What is Omnichannel Strategy and Why is It Important?

The omnichannel strategy is no longer a nice-to-have capability. It’s a key enabler for retailers to increase profits by selling wherever customers want to buy their products – on a website, in physical stores, or via social media. It combines all sales channels and customer data to provide a seamless and personalized customer experience.

No wonder the omnichannel strategy is being widely implemented by middle and large-sized companies globally, while 87% of leading retailers agree that it is crucial for business success.

We’ll discuss the business and technical components of the omnichannel strategy, the key challenges it solves, and how SoftServe helps clients take advantage of this strategy.

Why Omnichannel Strategy?

In terms of strategy, there are three ways to run a business.

• A single channel — selling products in physical stores.
• A multi-channel — using different places for product sales. Customers benefit from the ability to purchase any item through an online shop or a physical store.

Without consistency and the right connection between channels, multi-channel has some limitations. For example, the customer can’t choose the item online and pick it up in the store or use bonuses earned online in the physical store.

• Omnichannel — providing a seamless experience across channels. In this scenario, the customer becomes the center of attention, receiving improved service and buying more.

With this approach, all channels share the same data about catalog, prices, purchases, loyalty programs, wish lists, etc. Consumers already expect such an experience from retail brands. However, retailers need to ensure consistency across channels so that customers won’t feel uncomfortable or even tricked, wondering, for instance, why the item in a physical store costs more than in the online shop.

Key Challenges in Retail

COVID-19, known as the main challenge for retail, became both an issue and an opportunity for retailers. In 2020, e-commerce sales grew 32.4%, while offline sales didn't show such rapid growth.

This trend began long before COVID but was accelerated by the pandemic – customers’ habits have changed. In 2010, the retail apocalypse arose, so retail chains and malls in the US had to scale down their operations and some even went bankrupt.

With the growing reliability of mobile internet and online services, people preferred online shopping. This led to globalization: retailers who run a business online are now competing with the whole world. Statistics show that 57% of e-commerce purchases come from overseas companies.

The global e-commerce market is highly competitive which makes it harder to expand to new markets and segments. However, retailers who provide a seamless and consistent experience across channels have higher chances of attracting new and retaining existing customers.

How Omnichannel Addresses These Challenges

Customer centricity in omnichannel leads to more intensive engagement with sales channels, as evidenced by the Harvard Business Review Study. Along with automated customer pathways, digital customer self-service, and data-driven solutions, this approach allows retailers to overcome numerous challenges.

Consider this example. The retailer operates a physical store only. To avoid risks of closure, there is a strong need to introduce an online sales channel and integrate it with physical experience. And a chain of physical stores could give a competitive advantage over online-first retailers. These stores should be used in the customer journey as locations for in-store pickup or the last link in the delivery chain since most purchases still end up in physical stores.

With an omnichannel approach, the retailer that operated only a physical store reuses data. Costs and risks are reduced and it’s easier to deploy in new markets. The retailer knows more about clients and sends them relevant and attractive offers.

However, omnichannel requires further efforts – to create the best shopping experience, retailers must implement both business and technical components.

Omnichannel Components

The first layer consists of online, offline, and mixed (phygital – physical and digital) channels. To work in harmony, these channels need a solid backend represented by three other layers – marketing, personalization, and data analytics.

This approach could be described as the best customer experience across channels, enabled by marketing and customer personalization and powered by integrated data and analytics.

The business structure is simple and logical, though technical complexities such as stale or missing technical infrastructure, out-of-date business processes, and lack of experience with modern solutions cause companies to avoid omnichannel. To overcome these barriers, let’s look at omnichannel from a technical angle.

There are three layers. Digital touchpoints, defined as sales channels, are at the top – customers communicate with this layer. It includes points of sales, online stores with mobile apps, social media, customer support, emails, messengers, etc.

At the bottom, we can see the back-office layer consisting of systems that support business. All these systems and sales channels are connected via the integration layer. They share information through Data Warehouse and are united with the help of Integration/API Platform.

To be ahead of the curve, retailers should combine all business and technical components of this puzzle. And that’s where SoftServe can help. Our team has broad expertise and experience in working with different e-commerce platforms (Magento, Shopify, Salesforce Commerce Cloud, Hybris), ERPs (SAP ERP), CRMs (Salesforce CRM), CMS and DXPs (Sitecore, Episerver, Adobe Experience Manager), Marketing Automation (Marketo, Sitecore), and API platforms (Apigee, Mulesoft, Kong).

Omnichannel – SoftServe Approach

Today, an omnichannel strategy with personalized customer experiences, including both offline and online journeys, is required for all retailers. It solves numerous challenges, including channels expansion, optimization of new markets, and costs. But being on the cutting-edge for retailers means implementing omnichannel strategy wisely and promptly. Neglecting at least one strategy component of technical or business structure provokes problems with conversions and customer loyalty.

To ensure everything goes as smoothly as possible, retailers need a technical advisor that will deliver responsive omnichannel.

Let’s Talk about how SoftServe can help you build and implement a consistent omnichannel strategy to support the growth of your retail business and its loyal customer base.