Swimming the Omnichannel

Omnichannel retailing is a Logical Extension of Our Increasingly Interconnected Culture


By Steve Penhollow

An omnivore is any creature that eats everything, an omnibus is a book representing all the writings on a particular subject, and an insomniac is someone who is awake all of the hours that it is possible for a person to be awake.

Sorry, that last definition isn’t precisely true, but it sometimes
feels as if it is.

Omnichannel retailing is a relatively recent marketing term that gets confused with the one that came before it: multichannel retailing.

“In omnichannel, a retailer is working toward a 360-degree view of its customers’ purchases across all channels.”

Omnichannel retailing, according to Wikipedia, is “the evolution of multichannel retailing.” Wikipedia, according to most newspaper copy editors, is not to be trusted.

But I’ll make an exception just this once.

In retailing, the term “channels” refers to all the ways that a customer can buy products and/or engage services from a company. Channels in retailing are nearly as old as channels in waterways. As long as businesses have made products, customers have used channels (open markets, general stores, mail order, phone order, brick-and-mortar) to access those products.

Innovations in technology in the last 30 years have expanded and complicated the multichannel retailing picture considerably.

As stated in a blog post at the PricewaterhouseCoopers website, “New technologies, global access, enhanced mobility, social media — each of these has had a profound impact on how consumers gather information and make purchase decisions. This, in turn, has shifted how retailers target, attract, maintain and engage with their customers.”

“Retailers today are doing business across various new sales and service platforms, including websites, smartphones, social media, Internet couponing and third-party vendor relationships, among others,” according to a study done by Grant Thornton LLP. “Multichannel retailing presents ample, seemingly boundless opportunities for brand engagement and interaction with customers across new platforms.”

So, what then is omnichannel retailing? Omnichannel retailing is apparently such a fresh concept that no one can agree on whether “omni-channel” needs to be hyphenated or not.

For the record, it doesn’t.

Innovations in technology in the last 30 years have expanded and complicated the multichannel retailing picture considerably.

“To me, omnichannel is the logical evolution of multichannel retailing,” MB&G Consulting’s Bill Davis tells Bill Bishop of the website Brick Meets Click. Thanks to Davis’ use of the word “evolution,” I am now able to renounce my previous citation of Wikipedia.

In omnichannel retailing, the many independent channels of multichannel retailing are interconnected and interrelated in ways that neither the mom nor the pop of the archetypal mom-and-pop store could have imagined.

“In omnichannel retailing, a customer can use more than one sales channel to shop from a retailer for any given transaction,” Davis says. “They can buy online and pick up in-store for example, or use mobile in-store to research or make a purchase, or they can buy in-store and initiate a return online.”

“I think it’s a useful distinction,” Davis adds. “In omnichannel, a retailer is working toward a 360-degree view of its customers’ purchases across all channels. In multichannel, they’re just offering customers a selection of channels to choose between.”

“A shopper’s journey is no longer a linear one, meaning he or she goes to one sales channel and decides on a purchase.”

In her blog post on the Tweak Your Biz website, CG Online Marketing president Christina Giliberti lists three incarnations of omnichannel marketing: Brick2Click, Device2Web and eAve2Web.

According to Giliberti, Brick2Click means the “relationship between the physical store and e-commerce site is strong and connected. One leans on the other, and the strategy tends to pull on the strengths of both.”

She describes Device2Web as a “device-driven strategy with an emphasis on mobile touch points — phone, tablet, kiosk, etc.”

Lastly, eAve2Web is “retail serviced via a third party — Amazon, Groupon, eBay, Community, etc.,” Giliberti writes. “These can lead to purchases online or in-store.”

So why is omnichannel
retailing important?

Megan Castillo, the product marketing manager for retail software company Dydacomp, sums it up this way at the Dydacomp website: “A shopper’s journey is no longer a linear one, meaning he or she goes to one sales channel and decides on a purchase. Today we see shoppers incorporating some, and sometimes even all, of the retailer’s channels into their decision process. That’s why it’s so important to be consistent, whether in messaging, prices, etc. If not, you risk tarnishing that customer’s experience and potentially losing them as a repeat customer. That’s critical, because it costs 5 times more to get a new client than to keep an existing one, and existing clients are much more profitable than new ones.”

Castillo says one of the main benefits of omnichannel retailing is “stronger brand/identity recognition.” She writes, “This is key to your survival as a brand/retailer. Other benefits attributed to applying an omnichannel approach include revenue growth, expanding your customer base, [and] higher customer satisfaction, and it can be a competitive differentiator, at least until the rest of the retail world catches up.”

“Omnichannel is the logical evolution of multichannel retailing.”

As hot as omnichannel marketing is as a concept, not many retailers are fully implementing it, according to data gathered in both a 2014 study by Econsultancy and a 2013 report from Retail Systems Research.

The data was discussed in separate blog posts at the eMarketer website. Concludes eMarketer, “What has kept retailers from plunging into omnichannel more quickly? A lack of urgency is partially to blame. In-store sales still dominate overall retail sales, which may lull some into putting off omnichannel implementation efforts.”

“Compounding this,” eMarketer writes, “implementation requires a series of difficult steps, including inventory, data integration and revamped business operations. Without a sense of urgency and adequate customer intelligence to guide them, many retailers may hesitate in their commitment to make the changes necessary to offer an omnichannel experience.”

The future, as Doctor Who might tell you, can be scary.

But until the advent of transdimensional retailing (which is how Doctor Who buys his sonic screwdrivers), omnichannel retailing represents a vision of the near future that retailers better conquer their fears about before it passes them by.

Steve Penhollow
Writer/Editor
BMDG

Photo: Shutterstock

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