What’s “Omnichannel”? And What Does it Mean for My Business?
As we reach the culmination of the holiday season, it’s interesting to step back and think about how much consumer buying patterns have changed in the last ten years. In fact, it was just 10 years ago (in 2005) that the term “Cyber Monday” was coined by the National Retail Federation. That year, online sales were a healthy $486 million, but the phenomenon has taken hold to an even greater extent since then – in 2014, retailers were expected to conduct approximately $2.6 billion in online sales. That’s an average growth rate of over 20% per year!
In reality, Cyber Monday is merely a reflection of the way that most customers like to shop nowadays; thanks in large part to practices put in place by larger retailers, many consumers expect to be able to flow seamlessly from storefront to online store, where they can compare prices, learn about products, and make purchases.
Background: What is “Omnichannel”?
In recent years, retailers of all sizes have been able to align their businesses to better suit this new model. If you sell goods in-person, it’s now easier than ever to set up an online store as well – not only can your existing customers decide through which “channels” they’d prefer to purchase from you, but it also opens your business up to a whole new potential group of customers as well.
Most commonly today, this notion of providing customers with the same experience regardless as to where they shop is called “omnichannel”. Hubspot has a good definition of what omnichannel means for customers — according to June 2015 blog post, omnichannel is:
“… a multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store.”
Going forward, building a strong omnichannel presence is a great way to get ahead of competitors and boost revenues; while consumers appreciate brick and mortar locations with regular business hours and a stock of items they can examine, test, or try on before purchasing, there’s also something to be said for buying when and where you want!
But For All of the Benefits Associated with Omnichannel, There Are Also Challenges
At the same time, as the number of potential channels (again, channels are the methods by which a consumer can make a purchase) increases, small and medium-sized businesses face more challenges in creating a perfectly “seamless” experience for their customers. From seemingly simple tasks like site maintenance and updating inventory, to more complex ones like truly understanding where and when customers are buying from you, it’s essential to ensure that your omnichannel presence is consistent, accurate, and showing results.
In this post, we’ll examine some of the common “roadblocks” that businesses who sell both in-person and via an e-commerce store face, and take a look at the way that you can go about solving these issues should they arise for your store.
ROADBLOCK 1: MANAGING INVENTORY ACROSS CHANNELS
Potential Problem: Let’s say that you operate a small clothing boutique, and recently began selling your items via an e-commerce store as well. One day, you notice that an order was placed via your website for express delivery. When you go to fill the order however, you realize that the item in question was just sold out in-store that day.
Unfortunately, we take for granted how easily major retailers can keep their items in check and stay one step ahead of the consumer. While the process may not in fact be as automatic as we expect, inventory management is even more critical (and more difficult) for omnichannel businesses.
The right solution depends on the size of the business; if you’re a relatively small store with a limited number of products, you may be able to handle inventory manually, making sure to update your e-commerce store inventory on a daily basis, whereas larger stores need more sophisticated solutions.
For example, companies such as Saleswarp (link: http://www.saleswarp.com/ecommerce-management-software-overview/) help businesses that typically do over $5m in annual revenue with this specific problem. For businesses that fall somewhere in the middle of the spectrum, companies such as ecomdash (link: https://www.ecomdash.com/omnichannel-retail-software-offers-shopify-pos/) have integrations with popular website builders such as Shopify, and can help you manage your growing omnichannel business.
And of course, on the rare occasion that you do run out of inventory, it’s always best to notify the customer as soon as possible. A personalized note, accompanied with a discount on future purchases or similar benefit, offers the opportunity to create a positive customer service experience out of an otherwise negative situation.
ROADBLOCK #2: ENSURING ACCURATE PRODUCT INFORMATION ACROSS CHANNELS
Potential Problem: A customer approaches you and identifies an item priced at $20 in store. After going home and deciding the next day to purchase the item online, the customer sees that the same item costs $25 online. All the while, there has been no indication anywhere in store or online of a sale for customers who purchase directly from the brick-and-mortar location.
On the surface, keeping product information consistent seems like an exercise in attention to detail; just make sure everything is priced the same everywhere, right? Unfortunately, it’s usually much harder than that — in an environment where you’re selling online and in-store, with hundreds of products which change on a regular basis, managing product information is nearly impossible to do manually. What’s more, product information doesn’t just stop at pricing; things like color, size, and descriptions all play an important role in the customer’s decision whether to buy from your site/store or go somewhere else.
So how can you go about making sure that your product information is the same everywhere? BigCommerce’s blog recommends starting with consolidation. In other words, the first step is to take all of your product information and make sure that it resides in a single location — from there, employees can begin to access, update, and publish product information to multiple channels more rapidly.
Another interesting best practice, particularly for businesses who may sell products that are sold by other retailers, is to differentiate by writing unique, memorable product descriptions. In the early days, Groupon gained a great deal of popularity quickly thanks to their witty, memorable product descriptions.
If you don’t have a future writing zany product descriptions, not to worry! Other great ways to differentiate include videos of the item being used and high-res photos, both of which work well if properly maintained across channels.
ROADBLOCK #3: UNDERSTANDING CUSTOMER BEHAVIOR ACROSS CHANNELS
Potential Problem: A loyal customer who you’ve grown accustomed to receiving an order from via your website every month suddenly stops purchasing. Curious as to what happened, you send her an email asking whether there’s anything your store could be doing better. “Oh, I still love your store!” she replies. “In fact, I’ve recently been stopping by in person instead!”
While understanding customer behavior and purchasing patterns can be difficult in a single channel, the challenge becomes even more complex when customers begin shopping across multiple locations. Solving the challenge is extremely worthwhile though, as better customer insights can lead to more focused, relevant marketing activities. For example, in the hypothetical above, the nature of your email to the loyal customer might have been much different had you known that she had been shopping in the store recently instead!
But often times, you simply don’t get a lot of information about somebody when they make a purchase in-person, which makes it harder to identify whether that customer has ever purchased from you online as well. That being said, creating a single record of customer activity across channels is still very much achievable — here are a couple of ways you could go about doing it:
Method 1: Email Capture and Matching
This first method requires a bit more manual labor, but it’s also a cost-effective solution, particularly for relatively small businesses that sell both online and in-store.
To start, find a way to capture your customers’ email addresses when they purchase from you in-store. This might involve simply asking them for it and recording it alongside the transaction in whichever system you use to record your sales, or it might involve giving them a small discount in exchange for providing it.
Next, combine your list of purchases (both in-store and online) into a spreadsheet. If your business is relatively small, you might be able to look at the spreadsheet manually to determine which customers are buying from you both in-person and online. If not, you can set up a simple grid to gain much deeper insight. Here’s an example of what that grid might look like:
For even more detail on how to set up your spreadsheet, just reach out to us at firstname.lastname@example.org – we’d be happy to help you out.
Method 2: Rewards Program
At first glance, a rewards program might not seem like it has a lot to do with being able to track customer activity across channels. But by giving customers a reason to volunteer their information (so that they can make sure they earn their points), you can use the information you capture about their point-earning activities for marketing purposes as well.
For example, by signing customers up for your rewards program across channels, Swell can create a consolidated, live view that shows how customers are shopping with you:
In a different screen, businesses can get an up-close look at how individuals are shopping with them, detailing specific activity and account history:
Programs such as these open a new door in terms of both customer service and marketing – seeing where and when a consumer is shopping with you, as well as how much they are spending gives you a major advantage over the competition.
What Should I Take Away From This Post?
More and more, businesses of all sizes are taking advantage of the opportunity to reach customers across multiple “channels”; however, with opportunity comes a fair share of potential obstacles. From keeping tabs on in-store and online inventory to maintaining close contact with customers, avoiding a few key pitfalls can make all the difference between a smoothly-running omnichannel machine and a major headache!
Fortunately, there are a wide variety of solutions available to omnichannel businesses today. If you’d like to discuss which solution(s) are right for your business in particular, feel free to get the discussion going in the comments below, or send us an email at email@example.com!