The Harvard Business Review shows that around 73% of customers prefer shopping through multiple channels rather than using a single one. Besides, research by Omnisend proved that companies using the omnichannel approach earned a 494% higher order rate than those using a single channel only. Let’s find out what omnichannel ecommerce is and why it is so popular.
What Is Omnichannel Ecommerce and How Does It Work?
Omnichannel ecommerce is a retail approach that integrates various channels such as brick-and-mortar stores, online marketplaces, social media platforms, and mobile apps to create a cohesive and consistent shopping experience for customers. The main aim is to let users move seamlessly between these channels throughout their customer journey.
For example, a customer may browse products on a retailer's website, add items to their cart, and then pick up the order in-store or have it shipped to their house. Alternatively, they may see an item on social media, visit the retailer's brick-and-mortar store to see it in person, and then purchase this product on the retailer’s website or via their mobile app.
Differences Between Multichannel Ecommerce and Omnichannel Ecommerce
Although these terms are quite similar, there are some key differences between multichannel ecommerce and omnichannel ecommerce:
- Multichannel ecommerce refers to selling products through various channels (be it a physical store, a website, or a third-party marketplace). However, these channels may not be integrated, and customers may have different experiences on each channel.
- Omnichannel ecommerce integrates the channels creating a consistent shopping experience across all the touchpoints. It enables customers to move seamlessly between the channels and allows retailers to use the data from each of the channels to provide their customers with a personalized experience.
6 Benefits and 3 Challenges of Omnichannel Ecommerce
Here’s what you’re likely to get if you decide to shift to omnichannel ecommerce:
- Improved customer experience. Omnichannel ecommerce provides customers with a seamless shopping experience across various channels. This means that customers can browse products online, check availability in-store, and make purchases through their mobile or desktop devices receiving the same level of service and information every step of the way. This improves customer satisfaction and loyalty, which in turn can lead to increased sales and revenue.
- Increased sales. Omnichannel ecommerce gives customers multiple touchpoints to interact with the brand. This increases the chances of converting potential customers into actual buyers. For example, a customer may find a product on a retailer's social media page, click through to the website, and then make the final purchase in-store. According to a study, brands using omnichannel strategies retain about 89% of customers. At the same time, those brands that don’t rely on omnichannel marketing retain about 33% of their customers.
- Better inventory management. Omnichannel ecommerce allows businesses to manage their inventory more efficiently by integrating their online and offline sales channels. This means that businesses can track their inventory levels in real time and avoid overstocking or stockouts.
- Enhanced brand visibility. Omnichannel ecommerce helps companies leverage different channels to reach their target audience. Brands can use social media, email marketing, and online advertising to drive traffic to their website and bring more customers to their brick-and-mortar stores. For example, a retailer may promote a new product launch on their social media channels to drive traffic to their website. As a result, the customers will find more information about the product and will be more likely to make a purchase.
- Improved data collection and analysis. Omnichannel ecommerce provides businesses with more data about their customers' shopping behavior, preferences, and purchase history. This data can be used to personalize the shopping experience and optimize marketing campaigns. For example, a retailer may analyze their customers' browsing history and purchases to create personalized product recommendations and targeted marketing campaigns.
- Increased operational efficiency. With omnichannel ecommerce, businesses can integrate various sales channels and systems to streamline their operations. It can help to reduce their operational costs, such as inventory management, shipping, and logistics. For example, a retailer may use a centralized inventory management system that integrates online and offline sales channels, reduces the need for manual data entry, and minimizes errors.
An omnichannel ecommerce strategy comes with some challenges as well. Here are four common challenges you may come across:
- Complex technology requirements. Omnichannel ecommerce requires sophisticated technology systems to integrate and manage various sales channels. This can be costly and time-consuming, especially for small and medium-sized businesses. For example, a retailer may need to invest in new software and hardware to enable online ordering, inventory management, and order fulfillment.
- Data integration. If a company wants to implement omnichannel marketing, it needs to integrate its data across multiple channels to provide customers with a seamless experience. However, ensuring data consistency and accuracy can be challenging, as data is often siloed in different systems. For example, a retailer may have different product information in their online and offline systems which may lead to customers' confusion and irritation.
- Consistency in customer experience. For implementing the omnichannel strategy, a company should provide a consistent customer experience across multiple channels. This means that customers should receive the same level of service and information whether they are shopping online or in-store. It can be pretty challenging, as different channels may have different levels of staffing and training.
- Organizational changes. Omnichannel ecommerce requires retailers to rethink their organizational structure and processes to ensure seamless operations across all channels which can also be a problem, especially if a company’s organizational system is long-established.
How to Get Started with Omnichannel Ecommerce
If you want to implement the omnichannel marketing strategy, here’s a list of steps you should go through:
- Define your omnichannel strategy. The first thing you should do is identify your business objectives, target audience, key performance indicators (KPIs), and the channels that your customers use the most. Determine which channels are vital to your business and how you can create a seamless experience across them. For example, if you have a physical store and an online store, think about the ways of integrating these two.
- Invest in technology and tools. To effectively implement an omnichannel ecommerce strategy, you'll need to invest in technology and tools that can help you manage your channels and track customer behavior. This may include customer relationship management (CRM) software, inventory management software, and an ecommerce platform that can support multiple channels.
- Create a consistent brand experience. One of the key benefits of an omnichannel ecommerce strategy is the ability to provide a consistent brand experience across all channels. To achieve this result, ensure that your branding, messaging, and visuals match each other.
- Offer flexible fulfillment options. Customers expect flexible fulfillment options, such as buying online and picking up in-store or having same-day delivery. To meet these expectations, you'll need to have the right infrastructure in place, such as a warehouse or a distribution center, and the ability to track inventory across all channels.
- Collect and analyze customer data. An omnichannel ecommerce strategy relies on customer data to provide a personalized and relevant experience. Collect data from all the channels you have and use it to create a single customer view. Analyze this data to understand customer behavior and preferences and segment customers into groups for better personalization. For example, if you notice that customers often abandon their carts, you can use targeted email campaigns to encourage them to complete their purchases.
- Train your team. If you want to execute an omnichannel ecommerce strategy effectively, you'll need a team that can work with all the necessary tools. Teach your team to use the CRM system, ecommerce platform, and other tools, and provide ongoing support to ensure that they're comfortable with the technology.
Omnichannel ecommerce allows customers to move seamlessly between channels and provides retailers with valuable data to create targeted marketing campaigns and optimize their management systems.
If you decide to implement an omnichannel strategy, be ready to face some challenges:
- Complex technology requirements
- Data integration
- Consistency in customer experience
- Organizational changes
However, the benefits that omnichannel ecommerce can bring to your company, make it a worthwhile endeavor:
- Improved customer experience
- Increased sales
- Better inventory management
- Enhanced brand visibility
- Improved data collection and analysis
- Increased operational efficiency
To get started with omnichannel ecommerce, define your strategy, invest in technology, optimize logistics, train your team, and collect and analyze data. This way, you can provide a seamless experience for your customers and stay competitive in an ever-changing retail landscape.