Everything You Need to Know About Omnichannel in 2017

5 minute read

omnichannel-shopping-experinece-futurepay

 

In today’s channel-rich shopping environment, most people are omnichannel shoppers. In fact, a study of 46,000 shoppers done by HBR found that 73% of shoppers use multiple channels in their customer journey.

 

But what is driving this shift toward a multi-channel shopping experience? It’s the same forces that lead Amazon, the king of online retailing, to open a physical store; and lead Walmart to spend billions acquiring online retailers Jet.com, Modcloth, ShoeBuy, and Moosejaw. There are two main factors: customers’ insatiable appetite to shop how, when, and where they want and the increasingly simple technology that enables retailers to provide that experience. Where omnichannel was once reserved for mass merchants and enterprise retailers, 2017 will see everything from commerce giants to small-and-medium sized businesses moving towards a multi-channel experience.

 

The Scenario

 

Picture this: Isaac, a 24-year-old professional, is sitting on his couch browsing his favorite clothing retailer’s website for a new outfit for a date this weekend. There is one shirt he particularly likes and when presented with a 10% discount code, he decides to buy it using just his username and password to complete the purchase. While Isaac likes a certain pair of pants, he decides to add them to a wish list and head in-store to try them on before pulling the trigger. As Isaac enters the store an associate greets him by name, and already has the pants in his size set aside. The pants fit perfectly, but he scans a bar code and finds them online for 15% off – the associate offers to match the price and brings all of Isaac’s items to the register. Happy with his new outfit, Isaac takes his bags and pays with his smartphone which has a loyalty card stored, saving him an extra 25% off his next purchase. On his way out of the store, a smart-display screen recognizes Isaac and offers him a special discount on a stylish new sweater that matches his taste. After doing some quick mental math on his budget Isaac scans the customized QR code on the display – the sweater will be shipped to his doorstep overnight.

 

While the above story may sound a bit beyond our reach, it’s actually already possible. Mobile devices and mPOS systems can give sales associates a wealth of cross-channel information about individual customers, streamlined mobile payment options allow customers to check out with a username and password, smart retail displays can superimpose clothing and accessories over a shopper’s image, and mobile wallets and retail apps allow shoppers to store payment options, and loyalty cards in their smartphone. While the previous example may have been an ideal situation, it is certainly not beyond our reach.

 

But creating this type of multi-channel shopping experience is both costly and difficult, so naturally it begs the question, “is it really worth it?” Yes, it really is. While attributing the exact dollar figure or percentage gain is incredibly difficult, omnichannel retailers will be better positioned for long-term customer loyalty and growth.

 

Omnichannel Shoppers

 

For starters, most people today are omnichannel shoppers – 73% of shoppers today use multiple channels, compared to just 7% and 20% for online-only and store-only shoppers respectively. But that’s not all. Omnichannel shoppers also tend to be more valuable than other shoppers. In fact, people who use multiple channels spend an average of 4% more every time they are in-store and 10% more online compared to customers that only use one channel. Moreover, each additional channel that a customer uses translates into higher spending in-store.

 

But omnichannel shoppers don’t just buy more, they also buy more often and are more likely to be brand advocates. Omnichannel shoppers had 23% more repeat shopping trips within 6 months of an omnichannel experience compared to those who used just one channel. Moreover, omnichannel shoppers were also more likely to become brand advocates and tell their friends and family about their experience.

 

While retailers have been attempting to create this type of shopping experience for nearly a decade, only recently have the tools and systems required become sufficiently accessible and affordable to do it well.

 

Omnichannel Technology

 

Logistically speaking, creating an omnichannel shopping experience used to be like pulling teeth for warehouse managers and fulfillment directors – every channel added meant an additional layer of intricacy, more opportunity for error, and another column in an ever-complicating spreadsheet. Thanks to advancements in technology, crafting a multi-channel shopping experience isn’t nearly as difficult today as it once was. Perhaps better still, these same improvements have helped us escape the clutches of Excel in favor of more intuitive and useful ways to store and track inventory data.

 

While multi-channel technology has been available to enterprise-level retailers for a few years, albeit for a multi-million-dollar investment, today it is starting to become easier and more affordable for SMBs to add omnichannel functionality as well.

 

For instance, earlier last month Shopify released three new products to help retailers create an omnichannel experience: a mobile store builder, a payment chip reader, and a wholesale channel. The mobile store builder helps retailers bridge the gap between their physical and digital channels, allowing shoppers to connect to digital experiences in-store. Don’t have a physical store just yet? That’s alright, the payment chip reader makes it especially easy for online pure-play retailers to start accepting payments from anywhere – whether it’s a pop-up shop, local market, or full retail front. Finally, while omnichannel retailing is usually thought of from a customer-facing point of view, business-to-business and wholesale channels should not be overlooked as potential high-growth, high-value channels.

 

Channels are Changing

 

Shoppers and retailers aren’t the only things changing these days – the channels themselves are changing as well.

 

Years ago, retailers were only concerned with a few channels. Brick-and-mortar was their biggest concern perhaps with phone and catalogue orders supplementing in-store purchases. But all that has changed. Today there is a surplus of sales channels, with both niche and mass marketplaces giving retailers a platform to connect with their target customer. Amazon, eBay, Etsy, Pinterest, Facebook, Kik, Houzz… and the list goes on. What’s more, is that the channel hierarchy has also changed. Where brick-and-mortar stores were once at the top of the channel food chain, today there isn’t any one channel that is necessarily better than the rest. Rather, it’s up to retailers to decide which channels and marketplaces are best aligned with their brand and target customers.

 

Shift happens. Are you ready for the change?

 

5 minute read

omnichannel-shopping-experinece-futurepay

 

In today’s channel-rich shopping environment, most people are omnichannel shoppers. In fact, a study of 46,000 shoppers done by HBR found that 73% of shoppers use multiple channels in their customer journey.

 

But what is driving this shift toward a multi-channel shopping experience? It’s the same forces that lead Amazon, the king of online retailing, to open a physical store; and lead Walmart to spend billions acquiring online retailers Jet.com, Modcloth, ShoeBuy, and Moosejaw. There are two main factors: customers’ insatiable appetite to shop how, when, and where they want and the increasingly simple technology that enables retailers to provide that experience. Where omnichannel was once reserved for mass merchants and enterprise retailers, 2017 will see everything from commerce giants to small-and-medium sized businesses moving towards a multi-channel experience.

 

The Scenario

 

Picture this: Isaac, a 24-year-old professional, is sitting on his couch browsing his favorite clothing retailer’s website for a new outfit for a date this weekend. There is one shirt he particularly likes and when presented with a 10% discount code, he decides to buy it using just his username and password to complete the purchase. While Isaac likes a certain pair of pants, he decides to add them to a wish list and head in-store to try them on before pulling the trigger. As Isaac enters the store an associate greets him by name, and already has the pants in his size set aside. The pants fit perfectly, but he scans a bar code and finds them online for 15% off – the associate offers to match the price and brings all of Isaac’s items to the register. Happy with his new outfit, Isaac takes his bags and pays with his smartphone which has a loyalty card stored, saving him an extra 25% off his next purchase. On his way out of the store, a smart-display screen recognizes Isaac and offers him a special discount on a stylish new sweater that matches his taste. After doing some quick mental math on his budget Isaac scans the customized QR code on the display – the sweater will be shipped to his doorstep overnight.

 

While the above story may sound a bit beyond our reach, it’s actually already possible. Mobile devices and mPOS systems can give sales associates a wealth of cross-channel information about individual customers, streamlined mobile payment options allow customers to check out with a username and password, smart retail displays can superimpose clothing and accessories over a shopper’s image, and mobile wallets and retail apps allow shoppers to store payment options, and loyalty cards in their smartphone. While the previous example may have been an ideal situation, it is certainly not beyond our reach.

 

But creating this type of multi-channel shopping experience is both costly and difficult, so naturally it begs the question, “is it really worth it?” Yes, it really is. While attributing the exact dollar figure or percentage gain is incredibly difficult, omnichannel retailers will be better positioned for long-term customer loyalty and growth.

 

Omnichannel Shoppers

 

For starters, most people today are omnichannel shoppers – 73% of shoppers today use multiple channels, compared to just 7% and 20% for online-only and store-only shoppers respectively. But that’s not all. Omnichannel shoppers also tend to be more valuable than other shoppers. In fact, people who use multiple channels spend an average of 4% more every time they are in-store and 10% more online compared to customers that only use one channel. Moreover, each additional channel that a customer uses translates into higher spending in-store.

 

But omnichannel shoppers don’t just buy more, they also buy more often and are more likely to be brand advocates. Omnichannel shoppers had 23% more repeat shopping trips within 6 months of an omnichannel experience compared to those who used just one channel. Moreover, omnichannel shoppers were also more likely to become brand advocates and tell their friends and family about their experience.

 

While retailers have been attempting to create this type of shopping experience for nearly a decade, only recently have the tools and systems required become sufficiently accessible and affordable to do it well.

 

Omnichannel Technology

 

Logistically speaking, creating an omnichannel shopping experience used to be like pulling teeth for warehouse managers and fulfillment directors – every channel added meant an additional layer of intricacy, more opportunity for error, and another column in an ever-complicating spreadsheet. Thanks to advancements in technology, crafting a multi-channel shopping experience isn’t nearly as difficult today as it once was. Perhaps better still, these same improvements have helped us escape the clutches of Excel in favor of more intuitive and useful ways to store and track inventory data.

 

While multi-channel technology has been available to enterprise-level retailers for a few years, albeit for a multi-million-dollar investment, today it is starting to become easier and more affordable for SMBs to add omnichannel functionality as well.

 

For instance, earlier last month Shopify released three new products to help retailers create an omnichannel experience: a mobile store builder, a payment chip reader, and a wholesale channel. The mobile store builder helps retailers bridge the gap between their physical and digital channels, allowing shoppers to connect to digital experiences in-store. Don’t have a physical store just yet? That’s alright, the payment chip reader makes it especially easy for online pure-play retailers to start accepting payments from anywhere – whether it’s a pop-up shop, local market, or full retail front. Finally, while omnichannel retailing is usually thought of from a customer-facing point of view, business-to-business and wholesale channels should not be overlooked as potential high-growth, high-value channels.

 

Channels are Changing

 

Shoppers and retailers aren’t the only things changing these days – the channels themselves are changing as well.

 

Years ago, retailers were only concerned with a few channels. Brick-and-mortar was their biggest concern perhaps with phone and catalogue orders supplementing in-store purchases. But all that has changed. Today there is a surplus of sales channels, with both niche and mass marketplaces giving retailers a platform to connect with their target customer. Amazon, eBay, Etsy, Pinterest, Facebook, Kik, Houzz… and the list goes on. What’s more, is that the channel hierarchy has also changed. Where brick-and-mortar stores were once at the top of the channel food chain, today there isn’t any one channel that is necessarily better than the rest. Rather, it’s up to retailers to decide which channels and marketplaces are best aligned with their brand and target customers.

 

Shift happens. Are you ready for the change?