May 21, 2024
May 23, 2024

What is Omnichannel Retailing? Definition and Examples

Omnichannel retailing refers to a seamlessly integrated shopping experience across all channels and touchpoints.

The key difference between omnichannel and multichannel is that omnichannel unifies processes and systems across channels to provide a consistent, personalized experience, while multichannel operates channels independently in silos.

With omnichannel retail, the customer journey transcends individual channels; instead, the experience flows effortlessly across devices, online and offline stores, mobile apps, social media, and more.

Some examples of omnichannel customer experiences include:

  • Buying online and picking up purchases in-store (BOPIS)
  • Browsing products on a mobile app and finalizing the purchase on a website
  • Receiving personalized recommendations via email based on in-store browsing history
  • Initiating returns online for items purchased in a physical store
  • Checking real-time inventory availability across local stores before making a purchase

The key is seamless integration of systems and data across every touchpoint to deliver consistent branding, pricing, promotions, customer service, and more.

Omnichannel retail depends on unified commerce platforms that connect POS, inventory, CRM, order management and fulfillment across channels. This integration enables the flexibility and convenience that today's consumers demand.

Why Omnichannel Matters: Meeting Modern Consumer Expectations

The rise of smartphones, mobile commerce, and always-on connectivity has given birth to the "connected consumer". Today's shoppers demand instant gratification, valuing convenience and speed more than ever.

Research shows that nearly 80% of smartphone users turn to their devices to help with shopping, whether it's finding store locations, comparing prices, reading reviews or making purchases.

This reliance on mobile represents a fundamental shift in consumer behavior and expectations. Shoppers now see brick-and-mortar and online as one unified retail experience.

They expect to engage with brands seamlessly across channels and touchpoints.

An effective omnichannel strategy is the only way for retailers to meet these new expectations.

It provides convenience through options like buy-online-pickup-in-store (BOPIS) and ship-from-store. Customers can shop anytime, anywhere and get what they want through their channel of choice.

Omnichannel also enhances the experience by enabling consistent branding, pricing, product information, promotions and customer service across channels.

Retailers who fail to adapt to this omnichannel environment will quickly fall behind the competition.

Those who embrace omnichannel gain significant competitive advantages, including higher revenue growth, increased customer retention and greater brand loyalty. In fact, research by Aberdeen Group found that companies with strong omnichannel customer engagement had an average 9.5% year-over-year increase in annual revenue, compared to 3.4% for weak omnichannel companies.

The Evolution of Retail: From Multichannel to Omnichannel

The retail landscape has undergone a major transformation in recent years, evolving from disjointed multichannel operations to unified omnichannel experiences. Multichannel retail refers to the presence of multiple sales channels, like brick-and-mortar stores, e-commerce, mobile apps, social media, etc.

However, these channels often operated in silos, leading to a fragmented and inconsistent customer experience.

The limitations of the multichannel approach became clear as customers demanded seamless shopping journeys across touchpoints.

Disjointed systems and processes meant customers might see different prices or inventory across channels. After browsing a product online, they'd visit the physical store only to find it out of stock. Or they'd purchase online and return in-store, creating headaches for retailers operationally.

Retailers realized the need to connect the dots between channels through workflow automation. By implementing connected processes for order management, inventory visibility, returns and more, they began breaking down internal silos.

This enabled data sharing and visibility across channels, providing a unified view of the business.

The natural evolution was a shift from multichannel to omnichannel retail strategies. Omnichannel focuses on delivering seamless, integrated experiences to customers no matter how or where they engage. Automated workflows are essential to making this possible at scale.

They allow retailers to have a single view of inventory, orders, and customer data across all touchpoints. This omnichannel approach meets rising consumer expectations for smooth, personalized shopping journeys.

Key Omnichannel Retail Trends and Innovations

Omnichannel retail has seen rapid evolution and innovation in recent years as retailers strive to meet rising consumer expectations for seamless shopping experiences across channels.

Some of the major trends shaping omnichannel retail include:

  • Buy Online, Pickup In-Store (BOPIS): BOPIS has become a hugely popular omnichannel service, allowing customers to order online and conveniently pick up purchases at a nearby store. Retailers like Walmart, Target and Best Buy have seen BOPIS help drive store traffic and sales.
  • Advanced Mobile Commerce: Mobile apps and mobile-optimized sites are critical for omnichannel success. Leading retailers are enhancing mobile features like scan and go, location-based promotions, mobile payments, augmented reality, and more. Mobile is key for an on-the-go omnichannel experience.
  • Internet of Things and Smart Stores: IoT sensors and devices are enabling retailers to create smart, connected stores. Data from IoT systems helps unify in-store and online channels. Interactive mirrors, smart shelves, and beacons improve omnichannel personalization.
  • Ship-from-Store: Retailers are leveraging in-store inventory for omnichannel order fulfillment through ship-from-store programs. This provides flexibility to ship products faster and improve inventory visibility.
  • Innovative Order Management: Order management systems are evolving to support omnichannel capabilities like BOPIS, ship-from-store, and flexible delivery options. Automated systems help efficiently allocate inventory.
  • Unified Commerce: Platforms like unified commerce and POS solutions integrate siloed systems for a single view of inventory, customers, and order/transaction data across all channels.
  • Omnichannel Payment: Frictionless payment experiences allow customers to pay however they want, whether instore, online, or on mobile. Retailers are unifying payment processing across channels.

Leading omnichannel retailers like Amazon, Walmart, Macy’s and more are pioneering these kinds of innovations to transform the shopping journey. Investments in omnichannel technology, data integration, and process improvement are key to elevating the customer experience.

Those who lead the charge in omnichannel innovation will gain a clear competitive edge.

Benefits of an Effective Omnichannel Retail Strategy

An effective omnichannel strategy delivers immense value for retailers across several key areas:

1. Consistent Brand Experience

Omnichannel retail enables a consistent brand experience across every customer touchpoint. Rather than siloed, disjointed interactions, customers enjoy seamless engagement with the brand as they move between channels.

For example, a customer may first learn about a product on social media, discuss it with a sales rep online, purchase through a mobile app, and pick it up at a physical store. At each stage, messaging, offers and experiences are unified. This prevents confusion from conflicting information and strengthens brand affinity.

2. Increased Customer Loyalty and Lifetime Value

By providing personalized, integrated journeys, omnichannel drives greater customer satisfaction and loyalty. One study found omnichannel customers have a 30% higher lifetime value than single-channel customers.

Loyal omnichannel customers also spend more over time. For instance, omnichannel shoppers have a 10% higher annual spend for retailers like Macy's and Nordstrom.

3. Optimized Inventory Management

Omnichannel retail relies on a unified view of inventory across all channels and locations. This prevents overstocking or understocking issues that result from fragmented inventory data.

With real-time visibility into stock levels, retailers can efficiently meet customer demand regardless of whether an order originates online, in-store or via mobile. This reduces lost sales and improves inventory turnover.

4. Richer Customer Data and Personalization

Omnichannel unifies data from all customer interactions into a single profile. This 360-degree view enables more personalized marketing based on interests, behaviors and preferences demonstrated across channels.

Brands can deliver tailored offers, recommendations and experiences customized to each shopper. Personalized omnichannel engagement boosts conversion rates by 10% or more.

5. Operational Efficiencies and Cost Savings

Omnichannel streamlines convoluted retail processes and systems into a seamless operation. Supply chain, order fulfillment, inventory and more can be optimized across channels.

These efficiencies allow retailers to reduce costs in labor, logistics and inventory. Omnichannel operations are estimated to save from 5% to 25% in supply chain costs alone.

Implementing Omnichannel: Best Practices and Challenges

Implementing an effective omnichannel strategy requires careful planning and execution across people, processes and technology. Here are some best practices for a successful implementation:

  • Get executive buy-in and support. Omnichannel transformation impacts the entire organization. Securing leadership alignment and sponsorship is crucial.
  • Break down silos. Omnichannel requires cross-departmental collaboration between sales, marketing, operations, IT, etc. Identify and remove bottlenecks caused by siloed teams and data.
  • Map the customer journey. Analyze how customers interact with your brand across channels and touchpoints. Identify pain points to address.
  • Set clear goals and KPIs. Define specific omnichannel objectives, like increased conversion rates or sales. Track progress with metrics.
  • Upgrade technology as needed. Audit existing systems. Modern POS, order management and inventory management systems enable omnichannel execution.
  • Integrate data and systems. Connect CRM, inventory, order history and other data sources via APIs for single customer views.
  • Provide omnichannel training. Educate associates on delivering consistent experiences across channels. Include executives in training.
  • Start small, test and iterate. Pilot omnichannel initiatives before scaling. Use insights to refine the strategy.
  • Automate with workflows. Streamline omnichannel processes like inventory updates, order management and triggered campaigns.

Omnichannel implementation faces hurdles like:

  • Organizational silos - misaligned teams and systems create disjointed experiences.
  • Legacy technology - outdated systems aren't integrated and lack omnichannel capabilities.
  • Channel conflicts - individual channels resisting changes that affect metrics.
  • Poor change management - lack of training and buy-in during the transition.
  • Budget constraints - costs of upgrading tech and processes.

Automation and workflows from help overcome many of these challenges by seamlessly connecting systems, centralizing data, and streamlining cross-channel processes. This eliminates friction and accelerates omnichannel execution.

The Role of AI and Automation in Omnichannel Experiences

AI and automation play a critical role in enabling seamless omnichannel experiences. Key use cases include:

  • Personalization - AI algorithms analyze customer data to deliver personalized product recommendations, promotions, and content across channels. This provides a tailored experience.
  • Inventory Optimization - AI can predict demand and optimize inventory allocation across locations and channels, ensuring the right products are available when and where customers want to purchase.
  • Customer Service - Chatbots and virtual assistants use natural language processing to handle common customer inquiries across web, mobile, and in-store interactions. This provides 24/7 support.

Automating omnichannel processes via workflows has significant benefits:

  • Triggered Campaigns - Workflows can automatically send triggered emails or push notifications, like cart abandonment reminders, browse re-targeting ads, and more.
  • Real-time Inventory Sync - As inventory levels change, workflows can immediately update availability across ecommerce sites, apps, stores, and warehouses.
  • Streamlined Order Management - Workflows seamlessly route orders placed via any channel to the optimal fulfillment location while updating inventory counts.

With AI and automation, retailers can scale personalized, omnichannel experiences without adding complexity or cost. Workflows enable them to coordinate data, systems, and processes across channels for a unified customer journey.

Omnichannel Customer Engagement and Journey Mapping

Omnichannel customer engagement refers to interacting with customers across multiple channels and touchpoints in a unified way. To deliver personalized engagement, retailers need to map the omnichannel customer journey to understand how shoppers research, browse, purchase, and get support across different channels.

Journey mapping analyzes how customers interact with the brand across various touchpoints, both online and offline. This could include:

  • Researching products on the website
  • Checking product availability on a mobile app
  • Visiting a brick-and-mortar store to see or try on an item
  • Purchasing the product online for in-store pickup
  • Contacting customer service via phone, email or chat
  • Receiving post-purchase communications like order confirmations and shipping updates

By mapping journeys, retailers gain visibility into pain points and opportunities to enhance the experience. They can identify common paths customers take, as well as patterns like cart abandonment.

Retailers can then use workflow automation to create triggered omnichannel campaigns based on journey analytics. For example:

  • Sending cart abandonment emails to re-engage shoppers and recover lost sales
  • Retargeting customers who browsed certain items with related product recommendations
  • Following up by phone after an in-store purchase to support product setup
  • Sending an automated thank you and feedback request after delivery

Automating triggered campaigns creates more coordinated, relevant touchpoints across channels tailored to where each customer is in their journey. This drives better engagement and loyalty over time.

Measuring Success: Omnichannel Retail Metrics & Analytics

Measuring the success of omnichannel initiatives is crucial for retailers to understand performance across channels and touchpoints. Key metrics to track include:

  • Customer lifetime value (CLV): Track CLV to measure the revenue impact of improved loyalty and retention from omnichannel experiences. Compare CLV for omnichannel vs single-channel customers.
  • Sales by channel: Break down revenue by different channels to see contribution and growth. Compare in-store sales, e-commerce, mobile, etc.
  • Channel attribution: Determine how each channel contributes to sales attribution to optimize spending.
  • Customer retention rate: Calculate retention rate differences for omnichannel customers compared to single-channel.
  • Channel engagement metrics: Track engagement KPIs for each channel like email open rates, time on site, app downloads.
  • Omnichannel adoption rate: Measure the percentage of customers using multiple vs single channels.
  • Order fulfillment costs: Compare omnichannel fulfillment costs vs single channel. Omnichannel can optimize inventory and logistics.
  • Inventory accuracy: Track improvements in inventory accuracy from omnichannel data sharing. Reduces over/understocking.

The key is consolidating data from all channels and touchpoints to calculate these cross-channel metrics. Workflows and automation can help integrate data from disparate sources into unified reporting and dashboards. This provides the comprehensive visibility required to measure omnichannel success.

The Future of Seamless, AI-Powered Omnichannel Retail

The future of omnichannel retail promises even more seamless and personalized customer experiences enabled by emerging technologies like 5G, the Internet of Things (IoT), extended reality, and advanced AI.

As 5G networks roll out, retailers will be able to deliver incredibly fast and reliable connectivity across channels.

This opens up new possibilities for real-time omnichannel experiences leveraging technologies like IoT and extended reality. Internet of Things sensors throughout stores can continuously track inventory levels, connect digital and physical experiences, and enable features like smart checkout.

Extended reality technologies like augmented and virtual reality also have intriguing omnichannel applications - from virtual dressing rooms to immersive in-store experiences.

At the same time, retailers will need to rapidly adapt to evolving consumer expectations and preferences in the years ahead. Customers today demand hyper-personalized, integrated journeys across all touchpoints.

Meeting these expectations at scale requires intelligent automation and AI capabilities.

Powerful AI algorithms can crunch vast amounts of omnichannel data to understand each customer's unique needs and deliver tailored recommendations and experiences. As computing power and AI techniques improve, retailers can provide "segment of one" personalization in real time across channels.

Omnichannel innovators are already using AI-powered workflows to scale personalized experiences.

These workflows automate complex processes to sync data, trigger campaigns, customize interactions, optimize operations, and more. With the flexibility to easily adapt these AI workflows to new use cases, retailers can remain agile in the face of shifting consumer expectations.

The future of omnichannel lies in AI-driven automation that coordinates seamless customer experiences across all touchpoints at massive scale.

Retailers who embrace these emerging omnichannel innovations and AI capabilities will gain a powerful competitive advantage.

Ready to level-up?

Write 10x faster, engage your audience, & never struggle with the blank page again.

Get Started for Free
Get Started for Free
No credit card required
2,000 free words per month
90+ content types to explore