Why Brands and Retailers Need to Focus on Omnichannel
September 14, 2023
In the modern retail ecosystem, the term "omnichannel" has transitioned from a buzzword to a necessity. As the lines between online and offline shopping blur, consumers no longer see them as distinct entities but as interconnected facets of a single shopping experience.
The shift towards omnichannel shopping is not a mere trend but a reflection of the evolving consumer psyche. Brands and retailers that recognize and cater to this shift stand to gain a competitive edge, fostering stronger customer relationships and driving higher sales in the long run.
In this article, we'll:
- Delve into the nuances of omnichannel retailing and its pivotal role in modern commerce
- Highlight omnichannel challenges and tips for brands
- Cover how Lucky can help brands navigate the omnichannel landscape
What is Omnichannel in Retail?
Omnichannel in retail refers to the integration of multiple sales channels and customer touchpoints into a cohesive and seamless shopping experience. The term "omni" means "all," emphasizing the integration of all channels, online or offline.
This integration is not just about having a presence across multiple channels but ensuring that the transition between these channels is smooth and consistent. For instance, a customer might discover a product on a brand's Instagram page, research it further on their website, and finally make a purchase in a brick-and-mortar store. The brand's ability to provide consistent information, pricing, and customer service across all these touchpoints becomes crucial.
Why is Omnichannel Important in Retail?
The significance of omnichannel retail cannot be overstated. In fact, 86% of consumer packaged goods (CPG) dollar sales in the US came from omnichannel shoppers. Modern consumers expect seamless experiences. If a brand can't provide consistent and uninterrupted experiences across these channels, it might frustrate consumers and drive them to competitors.
One study revealed that more than 87% of shoppers conduct online research before making a purchase, even if the final transaction happens in a physical store. This "webrooming" phenomenon, where consumers research online and buy offline, is a testament to the changing dynamics of retail.
On the flip side, "showrooming," where consumers inspect products in-store but purchase them online, often at a lower price, is also on the rise. Such behaviors highlight the need for retailers to have a cohesive omnichannel strategy. It's not just about competing on price but offering value-added services like online reservations for in-store pickups, virtual try-ons, and personalized in-store experiences based on online browsing history.
Challenges for Brands in Omnichannel Retail
Understanding Changing Consumer Behavior
The retail landscape is in a constant state of flux, driven by technological advancements and shifting consumer preferences. Brands must grapple with the challenge of understanding these evolving behaviors. For instance, more than one in five shoppers (22%) now plan an in-store shopping trip combined with a prior online order. Understanding how consumers are spending and adapting to these changes is crucial to maximizing the value of omnichannel strategies.
Keeping Pace with Demand
The surge in omnichannel shopping has led to a dramatic increase in demand across various channels. According to Data Impact by NIQ, there are more than 50,000 online stores operating in the US alone. Brands must ensure that their products are visible and available wherever their customers are shopping. This requires a delicate balance of inventory management, demand forecasting, and supply chain optimization. With eCommerce expected to reach $36 billion in 2023—a 20% projected increase from 2022, every optimization can lead to significant gains. However, brands must ensure that these strategies are based on accurate data to avoid pitfalls.
Tips for Brands to Excel in Omnichannel
Focus on the Customer
At the heart of a successful omnichannel strategy lies a deep understanding of the customer. Brands must prioritize the needs, preferences, and behaviors of their customers across various channels. This means offering experiences tailored to individual preferences and ensuring that the customer remains at the center of all strategic decisions.
For instance, online shoppers often search by product attribute rather than brand. Brands that fail to highlight key product attributes, such as sustainability, risk getting lost in the vast digital landscape. As per NIQ data, 26% of shoppers find it challenging to locate sustainable products online. By understanding such nuances, brands can better cater to their audience's specific needs.
Product Assortment for Each Channel
Managing product assortment in an omnichannel environment can be complex. Brands need to strike a balance between maintaining consistency and tailoring their offerings to each specific channel. For instance, while an online store might offer a broader range of products, a mobile app might focus on highlighting new arrivals or popular items. Ensuring that customers see the most effective version of a product assortment is crucial. By understanding which products resonate best on which channels, brands can streamline their offerings and maximize returns.
Optimize Technology and Data
As new shopping paths emerge, from mobile to social commerce, brands face the challenge of managing their product data across these channels. Ensuring data quality and consistency becomes paramount. Regular reviews and corrections of data can help brands avoid discrepancies and ensure they base their strategies on accurate information. By leveraging accurate sales and panel data, brands can gain a comprehensive view of their position and opportunities in the market.
How Lucky Can Assist Brands with Omnichannel Strategies
Data Optimization for Real-Time Tracking and Inventory Monitoring
In the fast-paced world of retail, having accurate and up-to-the-minute data is crucial. Lucky offers tools that enable brands to track retail sales in real-time and monitor inventory levels. This ensures that brands always have the most current and precise data at their fingertips. Such capabilities are essential for making informed decisions, especially in an omnichannel environment where inventory management across various channels can be complex.
Additionally, understanding customer behavior across different channels is paramount for an effective omnichannel strategy. Lucky solutions are designed to capture intricate details of customer engagements and provide valuable attribution data. This offers deep insights into customers' preferences, behaviors, and expectations across various channels, allowing brands to tailor their marketing efforts and offer a seamless shopping experience.
Omnichannel Enablement Solutions & Partnerships
Lucky recognizes the importance of both wholesale and direct-to-consumer approaches in the omnichannel landscape. Our omnichannel enablement solutions empower brands to optimize their wholesale strategy while simultaneously supporting their direct-to-consumer initiatives. This dual focus ensures that brands can reach a wider audience, catering to different customer preferences and needs, ultimately boosting sales growth.
Lucky has also forged partnerships with major retailers like Sephora, Nordstrom, and Walgreens. These partnerships grant brands access to invaluable data and inventory insights. By effectively managing their product assortment across different channels, brands can ensure that customers always see the most effective version of their product lineup, whether they're shopping in-store or online.
In today's dynamic retail landscape, adopting and refining omnichannel strategies is no longer optional; it's a necessity. Consumers expect a seamless and personalized shopping experience across all touchpoints, and brands that fail to deliver risk losing their loyalty. With the projected growth of eCommerce and the increasing complexity of the retail environment, brands must be proactive in understanding and meeting the evolving needs of their customers.
Lucky is a leader in helping brands and retailers with omnichannel growth. Learn more at luckylabs.io.