model can help you meet customer demands and expectations, as well as finding new ways to appeal to new customers, boost conversion rate, and increase sales. Even if you are selling on multiple channels (multichannel retailing), the omnichannel model brings cohesiveness to the customer experience that will give you a more competitive edge.
