Reaching Today's Omnichannel Customer Takes a New Sales Strategy
Selling is changing, but broad generalizations and false dichotomies about ecommerce, big data, and other trends—hallmarks of current sales advice—are keeping business leaders from making sound decisions, says Frank Cespedes, author of a new book that aims to separate signal from noise.
In Sales Management That Works: How to Sell in a World That Never Stops Changing , Cespedes, a senior lecturer at Harvard Business School, offers research-based insight and context, and presents sales productivity not only as a core way to increase profit and value, but also as a social imperative.
As an example of sales-related hyperbole, Cespedes points to the dire predictions that online buying will eventually cause the real-life “death of a salesman.” While online information sources affect selling, retail sales through ecommerce increased only 5 percentage points from 11 percent in 2019 to 16 percent last spring, at the height of pandemic lockdowns. And before the pandemic, social media use had been flat for four years as these advertising channels became more cluttered and distrusted, offering marketers diminishing returns.
“Managers must move beyond platitudes and develop an accurate view of their current situation and how it might evolve,” Cespedes writes in the book’s introduction. If not, he says, they will make decisions based on bad assumptions and fall victim to those who do understand cause-and-effect links between buying and selling.
We talked to Cespedes about the challenges of modern-day sales management. The conversation has been edited for length and clarity:
Kristen Senz: What shifts in sales should managers and executives be aware of right now?
Frank Cespedes: Prospects are now online and offline throughout the buying journey, collecting information from user reviews and other sources. But most sales models are based on a linear “pipeline” view of buying and need updating. However, while it’s an omnichannel buying world, it’s not a digital-eats-physical world, and that has implications. Sales competencies are changing. Hiring in sales, even before the pandemic, was becoming increasingly tough and more expensive.
"While it’s an omnichannel buying world, it’s not a digital-eats-physical world, and that has implications."
Another element is training and development. Companies, on average, spend about 20 percent more per capita on sales training than any other business function. But the ROI is disappointing because much of the training misunderstands how salespeople learn, is classroom-centric, and fails to take advantage of new tools that stimulate peer learning and enable the use of information when reps need it, not months earlier in a training seminar.
The other implication is sales models, most of which are the ad hoc accumulation of decisions that different managers made pursuing different objectives, usually quarter by quarter. Changes in buying have exposed the loose screws in those models.
A coherent sales model has three fundamental components: actionable customer selection criteria (because resources spent on accounts A and B are not available for accounts C, D, and so on); clarity about the buying process for target customers as it works today, not yesterday; and the go-to-market economics, including the cost-to-serve different segments and relevant metrics and incentives.
Additionally, when market lifecycles are shorter, you must reconstruct sales models more often, and this must be done while the ship is under full sail in an ocean where you don't control the weather. That's not easy, but it's not the responsibility of the market to adapt to your company; it’s your responsibility to adapt to the market.
Senz: What lessons should sales managers learn from changes in buying behavior during the pandemic?
Cespedes: First, beware of the many predictions you hear about the “new normal.” Most are simplistic straight-line extrapolations of buying behavior in socially distanced contagion conditions. Second, the pandemic has accelerated trends that were in progress before, like omnichannel buying and multichannel selling. Third, the need to ramp-up virtual sales models during the pandemic demonstrated that many companies were overpaying for some tasks, especially lead generation, demos, and certain types of meetings—many of which can be accomplished with either less expensive people or, sometimes, algorithms.
Senz: What's the most important piece of advice about pricing you can offer?
Cespedes: Can I give two? First, pricing and value are inherently intertwined. Yet, most companies use cost-plus pricing. That's dangerous in an information-rich world. Amazon, for instance, takes thousands of SKUs for consumer goods and distills this into price-per-ounce comparisons. So, if you don't manage this proactively, others will, and they don't have your best interests at heart. Contrary to conventional wisdom, moreover, value-pricing approaches are more available in many categories, as the examples in my book show. The issue is understanding the relevant unit of customer value and having a sales channel that can frame and articulate that value.
Second, price-testing is increasingly important. In his autobiography written in 1963, ad man David Ogilvy noted that, “Most people assume companies use scientific methods in pricing, but throughout my career, I have found that it is usually guesswork.” That's been my experience as well. Price-testing via A/B tests, different online and offline proposals, and other means is more easily done, but many firms remain unnecessarily passive in this area.
Senz: Why is sales hiring so difficult and expensive?
Cespedes: There are inherent challenges in sales hiring. If you want an engineer, accountant, finance person, or programmer, you can find people who majored in those subjects, but few schools have sales programs or even a sales course. Also, research consistently shows that managers overestimate their ability to predict job performance on the basis of interviews. The correlation between a manager's assessment of people in interviews and their actual on-the-job performance is less than 50 percent. In other words, less than flipping a coin, and usually much less in service jobs, like sales. You should not eliminate job interviews, but you should augment them, do them differently, and supplement them with other activities that I discuss in the book.
Also, required competencies are changing. Omnichannel buying makes the selling company more transparent to customers, who can “touch” that company at different places. The result is that salespeople not only have to use more data in their selling activities, but there's more cross-functional coordination required.
"Improving sales productivity ... affects growth, civic discourse, and the lives of millions of people."
If a buyer has a problem, they typically call the person who made the sale, whether or not the problem is within that person’s purview. As a result, salespeople have to bring those other functions together. Similarly, multichannel selling changes competencies. For one thing, reps who were successful individual contributors now have managerial as well as selling tasks. Those are difficult transitions that affect sales training and hiring criteria.
Senz: You discuss sales productivity as a social responsibility for firms. Can you explain what you mean?
Cespedes: Especially in services-dominated economies like the United States and other nations, selling is a key part of productivity and growth. And as the Harvard economist Benjamin Friedman has shown, growth has moral consequences in terms of a society’s tolerance for diversity, social mobility, correcting inequalities, and democratic values. CEOs who opine about “stakeholders” should also look homeward. Improving sales productivity is not only about profit maximization and shareholder value—which, by the way, I don't think a CEO or Harvard Business School needs to apologize for—it also affects growth, civic discourse, and the lives of millions of people.
Bureau of Labor Statistics data indicate that about 12 percent of the US workforce works in sales (versus 6 percent in manufacturing), and this underestimates the number. Lots of people who do business development for a living are called “partners” or “associates,” not salespeople. Sales productivity is a core social responsibility of management, and I hope my book helps managers better understand that responsibility and how to fulfill it.
About the Author
Kristen Senz is the growth editor of Harvard Business School Working Knowledge. [Image: Shutterstock/Josep Suria]
How is the selling approaching changing at your company?
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By Frank V. Cespedes
There is no doubt that talent matters and that sales stars exist. But an overreliance on stars from outside organizations can 27 have unintended consequences.
28 Differences in individual sales performance are very wide in most firms. The top 20 percent of salespeople often account for 50–60 percent of their company’s revenues. As one study notes, if 20 percent of your salespeople are making 60 percent of revenue, that’s a 3X multiplier; and since the remaining 80 percent bring in only 40 percent of revenue, that is a .5X multiplier, meaning that the top sellers are 6X more productive than their peers.
Sales is like other creative occupations where the stardom phenomenon is well documented. In areas like software programming, the arts, sports, and others, the best are not just a bit better than the average. They are typically a lot better: the top 1 percent often outperform average performers in those fields by 125 percent or more. Performance profiles in those areas are (in statistics terminology) a “power distribution curve,” not a normal-distribution bell curve.
However, as my colleague Boris Groysberg has documented, stardom is not easily portable. Less than half of performance in the jobs he studied stemmed from individual capabilities, and the rest from firm-specific qualities and resources—for example, brand, technologies, training, team chemistry, and other factors. This is especially true in sales because sales tasks are determined by a firm’s business strategy and its choices about which customers to focus on. In turn, selling behaviors are affected by your control systems and culture as well as whom and how you hire. Those are all firm-specific factors.
Hence, when you hire a star from another firm, that salesperson leaves all of that behind. Talk to the corporation that hires the star sales VP from a competitor and finds that she doesn’t perform there the way she performed in the previous corporation. Or consider the many startups that bring in an experienced big-company rep and he flounders in the early-stage firm. Those people didn’t suddenly get stupid or lose individual capabilities. In business, there’s no such thing as performance in the abstract. There is only performance in a given context—here, not there—and much of selling depends upon the relationships, knowledge, and mutual trust that the rep establishes with others in the company.
Further, the effects of successful talent management seem to be cumulative: good people learn from each other. Again, this is especially true in sales, where modeling behavior is a key driver of how people develop. Average reps get better by watching how the best of their peers perform key tasks. They pick up important lessons about how to pitch, how to answer objections, how to deal with competitive comparisons, and other aspects of selling that product at that price in that market. This is one reason why ride-alongs, coaching, reviews and best-practice dissemination are so important.
Sales is a performance art, salespeople exhibit a wide variance in performance outcomes, and those outcomes depend upon innate talent as well as the context in which that talent is found, nurtured, and deployed.
Reprinted by permission of Harvard Business Review Press. Excerpted from Sales Management That Works by Frank Cespedes. Copyright 2021 Frank Cespedes. All rights reserved.
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Omnichannel: The path to value
Offering a compelling omnichannel experience used to be the bleeding edge of retail. Now it’s a requirement for survival. More than one-third of Americans have made omnichannel features such as buying online for in-store pickup part of their regular shopping routine since the pandemic, and nearly two-thirds of those individuals plan to continue. Younger buyers are the most enthusiastic about new ways of shopping. Most Gen Z consumers don’t even think in terms of traditional channel boundaries, our research shows, and they increasingly evaluate brands and retailers on the seamlessness of their experience.
But before retailers rush to expand their omnichannel capabilities, they need to step back and consider the underlying drivers of value for their specific business. Otherwise, with multiple approaches and technologies to choose from, and acute margin pressures, retailers can invest in the wrong thing and quickly fall into a downward spiral that can destroy value.
Omnichannel excellence requires a laser-like focus on value creation. Leaders in the field take a hard look at their strategic and customer priorities and decide who they want to be from an omnichannel perspective. And they develop an equally clear-eyed understanding of what it will take to achieve that ambition. By embedding these principles into their retail strategies, leaders can use the momentum—and urgency—of the present moment to create decisive advantage.
A lack of clarity hobbles many efforts
We find that retailers are often swayed by new technologies that sound promising, but too often don’t deliver. Many also have a murky understanding of how omnichannel creates value. Some fashion brands, for instance, have been slow to push e-commerce, given the high cost of shipping and returns, and the fear that online channels cannibalize in-store sales. Others fund ad hoc investments that yield only marginal improvements in the overall shopping experience. We see these three common issues:
- Unclear understanding of what parts of omnichannel to prioritize. Too few retailers have established alignment across their organization on the omnichannel agenda, including the long-term vision and the current status. Without strategic alignment, organizations often end up investing in a scattershot fashion, funding divergent priorities in e-commerce, store operations, supply chain, marketing, and technology.
- Focus on tech rather than on customer value. Many retailers have leaped to embrace tech-enabled, flashy innovations like smart mirrors, Bluetooth beacons, and in-store kiosks to create differentiation. But without a proper grounding in customer needs or determining how these investments will create and sustain value at scale, retailers sometimes end up with what amount to shiny objects that drain capital expenditures.
- Failure to sequence investments in line with strategy. Many retailers race to advance omnichannel initiatives without doing the critical thinking to identify the starting point and the specific capabilities needed to succeed at each step. Pressure to keep pace with competitors or eagerness to put a compelling idea into action can prompt some companies to plunge in headfirst. But without clearly sequencing the “crawl, walk, run” approach and investing in the right fundamentals, retailers often end up with fragmented investments that destroy value.
Charting your ambition
The most successful retailers let their strategic ambition and aspirational customer experience determine what omnichannel strategy to pursue . When the underlying ambition and capabilities are misaligned, retailers tend to stumble. While omnichannel has many variants, there are three primary strategies: commerce, personalization, and ecosystem (Exhibit 1).
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These three strategies are part of a continuum, with omnichannel ecosystems being the most advanced. Retailers can stick with one strategy, go deep, and then excel as a commerce or personalization leader, or, with the right fundamentals in place, they can move along the continuum into an ecosystem and expand into other business models over time. More importantly, each strategy has proven to be viable in creating long-term value, if executed well.
Commerce. Retailers that take this approach—both physical-first and digital-first brands—often prioritize one channel and invest in targeted cross-channel connections to support the buying experience, such as the ability to order online and return in store. At the most basic level, this model allows retailers to meet the minimum threshold for omnichannel performance. But retailers with more advanced capabilities can take it to a very different level. Best Buy, for instance, has burnished the in-store experience with curated offerings that allow customers to explore smart-home technology solutions, which they pair with free in-home advisory services. The retailer’s mobile app allows customers to “scan to shop” from catalogs and curbside, and offers the ability to buy online for pickup in-store, making it easier for consumers to move through the journey end to end, supported by 24/7 tech support from the company’s Geek Squad. These investments have paid off. Customers signed up in droves to participate in Best Buy’s Total Tech Support offer, with memberships soaring from 200,000 at launch in 2018 to two million one year later. And although Best Buy fronts the cost of its in-home advisory, they found that customers who avail themselves of it spend more and generate more profits than those who don’t. Born-digital retailers are taking a similar tack. Companies such as Warby Parker and Everlane prioritize digital, but they’ve added a physical retail presence to drive brand awareness and greater consumer convenience.
Personalization. While most retailers personalize engagement and outreach to some degree, those that pursue omnichannel personalization go far beyond rudimentary retargeting and lookalike segmentation. They shape consistently tailored interactions across channels, and they do so continuously and at scale. Sephora, for example, provides consumers with rich in-app messaging, personalized push notifications, and the ability to book in-person beauty consultations from their phones. In-store technology allows “cast members” to access a customer’s favorite items and suggest new products that align with the customer’s profile. Customers can also use scanners to match products to their specific hair color and skin type. Its Beauty Insider loyalty program taps unified customer data and links offers across email, web, and mobile to drive online and in-store purchases. Achieving this level of personalization takes significantly enhanced data-management capabilities and process integration. But they allow Sephora to capture greater value. For instance, data showed that customers who visited the retail website within 24 hours of coming to the store were three times more likely to make a purchase and the order values were 13 percent higher than for other customers. 1 Brian Honigman, “How Sephora integrates retail & online marketing,” eTail, 2019, etailwest.com; “Sephora to expand brick & mortar footprint with 260+ new stores in 2021 across the U.S.,” Sephora Newsroom, February 25, 2021, sephoranewsroom.com. Knowing that online engagement was driving in-store sales helped Sephora understand where to invest. In all, Sephora reports that its omnichannel business saw record sales in 2020, and the company is planning a major expansion of its physical store footprint.
Ecosystems. This model extends the brand experience, providing consumers with an ever-growing platform of content, offers, and community-based interactions. Instead of turning to a retailer for occasional interactions, consumers make omnichannel ecosystems part of their lifestyle. It’s an always-on relationship that can pay ample dividends. Nike, for example, uses its SNKRS and Run Club apps to foster in-person meet-ups, running groups, and events. Its Training Club app delivers individual workouts and multiweek fitness programs. These investments allow Nike to create experiences that go far beyond their shoe and apparel lines and fold the brand into an individual’s day-to day-routines. Omni ecosystems like these also help retailers expand into adjacent business models. For example, Starbucks’ more-than decade-long investment in mobile ordering, payments, rewards, and personalized experiences has yielded more than $1 billion in prepaid customer mobile deposits—a deposit base that exceeds the level of many banks. Those cash reserves give Starbucks a foundation to move into new areas that can broaden and enrich the experience it offers its customers. For example, the company issued a unique licensing agreement for its industry-leading software to Brightloom, a company in which Starbucks now has an equity stake that increases in value as other retailers and brands benefit from its long-term focus on enabling omnichannel technology platforms.
Redefine the omnichannel approach: Focus on what truly matters
How to choose.
Top-performing retailers align on a north star based on their strategic and customer goals, then set their omnichannel course accordingly. A mass apparel retailer, for example, knew it needed to both expand its e-commerce capabilities and revitalize the in-store experience. But the commerce model wouldn’t give them enough advantage, since peers in the same hotly contested space would be racing to acquire the same capabilities. Additionally, the ecosystem would be overreach, since data revealed that what customers really wanted were richly tailored experiences. The personalization model was most likely to appeal to the company’s core audience and create more durable relationships—benefits that would provide more sustainable differentiation over the ensuing two to three years.
As this retailer demonstrates, figuring out which version of omnichannel to embrace requires looking beyond the current horizon, reflecting on the company’s mission, and identifying where the experience can truly serve to differentiate an organization from its competition. Customer expectations and brand positioning matter. Many retailers want to offer personalized experiences; indeed, they’re becoming table stakes for some brands. But personalization can be less relevant to brands where accessibility and convenience are more important to the customer. Similarly, an ecosystem model featuring extensive content, partnership, and community interactions might generate more value for vertically integrated players than it would, say, for a convenience store. Moreover, when retailers try to leap to the next level without establishing adequate foundational capabilities, they often fail.
What does your ambition entail?
Each omnichannel model has certain foundational elements that make it work (Exhibit 2). For example, in personalization, companies that want to succeed must have integrated cross-channel data; flexible site and app infrastructure; a tech stack that enables personalization; omnichannel inventory-fulfillment capabilities; and cross-functional teams that personalize key touchpoints across the value chain.
These are the core requirements that give retailers the right to compete in a given space. In addition, retailers should consider the handful of additional capabilities that can help them stand out from their peers and deliver exceptional value, such as a compelling in-app feature for loyalists. Understanding both what is core and what can give them leadership allows retailers to place their bets more strategically, giving management the clarity needed to ensure buy-in and alignment on the agenda.
What is your starting point?
Companies need to take a hard look at their existing resources, market position, and customer relationships, then align on a starting point and an ambition that is both realistic and a value driver for the business. The apparel retailer mentioned earlier, for instance, recognized that although its sights were set on omnichannel personalization, its customer data, content management, and mobile app capabilities were not yet sufficient to reach the objective. The company set a goal to achieve its ambition within three years, focusing first on reaching competitive parity in the commerce model, then acquiring enhanced personalization capabilities to give customers a reason to invest in the brand relationship. It didn’t need to master every commerce skillset to advance, but it had to shore up some key dimensions, including cross-channel metrics, a tech platform to house relevant data, a system to improve inventory visibility, and the onboarding of digital-native and technology talent.
Leadership also decided what not to fund going forward. For example, the company recognized that the “store of the future” improvements they were financing before the pandemic were no longer so important in the near term. In our experience, most companies can advance a maximum of two to three omnichannel initiatives concurrently. Having sufficient confidence in the omnichannel vision to take things off the table and deprioritize previous initiatives is imperative.
Mastering the basics can allow leaders to apply their insights in more ways—with the learning and value compounding over time (see sidebar, “The most important omnichannel decisions to get right”).
The most important omnichannel decisions to get right
Interview with christiana shi, former president of nike’s direct-to-consumer business.
Christiana Shi is a founder and principal at Lovejoy Advisors and the former president of Nike’s direct-to-consumer business. Having helped grow that brand’s omnichannel capabilities, her first piece of advice to others is to pick a true north and stick with it. “If retailers know that everything has to be in the cloud, they should pick up their platform migration. If they know their business must be mobile, their mantra should be ‘mobile first,’ and they should accelerate app and mobile web investments.”
Her second piece of advice is to solidify the bootstrap changes retailers made during the pandemic, such as curbside pickup. “It amazes me,” she adds, “how many retailers quickly shifted their models to offer buy online and pick up in store and other omnichannel services, but then didn’t change their staffing and incentives on the back end to support these moves. Long lines of disgruntled customers waiting for harried employees to fetch items from the stockroom is not a recipe for customer satisfaction.”
Third, Shi advises, peg your tech investment to a percentage of revenue. “Whatever you spend on digital tech this year, don’t promise the board that spend will go down. Every year the bar will go up, and retailers need to stay competitive, so every year, look for room in your profit and loss to fund that. We’re in an era with constant spend on technology. Retailers have to be flexible.”
Finally, she says, it’s crucial to understand the progression of skills needed to grow in omnichannel maturity. Most retailers want to offer a fully integrated marketplace, for instance. But to deliver that, retailers not only have to guess how many items will sell by size, color, and style, they need to know where to position those goods. Will customers want the item shipped to their home or will they pick it up in the store or will they want to try it on first? Integrating the data, analytics and logistics to enable this degree of inventory management requires a high degree of sophistication.
Retailers must become expert at anticipating from one season to the next what products and services will excite consumers. Now they have to bring that same sensibility to omnichannel. Those that set a clear ambition with a clear path to value will not only de-risk the present but will secure their future. Leaders must get on that path quickly. Those who are ready to start should think through the following questions:
- Where are the greatest value pools for omnichannel within our business, and what is the fact base to help us inform and clarify choices? How can we size the value at stake?
- Who do we need to convene within our organization to align on defining our starting point and our “north star” ambition? Where do we agree or dissent?
- Which initiatives and corresponding capabilities should we prioritize or deprioritize over the next 12 months?
- In three years, what do we want to say we have achieved within omnichannel? How would that position our company internally and relative to our competitors?
Holly Briedis is a partner in McKinsey’s Dallas office; Brian Gregg is a senior partner in the San Francisco office, where Wei Wei Liu is an associate partner; Kevin Heidenreich is a consultant in the Seattle office.
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Today’s business landscape accelerates the need for omnichannel.
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Omni channel technology of online retail business. Multichannel marketing on social media network ... [+] platform offer service of internet payment channel, online retail shopping and omni digital app.
Putting customers at the center of retailers’ business strategy has led to the growth of onmichannel. At a time when customers seamlessly peruse from websites to social media, shop in-store while comparing prices online, and expect instant gratification coupled with the best deals available – ominchannel is the only way to deliver the experience that customers want and have come to expect.
Of course the pandemic has played a key role in advancing the need for omnichannel retailing. Almost everyone was forced to stay home for months on end, physical stores shut their doors for indefinite periods of time, and consumers needed to locate many hard-to-find items, such as hand sanitizer and masks, so they satisfied these needs by turning to the only thing they knew they could rely on – the internet. And shopping on any site or app that could deliver their necessities.
Majority Of Customers Shop Across Multiple Channels
A recent Harvard Business Review survey of 46,000 shoppers found that only 7% shopped exclusively online, 20% were in-store only shoppers, and 73% of customers moved across multiple channels – proving the significance and importance of omnichannel retailing. And social integration plays a big role. Whether a customer wants to shop directly on a social media platform or through social media posts shared on a company’s website, the process should be harmonious.
The idea is this: a blogger wears a brand’s article of clothing, that blogger shares an image on their own social media page, the brand then reposts that photo, which auto-populates on the company’s website, and the image is clickable, on both the social platform and the website, to link directly to the product page and make a purchase with a couple simple clicks of a button. No matter where customers comes across items they want to buy, they should be able to simply find the product and make a purchase, without having to search for the item.
Provide A Consistent User Experience
Have you ever been shopping on a brand’s app, putting items into your cart, and happen to switch to their website only to find that none of the items you’d selected are any longer in your shopping cart? That is a perfect example of a company that hasn’t put efforts into their omnichannel strategy. And it makes for a much worse user experience than if all of your selections, likes, cart, etc. were seamlessly saved on all of the company’s platforms – whether you are shopping their website, on their app, through their social pages, or even accessing your customer profile in-store.
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There are so many things to consider to provide the optimal experience for customers.
If a customer clicks on a promotion in an email campaign, will the company app automatically open up on their phone, or will the website open up on a web browser if they don’t have the app installed?
Can customers access all their past orders on their account profile online and in-store, no matter which platform they made the original purchase on?
Are their size preferences and shopping history saved across all platforms to provide the best recommendations?
These are all key things to consider to ensure customers have the utmost seamless shopping experience.
At a time when online shopping is taking over brick-and-mortar businesses, omnichannel offers an opportunity to leverage physical store locations, marry them with the online experience, and exceed customer expectations.
Stay Abreast Of New Technology
With new social media platforms emerging and advances in augmented reality, and virtual reality, it’s critical to have a team focused on how to seamlessly integrate new technologies with a company’s current infrastructure.
Even a social platform like Clubhouse, that strictly allows people to host conversations, has opportunities for retailers to expand their business. Conversations around product development can be hosted with top customers, focus groups can be created to glean insights on marketing campaigns, product selection, store design, and so much more. There’s also opportunity to learn from competitors or other business leaders, and create a following.
The drop-in audio app was created in April 2020 and had over ten million weekly active users as of February 2021. It doesn’t serve as yet another e-commerce platform but it does provide a great avenue for discovery, feedback, and idea generation. Definitely something noteworthy to pay attention to as part of a company’s growth strategy.
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Omnichannel Statistics for Marketing and Customer Experience 2023
- Updated December 12th, 2022
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Omnichannel customer engagement is becoming increasingly popular as business owners and marketers seek to provide a seamless experience across all devices.
94% of retail companies now use multiple channels to engage with customers.
According to a recent survey, 61% of American consumers prefer online shopping over visiting physical stores. And try not to forget about the U.S. Millennial generation, which is actively using all the digital channels for shopping purposes.
In this article, I will demonstrate omnichannel statistics for marketing and customer experience.
Why You Can’t Avoid Omnichannel in This Age of Competition
Today, more than two-thirds of all purchases are made with the help of some kind of digital device. Prospects browse and research using their smartphones, then buy in-store or on a desktop. Maybe even later that day from their smartwatch.
Each channel has its own strengths, weaknesses, and quirks. And yet, many brands force their customers through a series of checkboxes for each channel to fulfill a buying process. That’s why omnichannel is so critical, especially when you’re talking about mobile.
By embracing omnichannel retail we’re able to deliver the best possible experience at each touchpoint, whether it’s a mobile app, in-store interaction, or talking to an in-house expert over the phone. When you take the time to think about the different ways your customers interact with you. It opens the door for you to deliver a better experience for everyone.
- An omnichannel marketing strategy is the combination of all the different types of sales, marketing, and fulfillment strategies you use to get your brand’s message out to your customers.
- It’s important to remember that these channels are not siloed; they all play an active role in influencing each other and working together is what contributes to your success.
7 Important Omnichannel Marketing Statistics 2023
Omnichannel marketing aims to enhance the customer shopping experience by integrating multiple offline and online channels. This is not only about using various channels, but also about making the most of them by leveraging them at the right time and in a high-impact manner.
As such, it is not simply a matter of taking your offline marketing efforts online and vice versa, but also about bridging the gaps between all these channels. So that you can deliver a seamless experience to the customer.
Now, let’s take a look at the 7 top omnichannel marketing statistics for 2023;
- The Harvard Business Review found out that around 73% of customers prefer shopping through multiple channels. Similarly, 7% of customers shop online exclusively, and 20% of them shop merely in-store.
- Google found that omnichannel customers have a 30% higher value than those who shop using only one channel. It shows that omnichannel customers can generate more revenue.
- By 2023, e-commerce will account for 23% of all retail sales globally. In 2017, this figure was 15.3%.
- Due to the seamless communication experience, nearly 80% of customers prefer omnichannel strategies.
- 90% of retail leaders agree that a seamless omnichannel strategy is crucial for business success.
- Harvard Business Review’s research found that omnichannel customers spend 10% more online as well as 4% more in-store than single-channel customers.
- According to the Think with Google indication, omnichannel strategies generate an 80% higher rate of incremental store visits by consumers.
7 Important Omnichannel Customer Experience Statistics for 2023
The customer experience is a crucial aspect of online retail. The report, released in February 2016, examines omnichannel strategies and tactics using data from the 2015 E-Commerce Impact Study. It’s important to note that while a majority of the survey participants reported selling products through multiple channels, “the vast majority of retailers can’t claim that distinction.”
Overall, the report found that just 15% of online retailers are doing an excellent job of providing an overall, seamless experience for customers. However, this percentage is higher for retailers selling through both high-touch and low-touch channels.
In order to improve, retailers need to work on streamlining their customer data from all sales channels, leveraging customer insights across sales channels, and ensuring that customer service is consistent across channels.
Let’s take a look at the 7 best omnichannel customer experience statistics;
- Companies which has omnichannel customer engagement see a 9.5% year-over-year surge in annual income, in comparison with 3.4% for companies that don’t have one. Likewise, solid omnichannel businesses see a 7.5% year-over-year reduction in cost per contact, in comparison to a 0.2% year-over-year reduction for weak companies. (Aberdeen Group)
- Companies with solid omnichannel customer engagement typically retain 89% of their buyers, in comparison to 33% of businesses with weakened omnichannel customer experience . (Aberdeen Group)
- 77% of solid omnichannel companies store customer data across channels, in comparison with 48% for poor omnichannel companies. (Aberdeen Group)
- 55% of companies do not have a cross-channel strategy in place. (The CMO Club).
- Businesses with omnichannel customer engagement techniques keep on average 89% of their customers, in comparison with 33% for businesses with weakened omnichannel customer engagement. (Aberdeen Group)
- 49% of customers purchase from their favorite omnichannel brands at least once weekly (Marketing Land)
- 48% of purchasers will share information for personalized services (Deloitte)
Why Do Modern Customers Expect an Omnichannel Experience?
Because modern customers want to shop in the way that is most convenient for them, they’re not willing to settle for anything less than an easy and delightful shopping experience.
But today, increasingly, their needs are not being met on their terms. It’s time for retailers to step up, recognize the expectations of today’s customers, and adopt across channels.
In fact, a recent survey revealed that two-thirds of consumers are least likely to purchase from an organization that does not offer an integrated omnichannel experience .
And 59% of respondents said they would choose a competitor that offers a seamless shopping experience if given the choice.
- Today’s customers want to feel welcomed and valued across every interaction with a brand.
- They want the same level of expertise and service across every channel — and they won’t hesitate to go elsewhere if they feel like they just don’t matter enough.
So it’s time for retailers to start thinking of their customers as customers — not just in-store or online, but as customers all the time, everywhere they are. I hope these omnichannel statistics help you to get more insight into customer engagement.
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Juwel is a Sr. Content Writer at REVE Chat. He specializes in writing about customer service and customer engagement. He is passionate about helping businesses create a better customer experience.
He strongly believes that businesses will be able to understand their customers better and ultimately create more meaningful relationships with them.
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10 Steps to Business Growth Using Omnichannel Marketing
In recent years, an omnichannel approach to marketing and sales has shifted from cutting edge to essential.
Customer experience, technology and increased consumer awareness have converged as core business priorities. And customer behavior has transformed to demand full integration between in-store and online.
Enter the omnichannel solution, whereby CX is intentionally consistent no matter which medium consumers prefer.
Target, in 2020, discovered that the use of omnichannel strategies led to increased sales , with omnichannel shoppers spending up to 10 times more than those who only bought in-store or online.
And a report from Omnisend found that brands using three or more channels (compared to those with two or fewer) see a 90% higher customer retention rate and 250% higher engagement and purchase rates.
In this article, we'll take a closer look at what omnichannel is, how companies use it and how you can capture the benefits, too.
What Does Omnichannel Mean?
Omnichannel is the integration of the different channels a business uses to interact with clients. It includes physical locations (a store) and digital channels, like social media, email, websites and apps.
One of the biggest drivers of profitability in today’s marketplace is convenience. In a 2020 NRF survey , 97% of shoppers said they’ve backed out of a purchase because it was inconvenient, and 83% said convenience is more important now than five years ago.
Omnichannel retail and marketing maximize a product or service's reach while making purchases more convenient. For instance, shoppers can choose between buying online with home delivery, buying online and collecting in person or buying in-store.
And omnichannel isn’t only for retail and ecommerce. It’s also valuable for:
Omnichannel gives consumers more choices and access to real-time information. It also puts them at the helm of brand experiences, empowering them to shop in their preferred manner while interacting with brands on their terms. And while convenience drives commerce, personalization drives customer experience. With an omnichannel strategy, you can leverage both.
Omnichannel marketing integrates branding, messaging and a combination of online and offline key touchpoints. It places the consumer at the center of the strategy, aiming to make every process as intuitive, rewarding and consistent as possible.
Core elements of omnichannel marketing include:
- Smart content that remembers past interactions and recognizes the current stage of the customer journey
- Consistent brand imagery, voice, vision and messaging
- Personalized interactions based on user profiles
Omnichannel retail, sales or commerce is an approach to the customer buying journey. Its aim is for customers to enjoy a smooth, cohesive experience across all channels: brick-and-mortar stores, laptops, tablets, smartphones and IoT devices.
Many of today’s consumers conduct research before buying, including watching demonstration videos, reading forums and seeking out reviews. Some shoppers even use their devices in-store to ensure they’re making informed decisions. An omnichannel strategy can help businesses intuitively guide leads to purchase using content and support across every channel.
Therefore, instead of a separate experience on each channel a shopper uses, an omnichannel operation creates a cohesive experience across the entire customer journey.
Related Article: Connected Customers, Connected Data, Connected Journeys
Single Channel vs. Multi-Channel vs. Omnichannel
Traditional single-channel sales involve a single vending location, such as a store or online marketplace. It's an old-fashioned way of doing business, and operators using this model are likely missing out on sales opportunities.
Multichannel commerce happens across digital and physical locations, but they're not integrated. You might make decent returns with this approach, but you're missing vital growth opportunities. Lead conversion, customer loyalty and upselling are all improved by an omnichannel strategy.
When it comes to multichannel vs. omnichannel in marketing, the biggest difference is what's at the center of your strategy.
- Your brand defines and informs your marketing strategy
- Each channel operates separately
- Marketing channels aren't personalized for consumers
- Communication is primarily static and uniform across channels
- Channels aren't automated to update based on user preferences
- The customer is the central focus of your marketing strategy
- Messaging changes according to how a consumer interacts with your brand
- Channels can work together and share information
- Each platform automatically updates based on consumer behavior
- Each channel is highly personalized for each potential customer
What Are the Benefits of Omnichannel for Marketing?
Adopting an omnichannel marketing approach has several benefits. And while companies might not yet deploy it across the board, there's a good chance that those who don't will get left behind.
According to a 2021 study on gamified, personalized and engaging experiences, “customization helps consumers fulfill their need for autonomy.” You can empower customers by offering personalized experiences, prompting an emotional connection between them and your business.
Customized omnichannel marketing tailors the buying journey, making it intuitive and smooth for each shopper. The result is improved brand perception, increased engagement, higher spends and more repeat customers.
Better Brand Recognition
Cross-channel consistency — having the same logo, fonts, color scheme, tone and messaging across all channels — strengthens your brand by improving recall. And having a memorable brand is vital.
Research from RebootOnline revealed that a consistent signature color alone — like McDonald’s iconic red and golden yellow — can increase consumer recognition of a brand by 80%. And according to Lucidpress , brands that present a consistent image across channels see an increase in revenue of 33% on average. (Download req.)
Improved Attribution Data
One of the biggest bonuses of omnichannel marketing is the boost it gives your data analytics. It allows you to track engagement across channels to gain an accurate picture of the customer buying journey.
You learn where customers prefer to engage and see which marketing campaigns add the most value. This data can further refine future strategies and set sales forecasts.
Greater Customer Retention
By placing the consumer at the heart of your marketing strategies and empowering them, you improve the chances of them coming back.
An omnichannel approach makes it easier to connect with your brand and streamlines the customer journey. Because you can deliver a smooth and consistent experience, no matter the channel, you negate the primary cause of customer churn: poor customer satisfaction. ( Scientific Reports )
Boosted Bottom Line
Overall, all omnichannel marketing’s benefits lead to increased sales and revenue.
Your brand becomes easier to access, thus making it easier to purchase. Because of personalization, the average spend per head often increases. And, with customers walking away satisfied, they’re more likely to return and make future purchases — and spread the good word online and to friends and family.
What Are the Benefits of Omnichannel for Retail?
Many advantages of omnichannel retail and omnichannel marketing overlap. However, understanding the specific benefits of each can help leaders decide which strategies will work best for their organizations.
Meeting consumers where they're at to make a sale makes the customer buying journey easier than ever. And guess what? The easier the journey is, the more money you'll make.
Entering details into endless forms and taking the time to seek your brand out are major pain points. By making shopping simpler, customers are more likely to purchase and walk away happy.
More and more businesses crop up every day. Between 2019 and 2021, according to Nasdaq , nearly 170,000 new professional and technical service firms came into existence. This might be the sign of a healthy economy, but it also means business leaders must work harder to attract customers.
Moving to an omnichannel experience is one of the best ways to differentiate your company. It won't just enhance CX for potential customers, it also improves returning customers' experiences.
Improved Customer Service
Omnichannel support is one of the defining features of modern customer service. When people need help with a product, being able to reach a customer rep and resolve issues as quickly as possible is paramount.
According to research from Hubspot , 90% of customers will purchase more from brands with excellent customer service, and 93% are more likely to be repeat customers. The more interconnected your company’s channels, the easier a consumer can get help using their preferred method.
In one study of 46,000 consumers, Harvard Business Review found that omnichannel shoppers, compared to single-channel customers, spend 4% more in-store and 10% more online on every shopping occasion.
And to make the case for omnichannel even more compelling, omnichannel shoppers spend extra with each additional channel that’s available. For example, said HBR researchers, “customers who used 4+ channels spent 9% more in the store, on average, when compared to those who used just one channel.”
Optimized Business Processes
Interconnected sales and marketing channels mean interconnected, streamlined data. With a tightly controlled data stream, you get more precise insights into which processes bear fruit and which are less effective. Your website, store, social media and IoT information are combined, giving you a clear picture of the decisions customers make throughout the buyer journey.
You’ll need to take a cross-departmental collaborative approach to optimize your business processes. Each wing of your company will have insights and explanations that can bolster the entire team's efforts.
Related Article: How to Make Your Customer Experience Better: Be Convenient
10 Steps for Creating and Implementing an Omnichannel Marketing Strategy
To implement omnichannel strategies, you need to go above and beyond the scope of multichannel. It's not just about offering multiple platforms for consumers to make purchases. Your entire business model requires updating to expand your reach, generate growth and maximize ROI.
For the most part, tech takes the brunt of the work in connecting various platforms. Your job is to prepare teams and business processes to enable omnichannel’s benefits.
Below are 10 crucial steps to take when moving from single or multichannel to omnichannel.
1. Get All Teams on Board
The shift to omnichannel is beyond the scope of your marketing department alone. Organizations should coach every team member on harnessing data and making CX more personalized.
The result? A marketing team that can craft on-trend offers and capture your target audience's attention. Sales teams that understand the best way to close deals with each type of buyer. And, crucially, customer support teams that know how to make each person feel like the most valued and respected customer you have.
2. optimize for mobile.
Smartphones are the preferred method of researching and buying for many shoppers. What's more, younger generations, like Gen Z, rely heavily on social media for shopping inspiration.
As these generations gain an increasing amount of purchase power, the move to omnichannel is a matter of urgency. Mobile users expect seamless UX and UI, which is vital for making the most of omnichannel.
3. Segment Customers
Segmentation can help companies deliver on the personalization that consumers crave. Businesses often approach segmentation by developing buyer personas.
These personas might look at and segment customers by traits like:
- Hobbies and interests
- Values and beliefs
- Preferred method of interaction with businesses
Once you've detailed buyer personas that cover your target audience, you can explore ways to personalize journeys for each.
4. Choose Your Channels
With the knowledge of who uses your products or service, expand your reach to the channels they use most — something you can determine using quantitative and qualitative data gathered from analytics and customer feedback.
Be sure to focus on the most profitable channels for your company and those that send the most new customers your way. Invest in streamlining and refining the shopping experience for each buyer persona.
5. Map the Customer Journey
To meet the buyer where they are, you need to understand how they behave. You can do this by mapping out customer journeys .
Keep in mind that shopping is rarely a linear experience. People often conduct research first, and those who research or shop on their smartphones can easily get distracted. The real magic of omnichannel is its ability to recapture the attention of a warm or cold lead.
Be as detailed as possible with your customer journeys so that you can refine every element and resolve any pain points along the way. The better you understand the customer journey, the more control you have over it.
6. Offer Cross-Channel Support
Due to the proliferation of startups since the internet's beginnings — accelerated by digital transformation — there are more companies than ever vying for people’s attention. And consumers are willing to jump to another brand if they can’t reach or get help from the one they’re currently using.
Cross-channel support maximizes the number of ways shoppers can contact your business. It means they can call, email, DM or @ you on social media from wherever they are and get as near-to-immediate answers as possible.
7. Use Automation Where Appropriate
If shifting to omnichannel seems like a lot of work, it is. But the results are well worth it. To free up time for employees and focus on the move, make as many processes automated as possible.
Consider the following tech to support your efforts:
- Inventory management software
- Social media management tools
- Market segmentation software
- Digital experience platforms
- Email marketing solutions
- POS card readers
- Automated telephone ordering
While automation is essential, don’t forget to personalize whenever possible to retain a sense of genuine connection with customers.
8. Harness the Power of Data
The data omnichannel sales and marketing delivers is quite literally a gold mine. You can see how a consumer behaves and interacts in one medium — social media, say — and connect it to all interactions, allowing for deeper insights.
The omnichannel software you use will likely have built-in data analytics. In combination with surveys, this information can inform future marketing campaigns and help you refine CX at every stage.
9. Personalize, Target and Retarget
The majority of people don't shop linearly. They might explore their options from a smartphone one day, mull over a decision for a week and then make a purchase in-store.
Staying in touch with customers across devices and platforms — especially in a personalized, relevant manner — keeps you fresh in their minds and increases the chance they’ll make a purchase.
10. Make Continual Improvements
There's no denying that omnichannel is highly effective. However, you should never stop analyzing available data and using it to refine processes and personalization.
Test everything and test often. Be sure to experiment with different forms of content, formats, headings and subject lines to see what works best. Keep testing market segments and finding ways to add more detail to buyer journeys.
Today's landscape changes faster and faster, and you need to keep your finger on the pulse of customer demands to remain competitive.
Related Article: The Key to CX Success? Planning the Entire Customer Journey
Common Omnichannel Marketing Issues to Avoid
Some businesses that have adopted omnichannel approaches aren't making the most of them. Some common pitfalls to avoid:
- Irrelevant content: Don't play guessing games when it comes to content creation. Use buyer personas, journey mapping and analytics to understand how and why your audience shops so that you can create relevant content.
- Under-using data: Ensure you have a 360°, cross-channel view of data to make the most of insights and improve future successes.
- Measuring success in isolation: The line between online and offline is blurred, so measuring isolated touchpoints is ineffective. Think of all interconnected touchpoints as an ecosystem and measure success in tandem.
- Lack of cohesive strategy: Without a meticulously planned strategy that’s communicated to teams, you won't harness the power of omnichannel.
- Broad KPIs: Never settle for measuring the results of an entire campaign. Measure KPIs at every stage of the buyer journey to identify pain points, bottlenecks and successes. This informs how you can improve on future campaigns and strategies.
Omnichannel Marketing in Action
Let's wrap up by looking at some businesses seeing massive success from omnichannel.
Amazon is a pioneer of the omnichannel approach. Its website and app seamlessly sync carts, and the company has opened brick-and-mortar stores in an understanding of the shifting landscape.
What's more, Amazon support is highly tailored to the individual, with the option for customers to choose the method of contact that suits them best.
The company’s obsession with putting the customer first and continually innovating is the key to its success.
Staples operates in an industry that Amazon disrupted in a big way. To remain competitive, it increased the number of SKUs on its website and pivoted its strategy to focus on B2B sales.
By offering B2B customers the same perks as regular consumers — with Staples Advantage — it established a point of differentiation using omnichannel. It treats each organization that shops with it as an individual customer and personalizes content accordingly.
Business customers can quickly make repeat purchases, view recent items or fast-track buying. And this is true whether they shop in-store, on the web or through mobile.
Last but not least is Starbucks. The coffee chain uses omnichannel marketing to encourage its customers to continue interacting with the brand after they leave the store (or drive-thru).
Customers that sign up for the Starbucks app automatically earn a free app. They also gain access to a store locator, gift card information and reloading, and a rewards program that offers promotions and birthday coupons.
The app keeps the brand top-of-mind for customers, and the data gathered allows the company to offer more personalized incentives across all channels, including email and in-store visits.
About the Author
Imogen Sharma is a freelance writer who specializes in business, science and culture. She's passionate about staying ahead of the curve in the fast-paced world of tech and digital marketing.
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Competing in the Age of Omnichannel Retailing
As technology blurs the distinctions between physical and online retailing, retailers and their supply-chain partners will need to rethink their competitive strategies.
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Brandon McDonald, of Nashville, Tennessee, visited a local Best Buy to purchase a digital single-lens reflex camera. After browsing through the available products, he decided that he liked the Nikon D5100. To verify the price, he scanned the barcode with the RedLaser app on his smartphone. McDonald found that Amazon.com’s price was lower than Best Buy’s, so he purchased the camera from Amazon using his phone as he stood in the store. Although he and his wife had intended to return home with a camera that day, to save money they were willing to wait two days for the item to be sent.
Tasmia Kashem, a resident of Burbank, California, went to the Beverly Center mall in Los Angeles to shop for shoes. After browsing at Nine West, a fashion retail chain store, Kashem didn’t see anything she liked. As she was leaving the store, an associate offered to show her additional collections on an iPad. Upon scanning through the online offerings and reading reviews, Kashem decided to preorder a new style that was arriving at the store the following week.
Examples such as these illustrate how recent technology advances in mobile computing and augmented reality are blurring the boundaries between traditional and Internet retailing, enabling retailers to interact with consumers through multiple touch points and expose them to a rich blend of offline sensory information and online content. (See “About the Research.”) In the United States today, more than 50% of cell phone owners have smartphones, and more than 70% of these have used their devices for comparison shopping, 1 a habit that is becoming increasingly common worldwide.
In the past, brick-and-mortar retail stores were unique in allowing consumers to touch and feel merchandise and provide instant gratification; Internet retailers, meanwhile, tried to woo shoppers with wide product selection, low prices and content such as product reviews and ratings. As the retailing industry evolves toward a seamless “omnichannel retailing” experience, the distinctions between physical and online will vanish, turning the world into a showroom without walls. The retail industry is shifting toward a concierge model geared toward helping consumers, rather than focusing only on transactions and deliveries. For example, physical retail spaces will be augmented by virtual content accessible from smartphones and other devices such as Google Glass, Google’s wearable computer.
About the Authors
Erik Brynjolfsson is the Schussel Family Professor at MIT Sloan School of Management and the director of the MIT Center for Digital Business. Yu Jeffrey Hu is an associate professor at Georgia Institute of Technology’s Scheller College of Business in Atlanta, Georgia. Mohammad S. Rahman is an associate professor at University of Calgary’s Haskayne School of Business in Calgary, Alberta.
1. comScore, “ comScore Reports February 2013 U.S. Smartphone Subscriber Market Share, ” April 4, 2013, and Nielsen, “For U.S. Consumers, Different Stores Mean Different Smartphone Shopping Behavior,” May 4, 2012.
2. K. Zickuhr, “ Three-Quarters of Smartphone Owners Use Location-Based Services ,” May 11, 2012.
3. A. Ignatius, “How eBay Developed a Culture of Experimentation,” Harvard Business Review 89, no. 3 (March 2011): 92-97.
4. E. Brynjolfsson, Y.J. Hu and M.S. Rahman, “Battle of the Retail Channels: How Product Selection and Geography Drive Cross-Channel Competition,” Management Science 55, no.11 (November 2009): 1755-1765.
5. M. Luca, “Reviews, Reputation, and Revenue: The Case of Yelp.com,” working paper 12-016, Harvard Business School, Cambridge, Massachusetts, September 2011, papers.ssrn.com.
6. J. Zinman and E. Zitzewitz, “Snowed: Deceptive Advertising by Ski Resorts,” working paper, Cambridge, Massachusetts, June 2009, papers.ssrn.com.
7. Brynjolfsson, Hu and Rahman, “Battle of the Retail Channels”; and B. Nault and M.S. Rahman, “Reach Versus Competition in Channels with Internet and Traditional Retailers,” working paper, University of Calgary, Calgary, Alberta, July 2012.
8. E. Brynjolfsson, Y.J. Hu and M.D. Smith, “From Niches to Riches: The Anatomy of the Long Tail,” MIT Sloan Management Review 47, no. 4 (summer 2006): 67-71.
9. D. Streitfeld, “Amazon Signs Up Authors, Writing Publishers Out of Deal,” New York Times, Oct. 17, 2011, p. A1.
i. More details are available in Brynjolfsson, Hu and Rahman, “ Battle of the Retail Channels .”
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What Is Omnichannel Commerce? Definition, Benefits, and Trends
By Tessa Roberts
Oct 18, 2022
Table of Contents
"Omnichannel." You’ve probably heard and read this buzzword many times — in your sales meetings, on your favorite marketing blog. Occasionally, you might even drop the word yourself.
But when the word is everywhere, it can get confusing what people actually mean by it. In this blog post, we'll answer the question "what is omnichannel?" once and for all , and also explain the difference between omnichannel, multichannel, and single-channel commerce.
Find out what an omnichannel customer experience means for your business today — and in the future.
What Is Omnichannel Commerce?
Simply put, omnichannel retail (or omnichannel commerce) is a multichannel approach to sales that's focused on providing seamless customer experiences, whether the customer is shopping online from a mobile device, on a laptop, or in a brick-and-mortar store.
According to Harvard Business Review, 73% of all customers use multiple channels during their purchase journey.
The State of Commerce Experience 2021 shows that almost half (44%) of B2C buyers and 58% of B2B buyers say they always or often research a product online before going to a physical store. Even when in-store, they will still go online to continue their research.
These e-commerce trends show that only when customers have gathered as much information as possible from a variety of sources to support their purchase decision will they decide to buy from a retailer.
So, a good omnichannel strategy is to focus on the entire customer experience — not the customer’s individual experiences on different channels.
What Is The Difference Between Omnichannel and Multichannel?
Let's break the terms down individually:
- Single-channel commerce means you're selling your product via one sales channel only. This could be your brick-and-mortar store, your webshop, or an online marketplace like eBay. This alone can work perfectly well. But if you want to give your customers a richer experience with your brand, it's wise to look into additional channels where you can sell your product.
- Multichannel commerce means you're selling your product to your customers on different channels, both online and offline. You interact with your customer via social media, by phone, and in your physical store. Your online presence is on point and your customers know where to find you. Multichannel is already a great strategy to get people engaging with your brand.
- Omnichannel commerce also takes place on multiple channels, like the multichannel commerce strategy, which is where it can feel confusing. Just keep in mind that without multichannel, there's no omnichannel. The big difference is that omnichannel commerce connects all channels. This means your customer has a seamless experience across every platform.
Now, let's see what omnichannel commerce can do for your business.
Benefits of Omnichannel Commerce
Omnichannel Commerce Benefit #1: Better Customer Experience
What do your customers expect? Number one on the list is a unified experience.
According to UC Today, 9 out of 10 consumers want an omnichannel retail experience with seamless service between communication methods. As the number of touchpoints increases, so does the need for a seamless integration from one touchpoint to another, whether it's a social ad, an email newsletter, a mobile push notification, a conversion with your chatbot, or a face-to-face chat with your store staff.
By breaking down the walls between the channels in a business, the consumer is empowered to interact with a company in a way that feels natural to them.
Omnichannel Commerce Benefit #2: Increase in Sales and Traffic
While making your sales strategy omnichannel-ready isn’t that simple, it’ll definitely be worth your time and money.
A study of 46,000 shoppers showed that omnichannel customers spend more money than single-channel customers.
And with every additional channel they used, the omnichannel shoppers spent more money in the store.
Customers who used four or more channels spent an average 9% more in the store compared to those who used just a single channel.
Omnichannel Commerce Benefit #3: Boosted Customer Loyalty
Not only do omnichannel customers spend more, they're also more loyal to your brand. The same study shows that within six months after an omnichannel shopping experience, these customers had logged 23% more repeat shopping trips to the retailer’s stores.
They were also more likely to recommend the brand to family and friends than those who used a single channel.
With an engaging brand story, you can stop pushing discount coupons, mid-sale campaigns, and other traditional marketing tricks. Focus on customer loyalty and your brand will be safe.
This means that an omnichannel strategy will not only increase sales, but it will also improve your customer loyalty. Sounds good, right?
Omnichannel Commerce Benefit #4: Better Data Collection
Retailers who are able to track their customers over different channels can better serve their consumers with a more personalized experience.
The omnichannel approach allows businesses to gain insights on how to create content and offers that will encourage their customers to shop more — not only online, but also at the physical stores.
Personalization in Omnichannel Commerce
Your customers expect a personalized experience at every channel and touchpoint.
Today’s consumers don’t just want quality products — they want them fast and to be able to get information about them quickly. They want to go to your website and be able to search products easily, compare prices, and see personal recommendations.
Among this overload of information, personalized content is crucial in attracting consumers’ interest. While all other information hits them in the face and still gets ignored, personalized content talks directly to them.
It’s become even more critical to offer personalized omnichannel experiences to your shoppers since 74% of online consumers get frustrated with websites when content appears that has nothing to do with their interests, and frustrated shoppers don’t buy.
This means that personalization is no longer a nice-to-have, but a must for today’s businesses.
And this is where properly managing your data becomes key. You'll want to power your technology with a customer data engine that can take all your data, then visualize and activate it for omnichannel orchestration and personalization.
In this way, you can learn what your customers desire and personalize content for them at scale. As a result, your customers find what they need much faster, are more satisfied with their shopping experience, and businesses see a higher conversion rate.
How Do You Create an Awesome Omnichannel Strategy?
Changing your single-channel strategy from web-only or store-only to a multichannel or even omnichannel experience takes a lot of time, effort, and resources.
But it will be worth it.
Here are 5 high-level steps to start off an omnichannel strategy that works for your brand:
Get to know your customer: Don't make assumptions. Research your target audience's interests, behavior, and needs. Ask them questions, invite customer feedback, and leverage social media and social listening tools.
Select the right channels: Find out where your customers are and what they're doing.
Choose a clear purpose per channel: One channel mainly for interaction, the other for news updates and so on.
Connect all channels: This is the hard part and only works if you execute it perfectly (omnichannel only). You'll need the right technology to follow your customer across all touchpoints: from reading reviews on your website, seeing social ads, or window shopping at an online marketplace to finally purchasing at your physical store.
Maintain your channels: There's no time for leaning back — keep on testing and improving your strategy. Document these touchpoints well to serve your customers best. This way, you'll create a loyal customer who keeps coming back for more.
What's Next in Omnichannel Commerce?
Web-only brands are now investing in physical stores.
Take Amazon , which opened their first brick-and-mortar store in Seattle in 2015 and is expanding rapidly ever since with over 460 stores in the US, Canada, and the UK. It's clear that the Amazon HQ understands that the future of shopping is connected.
And of course, mobile apps are getting more and more important too. Customers don't go anywhere without their mobile phone.
Powerful app features enrich the omnichannel shopping experience by connecting online and offline touchpoints. For example, having a mobile barcode scanner for looking up product details and ordering out-of-stock products online while being in-store.
Lastly, the importance of customer service as part of the omnichannel experience continues to rise.
IBM shows that AI-powered, automated customer service is the future. This doesn’t mean that human service agents aren’t needed anymore.
According to IBM, artificial intelligence (AI) and automation will give human agents context to understand who they're talking to. Also, chatbots and social media will continue to play a big role in being in contact with your customers at any time.
In digital retail especially, tapping into a cohesive e-commerce ecosystem will be an important way of staying connected with customers. To do that, you'll need the power of a Commerce Experience Cloud that combines product discovery, customer data and marketing automation, and headless content management to achieve true personalization.
Customers now expect to reach their go-to brands whenever and wherever. Being reachable for your customers at the channels of their preference is crucial for a complete omnichannel experience — even after purchase.
Examples of Successful Omnichannel Experiences
Staples is a global retailer and a leading provider of business solutions with its digital operation ranking fifth in the Internet Retailer 500.
Staples boasts multiple websites across North America, including the consumer and SMB-facing Staples.com and B2B property StaplesBusinessAdvantage.com.
With Amazon and other retailers threatening industry dominance, Staples needed to act quickly. It set out to find a data-driven response to market changes that provided personalization and relevance at scale.
The company had the challenge to automate the work involved in surfacing the relevant products that Staples’ customers were searching for. Its legacy system didn’t take into account customer behavior on the Staples sites or the wider web.
Staples increased its number of stock-keeping units (SKUs) on its websites to two million — a 10-fold increase — and charted a course to become a B2B one-stop shop for businesses across the world.
In a three-way, head-to-head-to-head test across its various sites, Staples pitted Bloomreach Discovery against its legacy system and another competitor.
The Staples team compared revenue per visit (RPV) and conversion rate and the winner was clear and obvious: Bloomreach Discovery.
Yves Rocher is a worldwide cosmetics and beauty brand, and aims to offer high-quality, custom solutions for every skin type while being mindful of sustainability.
To that end, Yves Rocher wanted to provide better personalized product recommendations to both returning customer and first-time visitors in order to give each customer a truly custom experience.
To realize its mission of personalization, Yves Rocher turned to Bloomreach Engagement for its real-time and personalized product recommendations. While a lack of customer data history often means companies can't do much for first-time visitors, Bloomreach Engagement's algorithms were able to create personalized recommendations for first-time visitors as soon as they interacted with a product on the site (and within a fraction of a second!).
Thanks to this real-time personalization, Yves Rocher saw an 11x better conversion rate than a more generic "top-selling products" recommendation.
Are You Ready to Provide a Better Omnichannel Customer Experience?
Keeping up with the ever changing world of commerce isn’t easy.
Today, more and more brands are exploring the benefits of omnichannel — making your own shift from single-channel or multichannel to an omnichannel strategy will ultimately be worth your time and effort.
A quick recap of the differences between single-channel, multichannel, and omnichannel commerce:
Single-channel commerce sells through one sales channel, for example as a store-only or web-only business
Multichannel commerce operates on multiple channels, both online and offline
Omnichannel commerce connects the dots between all channels, offering customers a seamless experience across all platforms
Is your business ready to be introduced to omnichannel commerce? Bring effective omnichannel marketing automation and personalization to your company with Bloomreach — schedule a personalized demo today to learn more .
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Content & Communications Manager
Tessa is a content marketer specializing in digital marketing, content strategy, social media strategy.
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