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Omnichannel Retail: How to Build Winning Stores in a Digital World

To gain a competitive advantage, today’s retailers must embrace comprehensive digital communications, with the mobile channel as the focal point of their digital strategy. 

This article explores many insights offered in a new book and business guide, Omnichannel Retail: How to Build Winning Stores in a Digital World, 2nd Edition.

Digital interactions are the core of eCommerce retailers’ business. But genuine customer connections provide retailers with valuable customer data to build a personalization strategy… and today’s consumers demand personalized interactions. 

Mobile is central to the communications strategy for successful eCommerce retailers, enabling them to collect data and communicate with customers in real time. It’s also the channel consumers increasingly use to research, shop, and purchase goods and services.

Embracing personalization, the digital imperative, a mobile strategy, and other strategic recommendations outlined in the Omnichannel Retail guide empowers retailers to seize a commanding edge in an ever more complex and competitive retail landscape.

As retailers face increased pressure and competition on multiple fronts, including soaring operational costs, evolving and unpredictable consumer expectations, and technological progress, a new book and business guide offers best practices and insights from retail experts to help navigate this dynamic environment. And as nearly every retailer has an eCommerce presence – making them, in essence, omnichannel retailers – these insights are applicable across the spectrum of retail operations.

Omnichannel Retail: How to Build Winning Stores in a Digital World, 2nd Edition, explores the value of digital customer connections and how to harness those online and in-store using the latest tools and proven strategies from omnichannel retail leaders.  

In this updated edition of Omnichannel Retail, my co-author Sarah Jarvis and I outline the importance of making digital connections with customers at all stages of their shopping journey to drive engagement, retention, and sales. We offer actionable recommendations around leveraging digital opportunities and mobile capabilities, delivering more meaningful marketing communications, creating personalized loyalty experiences, and maximizing customer data's potential. 

The Digital Imperative

Since the first edition of our book, there's been a significant change in how we use digital tools and platforms. People shop everywhere using their devices and screens of choice. A robust digital presence is imperative not only for pureplay eCommerce retailers but increasingly for retailers that have a physical store with online features.

Research by Forrester shows that now, 60% of purchases are influenced by digital interactions, up from 49% before the pandemic. The always-available digital connection – specifically, the smartphone – has forever changed how we access music, information, transportation, communication, and shopping.

Since people can shop from anywhere, anytime, retailers must consistently connect with their customers, providing a highly personalized, convenient, and unified shopping experience across any channel.

Many retailers have embraced the rise of eCommerce by creating building .com versions of their physical stores. However, the synergy between these physical and digital platforms must be more cohesive. Customers frequently need consistent pricing for the same item, depending on whether they shop in-store or online. Additionally, an article might be shown as available online at a specific location, only for shoppers to be disappointed upon arrival. This disconnect is more comprehensive than for retailers with physical storefronts. 

Pure-play eCommerce retailers face these challenges when their digital strategies, marketing initiatives, and operational processes aren't harmoniously integrated with their suppliers' and fulfillment systems.

However, the broader issue lies in the oversight of many retailers that have underestimated the complexities of the omnichannel landscape. Instead of delivering a cohesive omnichannel experience, they operate individual channels in isolation. This siloed approach is familiar to those with a physical presence; online, mobile, and social platforms can also function separately, leading to the same fragmented information issues in hybrid retail environments.

The ramifications of these isolated channels are evident in the inconsistency of marketing and communication efforts. Customers might receive repetitive, conflicting, or partial messages across different platforms. Retailers must recognize the pressing need to establish a cohesive digital connection with their customers, especially those with the highest lifetime value. Creating this unified customer experience should be retailers’ top priority.

Redefining Customer-Centricity in the Digital Era

There is no such thing as being too customer-focused. The most successful retailers and businesses deeply understand their customer’s habits and preferences; their goal is to nurture a more substantial relationship through personalization and connection, regardless of the customer's chosen platform.

Traditional mass marketing is diminishing efficiency and becoming pricier; one-to-one engagement is a new reality. Enhanced data capabilities and the rise of AI make it increasingly feasible to recognize each shopper as a unique individual with distinct preferences and priorities. 

However, many retailers still need to tap into this potential fully. While eCommerce companies are generally adept at this, many can refine and augment their approach by offering customers a fluid, tailored, consistent shopping journey across all platforms. Some brands and retailers are on their way to achieving this, but others must ramp up their efforts.

Their digital proficiency and data-centric approach characterize online-first retailers. Their bond with customers is increasingly intimate, especially as mobile integration becomes a fundamental aspect of daily life, from social interactions to online banking. Businesses that seamlessly integrate physical and digital touchpoints and can easily modify their offerings are leaders in this landscape.

The Future Store: Blending Digital with Physical

The distinction between traditional brick-and-mortar shopping and online purchasing has become increasingly indistinct. A significant majority of in-store shoppers, nearly two-thirds, routinely use their mobile devices to compare in-store prices with online alternatives. Consumers, however, aren’t just visiting physical stores or casually surfing online; they’re engaged in both activities concurrently.

Amidst many choices, retailers must offer compelling reasons for consumers to gravitate towards their brand. The key? Presenting a value proposition that feels uniquely tailored to each consumer for the consumer rather than a generic ‘me-too' offering that mimics competitors.

Adding the digital dimension within physical spaces allows retailers to match the personalization level that online-only retailers have mastered. This can pave the way for heightened spending and enhanced customer loyalty.

Of course, the traditional store remains relevant and an essential touchpoint for retailers offering online and physical shopping experiences. But even in a brick-and-mortar environment, it must evolve into a digitally enriched space. The goal is to maximize what customers can extract from their shopping experience, making every moment count.

As I've mentioned in my book, there's a consensus that we're still figuring out the perfect recipe for retail in the digital age. Despite the evolution of shopping, physical retail spaces largely remain unchanged. But there's potential. Retailers who can successfully meld the digital into their physical stores level the playing field with online giants. They're not just adapting; they're revolutionizing the retail landscape.

The Mobile Makeover

Mobile's role in omnichannel retail should be magnified. Whether retailers operate primarily online or offline, they can tap into consumers' mobile habits. Many opportunities exist, from accessing special deals to engaging with loyalty programs. And with the right incentives, customers can be nudged to favor the mobile route, invariably boosting a retailer's revenues.

Highlighting the power of mobile, Nike's CEO, John Donahoe, attributed a surge in profits (a spike of over 16%) in 2021 to direct digital engagement with customers. Similarly, Starbucks reported that 26% of its orders in the second quarter of 2021 were placed via its mobile app.

The inherent personal nature of mobile serves up a wealth of data. From location intelligence to shopping behaviors, customers offer a goldmine of insights. With their permission, more nuanced data can be garnered to enrich the shopping journey now and in the future. And the richer the data, the more precise and personalized the retailer's outreach can be.

For a retailer to truly thrive, each channel – eCommerce, physical stores, or omnichannel – should be strengthened with digital capabilities and driven by data. This ensures a retailer will remain competitive at every phase of the consumer's journey, whether it starts online and ends offline or vice versa.

While pure-play eCommerce retailers might not grapple with the challenges of physical stores, they can glean valuable insights from the examples in Omnichannel Retail. For those rooted in brick-and-mortar operations, the urgency to digitally enhance – or augment – their stores will only intensify in the future.

The Evolving Digital Landscape in Retail: Omnichannel Retail Insights to Improve eCommerce Business

While eCommerce retailers often lead the way in optimizing digital interactions compared to their traditional counterparts by adding eCommerce components to their brick-and-mortar experiences, the digital realm is full of hurdles. Integration challenges across online, mobile, and social platforms can lead to consistent and connected customer experiences.

In this digital age, consumers crave recognition. They want personalized outreach and offers tailored to them. While some digital shoppers may lean solely on mobile, others switch between mobile and online. Regardless of the medium, they expect retailers to know their preferred mode of engagement and tailor communications accordingly.

Committing to the “digital imperative” empowers eCommerce retailers to develop deeper, personalized customer interactions. As detailed in Omnichannel Retail, these connections and other omnichannel strategies lay the foundation for growing a loyal and profitable customer base that will enhance revenue and other vital performance indicators.

FAQ 

Why is personalization pivotal to eCommerce?
Today’s customers want to be treated as individuals, not “one of many.” Marketing strategies, promotions, and special offers should be meticulously crafted to resonate with each individual’s preferences.

What makes mobile communication central to personalization?
The inherently intimate and frequently accessed mobile device is an extension of the consumer. People know how it works and spend hours on it daily, interacting with friends, for work, for shopping, and everything else in between. Its pervasive presence makes it a key conduit for personalized engagement.

What's the significance of an omnichannel experience for shoppers?
Shoppers perceive brands holistically, not distinguishing between digital and physical channels. They expect unified interactions with retailers regardless of the channel they interact with. Falling short of these expectations can drive them to explore alternatives, i.e., your competitors.

Could you prioritize digital integration?
To deliver a cohesive customer journey, all processes must work together. Digital integration eliminates disjointed or contradictory communications, irrelevant offers, and frequent out-of-stocks.

Which eCommerce retailers will succeed?
Retailers destined to succeed in the eCommerce landscape will be those profoundly attuned to the nuances of individual customer behaviors. Success hinges on offering a rich and relevant personalized experience that’s truly integrated, no matter where the customer chooses to engage.

ABOUT THE AUTHORS 

Tim Mason, Chief Executive Officer

A retail industry veteran, Tim Mason’s career spans over 30 years and includes experience as the CMO and deputy CEO of Tesco, the largest multinational grocery and general merchandise retailer in the UK. Mason led the launch of Tesco Clubcard in 1995, creating the world’s first significant grocery loyalty program. A new and completely updated edition of his famous business book, Omnichannel Retail – How to Build Winning Stores in a Digital World, was released in September 2023. The original edition was shortlisted for the Business Book Awards in 2020. In addition to being an author and keynote speaker, Mason is the CEO of Eagle Eye, a leading SaaS technology company empowering personalized marketing and loyalty solutions used by retailers worldwide.

Sarah Jarvis, Director of Communications and Propositions

Sarah Jarvis is the Communications and Propositions Director of Eagle Eye. With over 15 years of experience as a Retail Marketing Leader in the loyalty industry, she has worked with some of the world’s largest retailers and FMCG brands to help them drive profitable growth by prioritizing the customer in their decision-making processes. Her expertise spans loyalty program design, CRM, personalization, data analytics, commercialization, and the technical implementation of initiatives bringing retailers and brands closer to their customers. Her know-how of what drives loyalty and effective personalization can be seen in the 2nd edition of Omnichannel Retail: How to Build Winning Stores in a Digital World, which she has co-authored with Tim Mason, CEO of Eagle Eye, and is due out in late 2023.

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