Omnichannel Retail: Everything You Need to Know to Succeed
July 30, 2021
Imagine this scenario: A customer browses sunglasses on your online store but leaves without making a purchase.
Later, while they’re browsing through their Instagram feed, they notice an ad displaying a previously viewed product and a 20% discount off their first purchase.
They click on the ad, which leads to a purchase. Once the order is placed, it is picked, packed and shipped.
This is one of many examples of omnichannel retail in action.
A powerful omnichannel retail strategy allows your customers to move through multiple channels, engage with your brand, and eventually make a purchase.
In this article, you will learn how omnichannel works, why it’s important, and how you can create an omnichannel retail strategy to grow your ecommerce business.
What is omnichannel retail?
Omnichannel retail refers to creating a consistent customer experience across multiple channels, starting at brand awareness, all the way through fulfilling and delivering customer orders.
An omnichannel approach allows shoppers to enjoy a seamless and unified experience whether they’re shopping online, on their smartphone, browsing through social media, or visiting a brick-and-mortar location.
Omnichannel retail is different from multichannel retailing as it further streamlines the use of different sales channels to create a seamless, unique, and personalized customer journey.
Additionally, the fulfillment process is more consistent, no matter the point of sale.
The rise of omnichannel commerce
73% of consumers now use multiple channels in their purchase journey.
As new channels emerge, they offer new ways for consumers to interact with businesses. It’s no surprise that 83% of retailers already have an omnichannel strategy in place.
Combined with the right technology, omnichannel retail solves many of the challenges that retailers face when it comes to both brand awareness and supply chain optimization.
Not only does it support modern retailers in expanding their customer reach, increasing sales, and staying competitive, it provides an easier way to engage with customers, manage inventory, and fulfill orders faster across platforms.
Since omnichannel retail also allows businesses to unify customer accounts and purchase history across channels, it enables them to enhance the customer experience through personalized customer communications.
What are the omnichannel retail advantages for ecommerce?
A strong omnichannel retail strategy can enhance supply chain efficiency, which leads to faster business growth.
Here’s a look at the top advantages of an omnichannel retail strategy.
Be present on the platforms your customers love
85% of consumers use a combination of physical and digital channels to engage with a brand.
One of the most obvious advantages is that you get to meet your customers wherever they are. Omnichannel retail allows you to be available on the channels that your customers engage with the most.
Whether it’s the ease of browsing and purchasing products without ever leaving Instagram, or returning an online order through a physical store, consumers want seamless and unified experiences no matter where they are. Omnichannel ecommerce allows you to deliver on these expectations.
Reach new audiences
Being present on multiple channels allows you to expand your customer reach.
While some audiences prefer to shop online, others may only shop in-store. For instance, 28% of online shoppers between the age of 25 to 34 years old discover products by seeing ads on social media, while the majority of many others outside of this age group might not even be on social media at all.
An omnichannel strategy is ideal when you’re diversifying your product line and starting to cater to multiple demographics and consumers.
Offer unique customer experiences where your customers expect them
Omnichannel retail allows you to offer unique experiences on different platforms based on what your customers want or expect.
Examples of unique customer experiences include:
- Intelligent chatbots that can quickly answer customer questions on social media.
- Augmented reality to view how a product will look in real life (e.g., using your smartphone camera to virtually view how a couch would look and fit in a room, or trying eyeglasses on your face via a selfie).
- Purchasing several products to be delivered together, so the customer can test them and only purchase what they want to keep.
These unique experiences are crucial for delighting your customers. A study by Gartner found that customer experiences outperform brand and price combined when it comes to driving brand loyalty.
Warning: Omnichannel retail isn’t for everyone
While there are many advantages to omnichannel retail, it comes with its own set of challenges.
One of the biggest problems with selling through multiple channels is order fulfillment. Since orders are coming in from different channels, it can be difficult to keep up with a higher volume of orders and establish a consistent shipping process.
When selling across sales channels, a strong omnichannel fulfillment strategy is crucial. Of course, this requires the right infrastructure and technology. However, there are several omnichannel solutions on the market, including omnichannel fulfillment providers like ShipBob.
Top marketplaces for omnichannel ecommerce
Beyond their website and social media, direct-to-consumer (DTC) brands can strengthen their omnichannel retail strategy by selling on leading marketplaces.
Here is overview of the leading marketplaces and a quick comparison of pricing.
|One of the biggest online marketplaces with 300+ million active users and 150 million Prime subscribers||Professional plans start at $39.99/mo. + referral fee (8-15%)|
|The best marketplace to reach Facebook users, with 250 million people interacting with the Shops each month||No set listing fees|
|Another major marketplace with 100 million unique visitors every month||Free listings + referral fee (in %) based on product category|
|A leading global marketplace with 187 million active buyers worldwide||Insertion fee to create listings + final value fees (in $) once the item sells|
|Leading marketplace for sellers in the Asia Pacific region and Europe, with 60 million buyers worldwide||$1,500 (fixed) store fee + commission fee (5-8%)|
|Best marketplace for small-scale businesses, with access to 81.9 million buyers||Listing fee ($0.20 per item) + transaction fee (5%)|
How to create your own omnichannel retail strategy
Now, let’s take a look at some of the key steps to creating an omnichannel retail strategy.
Keep in mind that every omnichannel strategy is unique to every business. It all depends on the type of products you sell, your marketing and sales strategy, and the type of customers you want to reach.
Match customers to channels
Some customers might have different values and backgrounds that influence their buying behavior and shopping preferences.
To ensure your omnichannel retail strategy includes the right channels, you’ll need to map out your segmented customers according to the channels they engage with the most.
For example, DIY decorators may go to Pinterest for décor inspirations, while other customers that are into fashion may be more likely to browse their Instagram feed. If you sell essential items, many shoppers turn to marketplaces like Amazon that are sure to have what they need.
To choose the right channels for different customers, it’s always best to refer to historical order data, customer insights, and market research to optimize sales channels. You will also want to consider questions like:
- Which channels drives more customers?
- Which channels are the most profitable?
- Which channels lead to a higher average order value?
Another great strategy is to collect feedback from both one-time shoppers and loyal customers by conducting surveys or creating social media polls.
Map your customer’s journey
The next step is to map out your customer’s journey.
Consider the different phases that lead to a sale, including:
Establish a detailed outline on how your potential customers will stumble upon your brand and how they prefer to make a purchase.
For instance, if you sell beauty products, you could publish makeup tutorial videos on YouTube and add links to purchase products related to the video. If they click on a product link, it can either drive a sale right away or a trigger a retargeting ad if they don’t buy then.
Taking the time to map out an ideal customer journey helps you better understand customer behavior so you can optimize the brand experience and increase sales.
Customize your marketing based on the channel
As you expand into new channels, it’s important to customize your marketing (including messaging, interactive content, and imagery) based on the channel and how people interact with different platforms.
Even if you have one demographic that you’re marketing to, tailoring your content based on how people interact on different platforms is a surefire way to optimize your omnichannel strategy.
For instance, what appeals to the Gen Z audience on TikTok may not necessarily have the same impact on a Millennial audience that prefer Facebook or Instagram. Short and entertaining videos are more common on TikTok, while more educational, long-form content is viewed on YouTube.
Set up the right customer support channels
Omnichannel retail doesn’t just stop at selling on multiple channels; it also impacts your ecommerce customer service strategy.
91% of consumers want brands to offer multiple customer service channels, including a combination of email, phone, text, or chat. Oftentimes, it depends on the sales cycle of a purchase.
For instance, chat can make it easier to get questions answered while still browsing and comparing different products, whereas phone is used best for high-investment purchases where a sales rep is highly involved in the purchasing process.
Whether sending an email directly to your customer service team, posting questions on Instagram, or sending a DM via Facebook, make sure your customers can reach you based on their preferred point of contact (or can quickly understand what the proper channels to go to are).
Distribute inventory across platforms and warehouses
Being present on multiple channels isn’t enough if you can’t follow up with fast and efficient last-mile delivery. That’s why your retail fulfillment process is a key component of your omnichannel retail strategy.
To retain customers, the post-purchase experience is just as important, which involves the ability to quickly process orders, so items can be picked, packed, and shipped quickly from the nearest warehouse.
To streamline all your sales channels to funnel through one fulfillment network, many brands choose to partner with a tech-enabled 3PL that offers omnichannel fulfillment solutions.
Many online multichannel online brands choose to outsource fulfillment to a 3PL like ShipBob that operates multiple fulfillment center locations while centralizing inventory management across channels, rather than rely on one warehouse or fulfill orders in-house.
By outsourcing fulfillment to experts, you get access to multiple distribution centers, which enables 2-day shipping shipping at an affordable price, or even faster shipping for customers across the globe.
“We want the customer experience of purchasing on our website to be similar to Amazon Prime. This is possible with ShipBob, without inflating the shipping cost to an insane level.
To do this, we strategically place products around the country. We are storing inventory in three of ShipBob’s fulfillment centers, and these locations map out nicely with our customer base as we have a large group in the South and also get coverage on the West Coast and in the Midwest.”
Tim Fink, Co-Founder of EnduroSport
Implement an inventory management system
Unless all channels are synced with the same inventory management software, you run the risk that one or multiple sales channels will accidentally sell more products than you have in stock, which can result in backorders — and ultimately lower customer satisfaction.
Managing inventory is one of the most challenging parts of running an ecommerce business. Add omnichannel retail into the mix, and the challenge intensifies since you now have to manage inventory across multiple channels.
Setting up a proper inventory management system can help you track inventory in real time across multiple platforms from one dashboard.
“We utilize ShipBob’s Inventory API, which allows us to programmatically retrieve real-time data on how many units of each product are currently stored at ShipBob’s warehouses. We currently use this API to generate custom reports to tie this inventory data into our accounting platforms.”
Forecast future demand
As you expand into more sales channels and broaden your audience, the harder it it to optimize inventory levels and continuously meet demand.
When you have a clear idea of future sales volume, you can optimize inventory in every fulfillment location while keeping storage costs low, which frees up your cash flow for other business needs.
Make sure to have a system in place to record real-time inventory and order data, so you can make informed decisions on when to replenish inventory, and how to optimize inventory allocation across sales channels and distribution locations.
“Between shipping new collections for wholesale earlier in the year and Q4 madness for direct-to-consumer sales, we’ve been able to get through our heaviest seasons while staying ahead of production using ShipBob’s inventory forecasting tools — even as our order volume more than quadrupled in less than a year.”
Ryan Casas, COO of iloveplum
Set up omnichannel automations
Efficiency is key to creating a strong omnichannel retail strategy. This means you can’t afford to allocate labor hours on repetitive, time-consuming tasks.
With the right systems in place, you don’t need to manually process every order or conduct frequent inventory audits by hand.
Ecommerce automation, including omnichannel solutions, are becoming more accessible to brands of all sizes. By investing in automation, you and your team can focus on marketing and sales and product development, rather than spending too much time on logistics operations.
Here are a few ideas on how you can easily integrate omnichannel automation:
- Use chatbots to automate conversations and answer basic product questions.
- Set automatic reorder point notifications when stock is running low, so you know when it’s time to replenish.
- Implement an automated order processing system to automatically process orders as they come in across multiple channels.
- Partner with a 3PL to streamline fulfillment and automate shipping.
“My end goal when I started Drop FX was to create something that was fully automated, so I could focus on driving sales. I didn’t want to have to worry about inventory and distribution as much.
When I was gearing up to launch the business, I was looking for someone who would automate fulfillment for us. I chose ShipBob, and it turned out to be a very easy and scalable solution.”
Josh Hollings, Founder & CEO of Drop FX
Choose a tech-enabled 3PL
As your business grows, it becomes harder to be involved in the day-to-day operations. Additionally, investing in the right technology and logistics infrastructure to run a well-managed omnichannel retail strategy can be time-consuming and costly.
A tech-enabled 3PL like ShipBob makes it easy to grow your business and expand your customer reach.
As a leading fulfillment provider, you can easily connect your online store and other sales channels to our fulfillment technology. That way, orders from multiple channels can be automatically sent to the nearest fulfillment location to be picked, packed, and shipped.
From ShipBob’s merchant dashboard, you can view and track both inventory and order status across channels in real time. If you cater to a B2B audience, ShipBob also makes it easy to track both DTC and B2B ecommerce orders all in one place.
How ShipBob enables omnichannel commerce growth
From processing orders placed on multiple channels to and fulfilling orders from the closest fulfillment center, ShipBob gives you access to the logistics infrastructure, technology, and support you need to enable business growth.
ShipBob simplifies your omnichannel retail strategy by making it easy to integrate multiple channels with our proprietary technology. That way, you automatically send all orders to ShipBob and split inventory across multiple distribution locations.
To learn more about how ShipBob can streamline your multichannel distribution strategy, click the button below.
Omnichannel retail FAQs
Here are the top questions about omnichannel retail.
Why is omnichannel retail important?
Omnichannel retail lets you expand your reach to new audiences, resulting in more sales and an increase in brand awareness. Moreover, meeting your customers where they are and offering a unified, seamless experience across your customers’ preferred channels enhances their experience and builds brand loyalty.
What is an omnichannel retail strategy?
An omnichannel retail strategy involves providing an integrated and cohesive experience across multiple channels. This experience is delivered through all available touch points, from marketing and sales to customer service.
Can you outsource omnichannel retailing?
Yes, you can outsource your omnichannel retail fulfillment needs to a tech-enabled 3PL like ShipBob that offers pick, pack, and shippinng solutions to automate and streamline an omnichannel fulfillment process. ShipBob also partners with leading omnchannel solutions to enhance an omnichannel retail strategy with technology, deeper analytics, and more.
How can you handle inventory across an omnichannel?
An omnichannel inventory management system streamlines your inventory across multiple platforms. This gives you better visibility on real-time inventory levels and provides accurate data to forecast demand and prevent stockouts.