By: Larisa Bedgood
In the digital era where consumers are just as likely to purchase online as in a brick-and-mortar location, delivering a seamless channel experience has become the new competitive imperative. Retailers are ramping up their investments in omnichannel and multichannel strategies to deliver exceptional experiences, wherever and whenever today’s consumers choose to interact with brands.
Omnichannel is an approach to marketing and retail that utilizes multiple communication channels to reach customers. The key is that all platforms need to be aware of the other to facilitate a seamless experience. The customer is the focus, and they need to be able to switch between channels quickly and efficiently, getting the same information and experience wherever they go. Unlike multi-channel marketing approaches, each channel in an omnichannel strategy intuitively knows how a customer interacted with another channel, which is used to help guide and continue the customer experience.
As new technologies and channels emerge, it is becoming increasingly important for retailers to extend the brick-and-mortar experience to their online channels. Having a presence online and offline has practically become a requirement for some shoppers to even consider buying or using your product. In fact, Forrester Research projects that online retail sales are expected to outpace brick-and-mortar sales this year, reaching an estimated $370 billion annually.
More consumers are demanding an omnichannel shopping experience, from buying a product to returning it. Forbes reports that 98 percent of people believe that purchase, delivery and returns should be easily available across multiple channels. This shift towards omnichannel shopping is not only in-demand though — it’s increasing profits and retaining customers for the retailers that embrace it. According to a report by IDC Retail Insights, retailers utilizing multiple channels in their marketing and retail saw an increase between 15 and 35 percent in average transaction size, along with a 5 to 10 percent increase in loyalty customers’ profitability.
Research by Harvard Business Review further validated these findings. They studied the behavior of over 46,000 customers. Of the study participants, only 7 percent were online-only shoppers and 20 percent were store-only shoppers. The remaining majority, or 73 percent, used multiple channels during their shopping journey.
According to the study, “The study’s results show that the retailer’s omnichannel customers are more valuable on multiple counts. After controlling for shopping experience, they spent an average of 4 percent more on every shopping occasion in the store and 10 percent more online than single-channel customers. Even more compelling, with every additional channel they used, the shoppers spent more money in the store. For example, customers who used 4+ channels spent 9 percent more in the store, on average, when compared to those who used just one channel.”
In addition to having bigger shopping baskets, omnichannel shoppers were also more loyal. Within six months after an omnichannel shopping experience, these customers had logged 23 percent more repeat shopping trips to the retailer’s stores and were more likely to recommend the brand to family and friends than those who used a single channel.
Retailers Struggle to Deliver
However, retailers are struggling to deliver. According to a survey by Periscope, a unit of McKinsey Solutions, retailers are struggling to move at the speed their consumers want and need. Periscope’s survey found 78 percent admit there is no one brand experience across their channels but acknowledge that “a well-defined cross or multi-channel strategy” is the top innovation that would drive digital growth (64 percent).
The report went on to state the reasons behind the omnichannel struggle as follows:
- 39 percent stated that their digital channel alone was suffering from “a lack of internal coordination”, but looking at the broader omnichannel strategy, when asked about their top three challenges the following responses were given:
- Lack of customer analytics across channels (67 percent)
- Siloed organization (48 percent)
- Poor data quality (45 percent)
- Inability to identify customers across shopping trips (45 percent)
Omnichannel Retail Demands a Customer-Centric View
Putting customers at the center of your retail strategies demands a real-time, 360-degree view of your customers’ behaviors. Interacting with customers across multiple channels produces a wealth of data. However, these insights need to be cleansed and integrated into a singular customer view to have value.
Overall, data integration remains a challenge, according to a recent Forbes Insights report, Data Elevates the Customer Experience: New Ways of Discovering and Applying Customer insights. Only 36 percent of executives say they have attained real-time, highly integrated capabilities across all the customer channels within their enterprises. At this point, just half of even the most highly data-driven CX organizations consider themselves to be highly integrated. For the most part, information is managed centrally, as reported by a majority of executives. Only 14 percent of executives are able to report that their data is structured on a cross-functional, synchronized basis.
To achieve this real-time customer view, retailers must implement a data management platform or cloud solution to unify fragmented data in real-time. Consumers are constantly producing data about their likes and dislikes, channel preferences, product choices, and more. This behavioral data is fragmented across website visits, email opens, social interactions, forms completed and purchases, and more. By implementing a data management solution, data can continuously be collected from the data ecosystem. Each of these data points is then consolidated into a 360 single customer view by merging identities from multiple devices into one, deduping customer records and enhancing with additional demographic insights.
The efforts are well worth it. A Fluent survey found that 47 percent of shoppers who engage with retailers across 10 or more channels make purchases from their favorite retailer’s website at least once a week, compared to just 21 percent for those who engage across one to four channels.
Retail businesses can’t afford to ignore omnichannel approaches. As mobile and other technologies continue to change the shopping landscape, retailers need to adjust their efforts to engage with consumers across any number of channels and devices.
Bio: As Director of Marketing for DataMentors and Relevate Auto, Larisa has a deep understanding of today’s data-driven marketing environment, including key components such as Right Time Marketing, Data Quality, Business Intelligence, and Data-as-a-Service (DaaS).