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Why You Should Switch To Omnichannel The Model

29th Jan 2017
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Brick and mortar retailers had a “not so great” Christmas season. First, they are competing with giants like Amazon; second, online retail in general has had massive increases each year, and accounted for a decline in sales in physical stores. While stores that have both physical and online presences, are still realizing more sales in their physical establishments, the trend is clear. Online will ultimately win out.

The Data Tells the Story

Here are a few recent stats from Business Intelligence, the research arm of Business Insider.

  • Consumers in America alone, were predicted to spend about $385 billion in online purchases by the end of 2016. While the final figures are still being finalized, the first quarter of 2016 saw $68 billion in purchases, and that, of course, was long before the holiday season shopping began.
  • During the first half of 2016, total retail growth was about 2%; however, e-commerce growth stood at 16%

In the UK, things are no different. Major retailer John Lewis reported that online sales for the 6-week period leading up to Christmas were 40% of total sales. Similar experiences were had by other retailers such as Marks & Spencer. Even groceries stores are feeling the change. Sainsbury’s reported that online sales were up 9% during the holiday season.

Not So Fast – Opting for Single Online Channel Could Prove to Be a Mistake

Clearly, the trend is to more shopping online. And why not? It’s convenient and, for a few dollars more, you can get overnight delivery. Some Amazon distribution centers, and partnerships with local grocery retailers, are delivering products within hours of their purchase. In addition, Amazon is actually opening physical bookstores in several locales, allowing consumers to browse books and tech devices, and then finalize the purchase for delivery to their homes. If Amazon is seeing value in physical locations, then they are probably seeing some benefit to their bottom line.

A recent survey of 46,000 shoppers, reported in the Harvard Business Review, noted that retailers actually will get more business if they take an omnichannel approach to their marketing and selling. This means that they maintain both physical establishments and a strong online presence, and provide shoppers with multiple methods and incentives to use both venues. Here are some of the results of this survey:

  • Shoppers who interacted with a retailer through multiple channels – physical stores, websites, mobile apps, social media, chat, and even telephone – were more loyal and visited a physical store 23% more often over a six-month period.
  • Shoppers who interacted on at least four channels spent an average of 9% more in physical stores and even more online.
  • 73% of the consumers surveyed used multiple channels when they shopped.

Blending of Online and Physical Channels

There are a number of ways that retailers can use their channels to boost sales and loyalty. Here are just a few:

  • They can offer online shoppers the option to pick up the item at a nearby physical location. This services as a convenience to the shopper who does not have to pay shipping costs and can usually get the item faster. Getting that person into the physical store can mean that they browse and make impulse buys.
  • They can drive customers to their physical locations with coupons that they publish on their websites and in their mobile apps.
  • They can offer special sale pricing on their websites to customers who shop their physical location as opposed to purchasing online. And when they arrive? Their retail shelving and aisle arrangements/in-store maps can be available on their mobile app, so that consumers can quickly find what they want.
  • Shoppers in their stores can use their devices to order the item online and have it shipped to their homes – often, this is more convenient than lugging bulky packages around throughout a shopping excursion.
  • Online retailers can partner with local physical stores and vice versa. Toms Shoes, a popular exclusively online retailer has partnered with stores such as Journeys, Macy’s and Nordstrom’s to carry its shoes. The physical retailers love getting customer through their doors.
  • Most retailers now offer returns and exchanges of online purchases in their physical locations. Highly convenient for customers, and, again, it gets them into that physical location where they may buy more.
  • Geolocation: retailers with mobile apps can now track locations of customers and give them alerts for specials, as those customers near one of their physical stores.

How Retailers Can Serve Their Customers Through Omnichannel Models

Gaining brand loyalty is always a struggle for retailers. They spend much time through their websites, apps and social media establishing relationships and connections with customers, to that those same customers will return. This, of course, is important, especially to the millennial shopper who demands more than just a “hard sell.”

What retailers often forget, however, is that today’s customer wants a seamless experience, or at least one that provides the least hassle. One thing that retailers should be doing is syncing everything – the customer, the price, the products and all promotional content – across all of its channels. In this way, no matter where, when and how a potential customer accesses one of the channels, s/he is provided with all of the important information that can boost sales. When customer switch devices (accessing a site through a PC and again through a mobile app), they should find the same information. Otherwise, they become frustrated.

Omnichannel is Not Going Away

Retailers who see the data on the dramatic increases in online sales are tempted to put “all of their eggs in one basket” and opt for an online presence only. This would be a mistake. Studies show that keeping an omnichannel presence will boost both online and in-store purchases.


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