15 Aug, 2022
Omnichannel Strategy: Challenges In Retail & How to overcomeOmnichannel marketing is the seamless integration of branding, online and offline touchpoints as consumers move down the sales funnel. This is the method for retailers to increase profits by selling wherever customers want to buy their products - on a website, in physical stores, or on social media channels. It is known as a combination of all sales channels and customer data to provide a personalized and seamless customer experience.
Many middle and large-sized companies have widely applied and implemented the omnichannel strategy, and most of them agree that it is crucial for business success.
Why an Omnichannel Strategy?
In terms of strategy, there are three ways to manage a business.
A single channel—selling products in physical stores.
A multi-channel - approach implies using multiple platforms for communicating with customers, such as online, on mobile devices, and through personalised emails.
Customers can benefit from the ability to purchase any item through online or physical stores.
Without consistency between channels, multi-channel has some limitations. For instance, the customer can’t choose the item online and buy it in the store or use bonuses earned online in the physical store.
An omnichannel - is one that places the customer at the centre of a comprehensive and consistent communication experience, receiving improved service and buying more regardless of the channel they choose to interact with.
With this method, consumers already expect such an experience from retail brands. Hence, retailers need to ensure consistency across channels so that customers won’t feel uncomfortable or even tricked.
Which challenges do retailers face?
The covid-19 pandemic has had a wide range of effects on the retail industry. According to the UK's Office for National Statistics, the proportion of retail expenses spent online increased from 19.1% in April 2019 to 30.7% in April 2020, a record high—for retail spending was made online in the UK.
This trend started long before COVID but was accelerated by the pandemic. It has changed the short- and long-term needs and habits of customers. In 2010, the retail apocalypse arose, so retail chains and malls in the US had to scale down their operations, and some even went bankrupt.
With the growing reliability of mobile internet and online services, there has been a growing trend that people tend to buy things on the Internet for online shopping. This means retailers who run a business online are competing with the whole world. Statistics show that 93.5% of global internet users have purchased products online. Additionally, in the US, 41% of customers receive 1-2 packages from Amazon per week.
The global e-commerce market is highly competitive, which makes it difficult to expand to new markets and segments. However, retailers who provide a seamless and consistent experience across channels have higher opportunities to attract and retain existing customers.
How does Omnichannel solve retail challenges?
According to Harvard Business Review, 73% of customers use a variety of channels for shopping. Businesses consider developing an eCommerce website and can integrate cloud-based software, depending on their interest and preferences.
That’s why many physical store owners offer to introduce an online sales channel and allow customers to integrate it with the physical experience. And these stores should be utilized as locations for picking items up in the delivery chain because most customers make purchases in physical stores during their shopping journey.
Omnichannel retail helps customers check inventory status on their phone before making a purchase online and picking it up in a physical retail store. Additionally, it is easier to deploy in new markets and costs and risks are decreased.
However, omnichannel requires further efforts - to create the best shopping experience, retailers must implement both business and technical components.
There are multiple components that make up a successful omnichannel marketing strategy—it consists of online, offline, and mixed (phygital – physical and digital) channels. These channels need a strong backend represented by marketing, personalization, and data analytics that can work harmoniously.
This approach helps businesses understand customer experience across channels, powered by integrated data and analytics and enabled by marketing and customer personalization.
The business structure is simple and logical, though technical complexities such as stale or missing technical infrastructure, out-of-date business processes, and lack of experience with modern solutions cause companies to avoid omnichannel.
The business structure is straightforward and consistent, though there are technical difficulties like missing technical infrastructure, out-of-date business procedures, and a lack of experience with modern solutions that cause companies to avoid omnichannel. To solve these challenges, omnichannel from a technical angle is a good option.
There are three layers of a technical perspective: Digital touchpoint, integration, and back office. Digital touchpoints are defined as online and mobile interactions where consumers engage with a business. It includes points of sales, social media, online stores with mobile apps, messengers, customer support, emails, etc.
The bottom layer is the back office, which consists of systems that support the business. Through the integration layer, all of these systems and sales channels are linked. They share data through Data Warehouse and are connected with the help of Integration/API Platform.
Omnichannel - TPP Software Approach
It is crucial for all retailers to have an omnichannel strategy with personalized customer experiences, including both offline and online journeys. An omnichannel approach can address a variety of issues, such as optimization of new markets, channel expansion, and cost reduction. But, being ahead for retailers means implementing an omnichannel strategy wisely and in a timely manner. Ignoring at least one business structure or one strategic component of the technology causes conversion and customer loyalty problems.
Retailers require a technical advisor who can deliver responsive omnichannel in order to make sure everything runs as smoothly as possible.
TPP Software is a leading provider of software consulting services with a team of expertise and experience in working with different e-commerce platforms (Magento, Shopify, Salesforce Commerce Cloud, Hybris), ERPs (SAP ERP), CRMs (Salesforce CRM), CMS and DXPs (Sitecore, Episerver, Adobe Experience Manager), Marketing Automation (Marketo, Sitecore), and API platforms (Apigee, Mulesoft, Kong).
Let’s talk about how TPP Software can assist you in developing and implementing an omnichannel strategy for the growth of your retail business and loyal customer base.