Customers also expect retailers to offer several communication methods and cater to the customer’s preferred channel(s). Omnichannel retail combines these capabilities, leaving forward-thinking retailers well positioned to stand out in the marketplace.
Legacy Omnichannel Retail: Focus on In-store Interactive Experiences
Historically, omnichannel-savvy retailers have focused on ways to provide in-store customers with engaging interactive experiences. Two notable examples have emerged during the recent past.
Magic Mirrors
“Magic mirrors” (or smart mirrors) came into vogue within the past five years. These augmented reality-enhanced mirrors display the user’s image on a screen via a built-in camera. The mirror superimposes clothing and accessories on the user, enabling customers to “try on” the products without hauling clothes into the fitting room.
Digital Signage
Retailers use digital signage to attract customers’ attention and help drive in-store purchases. Smart digital shelving, video walls, and promo boards are three examples of this flashy communication medium.
The COVID-19 Pandemic Revamps the Retail Landscape
In early 2020, the COVID-19 pandemic’s rapid spread led to shuttering of brick-and-mortar retail stores across the globe. To generate revenue, retailers launched or expanded their eCommerce operations. Millions of bored, locked-down consumers responded, causing a huge eCommerce boom. Rapid order fulfillment set the stage for consumers’ future expectations.
Omnichannel Communication Comes to the Forefront
Concurrently, retailers turned to digital media to maintain contact with customers. Many retailers continued to rely on siloed multi-channel communications that required customers to retell their story every time they called the Help Line.
However, innovative retail businesses began to embrace integrated omnichannel communications. Here, voice-based customer support was joined by increasingly popular SMS/texting capabilities. Many retailers brought chatbots and chat apps online to field routine customer inquiries. Human customer support associates could address more complex issues.
Every associate received real-time communication updates on a customer’s previous interactions. Therefore, the customer was not compelled to tell the same story to multiple support associates.
A Major Omnichannel Retail Trend Emerges in 2023
In 2023, consumers increasingly enjoy an omnichannel retail journey. Physical and digital shopping experiences mesh together, giving the consumer multiple touchpoints along the way.
Arpan Podduturi is Shopify’s Director of Product Retail and Messaging. He explained how a typical consumer finds and purchases a product. He also highlighted three omnichannel shopping trends.
“Online and offline are effectively one continuous experience. Very few people walk into a retail store without having done their homework. They usually started on their phone. They’re following some brand and they go into stores with purpose,” he remarked.
- BOPIS: Buy online and pickup in the store
- BORIS: Buy online and return in the store
- Showrooming: Buy in the store, ship to customer’s home
Younger consumers have eagerly embraced these new ways to receive their favorite products. Gen Z consumers have largely abandoned traditional retail purchasing behavior. They often judge retailers and brands by the ease of communication and smoothness of the shopping experience.
Mitto: An Omnichannel Communication Leader Enhances Its Services
As retailers gradually adopt an omnichannel communication strategy, an industry leader continues to expand its service offerings. Established in 2013, Swiss company Mitto originally sought to build a revolutionary SMS platform to handle projected industry needs.
Ilja Gorelik, Mitto’s Chief Operating Officer (or COO), explained the evolution of the firm’s communication offerings. Retailers typically use these media to interact with customers.
A New A2P SMS Messaging Platform
“Our company was founded in 2013 with the specific aim of building a state-of-the-art Application-to-Person (A2P) SMS messaging platform, unrivaled in reliability, that could support the requirements of a new wave of A2P services.
“As the demand grew for enablement of omnichannel communications capabilities, we expanded our portfolio beyond SMS. [We] now include voice, chat bots, all major chat apps (WhatsApp, Viber, Facebook Messenger, etc.), Google Business Messaging, RCS, myriad CRM and marketing platform integrations and, most recently, pre-built tools for bulk campaigns and conversational support chats. Simply put, we make communication happen,” he remarked.
Honoring Customers’ Channel Preferences Is Key
Ilja Gorelik also emphasized that customers’ channel preferences vary. When retailers communicate on customers’ preferred channels, the companies show that they value customers’ choices. “Global brands have global customers, each of which interacts with brands slightly differently.
“Some prefer to interact with brands on SMS, some on chat apps like WhatsApp and Viber. Some don’t have a preference; they want the ability to engage with a brand on whatever channel is most effective at that moment in time.
“There is no single channel to reach every customer, there is no perfect message, and customers’ expectations for brands are sky high. Mitto’s services help brands navigate this complexity,” Ilja Gorelik emphasized.
Omnichannel Retail Strategy Components
An effective omnichannel retail strategy combines brick-and-mortar stores and an online channel such as an eCommerce platform. Taken together, these avenues offer customers a seamless purchase experience.
To achieve this goal, retailers must first obtain solid market research that determines what the target market wants. A reliable supply chain, robust distribution, and thorough attention to logistics are also key components.
An Enthusiastic Bonobos Co-founder Weighs In
Andy Dunn is co-founder of Bonobos, a highly successful New York City men’s apparel brand. He emphasized that brand-loyal customers will gladly purchase the product via any available outlet. “The customer doesn’t care where you are. They just want to love the brand, and they’re going to buy it wherever they are,” he emphasized.
Dunn also suggested that brands could reduce their marketing costs by partnering with mega-retailers such as Walmart or Target. With increased visibility, and higher-volume sales that compensate for the lower margins, the brand could potentially scale faster.
Sephora’s Executive Vice President of Omni Retail Shares Insights
Global cosmetics retailer Sephora is an acknowledged omnichannel retail leader, combining retail stores and a thriving eCommerce operation. Headquartered in San Francisco, Sephora USA was forced to close its stores during the COVID-19 pandemic. Therefore, customers could no longer enjoy Sephora’s “try before you buy” samples and customer-friendly activities.
In a remarkable pivot, Sephora adopted virtual reality (or VR) tutorials, demos, consultations, and personal shopping excursions. Although Sephora’s physical locations are back in operation, the retailer continues many popular VR offerings.
Mary Beth Laughton, Sephora’s Executive Vice President of Omni Retail, is now reinventing the customer experience that blends the physical and digital environments. She coined the term “omnitude” to describe this landmark undertaking.
“It’s about creating an attitude and a mindset around putting the consumer at the center of everything…We coined this term ‘omnitude,’ and it’s this idea that we’ll do whatever we can to delight our consumer wherever she’s shopping with us,” she concluded.
The 3-Step Omnichannel Communication Framework
An effective omnichannel communication structure requires a three-step approach. Each step depends upon the successful completion of the previous one. Skipping steps, or completing them out of order, won’t enable the retailer to achieve optimal results.
- Identify the Target Market’s Preferred Channels: Commission market research that profiles the retailer’s target audience. Next, determine the market’s preferred communication channel(s).
- Create an Omnichannel Communication Network: Implement audience-friendly communication tools such as SMS/texting, live chat, chatbot, and social media messaging. Each tool should provide the consumer with interactive messaging functionality.
- Implement Relevant Performance Metrics: Use data analytics and Key Performance Indicators (or KPIs) to interpret customer data. Create a remediation strategy for any measures that fall below accepted parameters.
McKinsey & Company Cautions Against Three Omnichannel Retail Pitfalls
Retailers ready to jump on the omnichannel retail bandwagon should first examine their strategic priorities. McKinsey and Company, a respected global management consulting company, recognized that an abundance of omnichannel technologies and approaches wasn’t always a good thing. These three potential missteps are common across the industry:
No Clear Understanding of Omnichannel Priorities
Few retailers have established a short- and long-term omnichannel agenda. Without this template, companies invest everywhere with no real impact anywhere. Stated another way, a retailer can severely erode their financial resources without any substantive increase in visibility and/or market share.
Lack of Focus on Customer Value
Many retailers have adopted omnichannel technology while neglecting to indicate how these expenditures will create longer-term value. These retailers may also ignore customers’ needs in favor of heavily marketed shiny objects.
Failure to Plan for Omnichannel Implementation
Retailers eager to implement an omnichannel approach may forget to handle the critical logistics of this undertaking. This can result in disjointed investments without a unified goal or strategy.
How Leading Retailers Achieve Their Omnichannel Goals
Retail industry leaders rarely fall into these omnichannel traps. To avoid them, these executives closely examine their strategic goals and customer priorities. From this perspective, they identify their omnichannel goal and what it will take to accomplish it. Finally, they integrate these guidelines into their retail strategy.
As with other developing technologies, working with a recognized expert can streamline the process. Here, a respected omnichannel solutions provider can help the retailer pinpoint their priorities and design a plan to accomplish the related goals.
