Blending Digital & Physical Spaces: How Omnichannel Experiences Elevate Modern Retail

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Latitude

9 min readFeb 19, 2020

Omnichannel retail blends the best of what digital and physical retail have to offer.

If eCommerce could beat brick-and-mortar in a head to head fight, then Amazon would never have invested in their own physical retail locations. But they did. The thing is, omnichannel — the blending of digital and physical retail — provides the opportunity for modern retailers to offer the best of both worlds and deliver increased value to customers. In an era of declining sales for physical retailers and the rise of eCommerce giants, omnichannel provides the best option for retailers to not only survive but to thrive in the coming decades.

How can brick-and-mortar retailers make the most of the omnichannel approach to reach customers and deliver a superior retail experience?

Read on to learn more.

Exploring the Benefits of the Omnichannel Approach

In a recent study of over 46,000 shoppers, Harvard Business Review discovered that 73% of customers used multiple touchpoints (or “channels”) throughout their shopping experience. Harvard Business Review terms these shoppers “omnichannel customers” and the channels they use include everything from phones and online stores to in-store information centers and price-checkers. For retailers in the digital age, omnichannel shoppers represent the biggest opportunity for a bright future.

How Do Omnichannel Shoppers Shop?

They might start by researching a product, comparing reviews, or downloading coupons using their desktop, tablet, or phone before visiting a brick-and-mortar location. Once there, omnichannel shoppers make use of in-store assets, such as interactive catalogs, price-checkers, or tablets, to gather further information about the products they’re looking at. They want the details. And they want options for purchasing products.

Once they decide to buy, omnichannel customers might purchase an item online and pick it up the same day at the store, or they might purchase an item in-store and have it shipped to their house (rather than lug it through the mall all day). Again, omnichannel shoppers appreciate options. And, for retailers willing to provide a smooth omnichannel experience, these customers tend to reward them.

In the study mentioned earlier, Harvard Business Review discovered that omnichannel shoppers actually spent more money with each transaction compared to customers who shop either exclusively online or in-store. As opposed to “showrooming,” where customers conduct research in-store before making their purchase online at a separate retailer, omnichannel customers gravitate more towards “webrooming” by researching products online before making their final purchase in-store. On average, omnichannel shoppers who researched products online beforehand spent 13% more money once they made their in-store purchases.

Harvard Business Review also discovered that, on average, omnichannel shoppers spent 4% more on in-store shopping trips and 10% more during online experiences compared to single-channel customers. The study also found that omnichannel customers spent more money in-store with each additional channel they used. For customers who used over four channels in-store, the study reports that these customers spent an average of 9% more in comparison to shoppers who relied on only one channel to make a decision.

What Makes Omnichannel Shopping so Appealing for Customers?

Convenience and transparency drive 73% of shoppers toward the omnichannel approach. As it turns out, people don’t necessarily want to spend more time shopping. Omnichannel shopping gives customers the information they need to make informed and calculated shopping decisions without wasting too much of their most valuable commodity — their time.

In addition to saving time, customers also want to make sure they’re spending their money on products they can trust — products that deliver them the value they’re looking for. So, when companies make it easy for customers to access information at multiple points throughout their shopping journey, customers reward them for it. Making information accessible at every turn — both in-store and online — also helps retailers build trust with their customers. When customers feel good about their spending decisions and shopping experiences, they’re more likely to return later on. Omnichannel shoppers certainly prove this. These shoppers are 23% more likely to return to a retailer’s online store compared to single-channel customers.

The linear pathway to purchase ceased to exist with the rise of digital media and eCommerce. Customers now have the freedom to choose their own pathway to purchase and, as a result, everyone has their own way of reaching their final decision. Retailers who give customers options for finding the right information and customizing their experiences will be the ones that omnichannel shoppers reward.

So, what are retailers doing to find success in the omnichannel approach?

Setting the Standard for Omnichannel Strategy: Target, Home Depot, & Walmart

According to the 2019 Omnichannel Report by Digital Commerce 360, Target, Home Depot, and Walmart scored highest in an omnichannel rating conducted by two mystery shopper experiences. Each retailer found success in their omnichannel approach by offering customers easy ways to buy online and pick up items in-store or even at the curb of brick-and-mortar locations. These retailers also sank serious capital into revamping their online stores to make the eCommerce experiences easy to navigate and seamless for their customers.

In each case, Walmart, Target, and the Home Depot have made significant investments — not in building new stores necessarily but in retrofitting existing stores to better fit the omnichannel experience. These big-box retailers also invested in building new distribution centers to give their customers more options in terms of same-day and next-day delivery. By acting as a fulfillment center, each physical retail location now blends other elements of the omnichannel experience together rather than standing apart as its own isolated entity. The physical store ties the whole experience together.

Using Live-Stream to Replicate In-Store Interactions

The omnichannel approach towards retail focuses on using technology to amplify the existing strengths that brick-and-mortar retail offers by nature. As social beings, we’re wired for connection, which in-store retail associates cater to well. How can retailers integrate those personal in-store interactions into the digital experience? HERO, the conversational commerce app company, found a way to make it happen.

HERO allows physical retailers like Nike, Adidas, and Levi’s to connect retail associates with online shoppers using video-stream technology. Using their smartphones, customers can video chat with in-store employees from any location they choose. Unlike chatbots and call centers, video-stream technology allows for a genuine human connection that, previously, customers could only find through in-store interactions with retail associates. Thanks to HERO’s video-stream technology, the power of human connection — one of physical retail’s greatest assets — can now reach customers in nearly any part of the world that has an internet connection.

Starbucks

There’s a certain amount of joy you get from someone making you a coffee as you start your day. Through its omnichannel approach to retail, Starbucks makes that experience even more joyful. Using the Starbucks mobile app, customers can order and pay for a drink of their choice from anywhere with the click of a button. But it doesn’t stop there.

The app shows customers the locations of different stores and the estimated time they would have to wait in order to pick up their drink. With that information, customers can select a store that works best for them. If they don’t know how to get there, no problem — Starbucks provides directions.

As with any other loyalty program, Starbucks offers rewards to customers. But it makes the process of collecting rewards easy by storing that information on a loyalty program member’s rewards card each time they make a purchase. That information, in turn, syncs up to the customer’s rewards app in real-time. Using any device with internet access, customers can check their rewards, reload money on their card, check their balance, and even receive drink recommendations based on the weather, special seasons, and holidays. If there’s one thing coffee lovers know it’s that coffee is an experience — one that Starbucks makes that much more enjoyable through its omnichannel capability.

Testing the Capability of Omnichannel Retail at GH Lab

GH Lab, a pop-up boutique store in the Mall of America, lifts the most popular products off the pages of Good Housekeeping Magazine and allows customers to interact with them in ways that go beyond looking at a picture.

Curated to feel more like a living space than a showroom floor, the sections and rooms of GH Lab allow customers to visualize themselves using each product. To simplify the experience, GH Lab features one top-ranked item from each product-category rather than inundating customers with an overwhelming set of options. What does that mean? Well, you’ll only find one blender at GH Lab, but you can count on it being the best one out there.

Good Housekeeping adds value to the physical retail experience by testing, reviewing, selecting, and curating, the most practical and functional products before presenting them in an authentic space. After deciding to purchase an item at GH Lab, shoppers add the product to a digital rather than a physical cart by scanning the product’s “smile code” using their Amazon app. From there, Amazon ships the product directly to the customer’s home.

Liberating customers from dragging their heavy shopping bags around the Mall of America for the rest of the day likely encourages customers to purchase items they wouldn’t otherwise buy.

GH Lab represents a fusion of digital and physical retail that uses technology to meet customer needs and simplify the in-store experience.

The Takeaway

So, what can retailers do to create omnichannel experiences that give today’s customers what they want?

Take the following steps:

Understand where eCommerce and physical retail have the opportunity to come together to add value to customers’ lives or to simplify their shopping experience. Resist the temptation of adopting new technology just for the sake of new technology. New tech doesn’t necessarily lead to innovation. Using tech to simplify and amplify the user experience — that’s innovation.
Make small investments to test integrations between digital and physical retail. Pop-up shops, test stores, or even small focus groups work well.
Leverage one-on-one communication methods to build personal relationships with customers. These interactions work well when customers seek support and when there’s the opportunity to make new sales. Remember, we’re wired for connection as humans. One-on-one interactions can create those connections and build trust between businesses and customers.

Want to learn more? Feel free to reach out at any time. We would love to chat!

The above piece was written by the Latitude Supercharge Research Team, which includes Connor Beck and Carter Jensen

Supporting Resources —

Resources and original reporting of the above points covered by the following publications — Etail East, eTailPet, Harvard Business Review, Feedeo, Forbes, PSFK, and Latitude Supercharge

At Latitude, we love taking incredible brands of all sizes and elevating them through tech-fueled experiences that add true value. From pop-up retail to permanent build-outs, our team brings brand stories and modern-day commerce together to truly stand out. Want to learn more? See our case studies. Give us a shout.