Omnichannel: the new norm for the retail sector

MANUEL ENRICO
21/05/2020
In brief
Thanks to a constant technological evolution and synergy between the physical and digital world, the shoppers’ perception of retail environment pushes operators to find innovative solutions that will steer their business towards a smart dimension that will offer customers new fulfilment options. This development is reflected in the need for retailers to identify models and processes that respond to new customers demands, offering solutions such as the omnichannel phygital approach.

Thanks to a constant technological evolution and synergy between the physical and digital world, the shoppers’ perception of retail environment pushes operators to find innovative solutions that will steer their business towards a smart dimension that will offer customers new fulfilment options. This development is reflected in the need for retailers to identify models and processes that respond to new customers demands, offering solutions such as the omnichannel phygital approach.

OMNICHANNEL STATS THAT A RETAILER SHOULD KNOW

The idea of store as a purely physical space is now obsolete, in favour of a modern conceptthat in other countries has been adopted by the retail industry, whereas in Italy this modernisation has encountered several obstacles, mainly due to a cultural lag that takes time to catch up with technological and organisational innovations.

The demand from shoppers attentive to new technological developments is a strong and clear signal. According to a Hootsuite study dated January 2020, 92% of internet users prefer the smartphone as a navigation tool, earning the distinction of being the only device to mark a growth trend regarding web traffic (+ 8.6% compared to 2018).

A trend that is also confirmed by the purchasing data. In year 2019, purchases via smartphone saw a 21% increase compared to 2018, while e-commerce recorded revenues of 31,6 billion Euros, marking a 15% rise compared to 2018. (https://blog.osservatori.net/it_it/mercato-ecommerce-statistiche-dati-itala).

Such data are a warning that the old concept of physical store is no longer applicable in the digital era. For years, some companies have focused on multichannel strategies in which the physical and online store coexisted, but this approach has a downside, in that there are no tools allowing an analysis of the shopper’s behaviour in the different channels.

From this drawback has arisen a more comprehensive approach that offers retailers an overall vision of their business: the omnichannel retail strategy.

OMNICHANNEL: THE NEXT STAGE OF EVOLUTION OF MULTICHANNEL

The omnichannel model is emerging as the ideal solution for bringing retail into a modern and more connected shopping dimension. If multichannel was conceived as a tool for interacting with customers through multiple channels, each managed in its own platform, omnichannel retailing enables to create a synergy between the different platforms to provide a cohesive and seamless experience.

Omnichannel is the answer to the shopper’s demand to have a unified cross-channel experience for all channels he accesses, from the physical to the online store. Responding promptly to this need translates into greater customer loyalty, as the integration of the different channels into a single journey brings two immediate benefits:

  • The customer derives increased satisfaction from the shopping experience
  • It raises the customer’s perception of brand value, seen as receptive in respect of his needs.

Ominichannel is attractive for a shopper as it allows to experience a dynamic customer journey, moving from the physical to the digital world, through a sharing of information and data via the interconnection of the different channels. The shopper can, for example, select a product through the online store from his smartphone and choose to pick it up in-store or have it delivered.

Technologies such as digital signage allow the retailer to create phygital journeys and develop interactive spaces with the shopper, creating a series of initiatives targeted at the individual rather than the mass audience. These potentialities cannot be reserved only to the visitors of the brick-and-mortar store, but must also be addressed to shoppers devoted to a virtual customer experience.

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For the retailer, this need translates into the introduction of new dynamic synergies, which must be implemented within an omnichannel retail strategy.

BECOMING OMNICHANNEL

The first step for building a profitable omnichannel framework requires a cultural evolution. There is a need for an awareness that the new smart technologies have been developed for integrating and blending the virtual environment with the physical world. The concept of store as a purely physical space is outdated, and so is seeing different retail channels as parallel, while they should be integrated into a single context.

The different sales channels cannot be distinct entities, but must be reconstructed as a single interface between shopper and retailer. This approach is not only a positive point in favour of customer loyalty, but it translates into a substantial improvement of efficiency for the retailer, in particular in terms of IT infrastructures and business processes.

Introducing an omnichannel dynamic requires starting an integration of the digital and offline channels, such as store, online, social, e-commerce, which leads to an increase in revenues. An omnichannel retail model gives retailers the ability to deliver multiple purchasing solutions capable of intercepting the needs of different types of shoppers. In this regard, technological assets are fundamental for the creation of an interconnected management of the various channels.

By integrating, for example, e-commerce into a physical traditional business, it is possible to overcome limitations such as opening hours or geographical limits. In the digital age, intercepting the needs of shoppers is essential, given the constant connection via smartphones, now the main device for accessing the virtual world. A continuous presence that also includes social media, popular digital showcases that play an important role in the interaction and engagement of shoppers.

From an omnichannel perspective, management is no longer divided between the different retail channels, but must create a common platform for all aspects of the retail world. This management unification requires an interdependence among the different components of retail, which inevitably involves the integration of IT and marketing systems characterised by the sharing of data and resources.

For this purpose, technologicalassets that take into account the consumer’s mobility within the different channels become necessary. Front-office and back-office software must constantly dialogue, creating a management platform where factors such as inventory and order processing are shared between traditional (physical) and innovative (e-commerce) channels.

To reach this objective it is necessary to rethink the retailer’s approach by following four essential principals:

  • Be Digital: the retailer must embrace digital culture as a whole, training its staff and management for the purpose of acquiring new skills to be used in its business
  • Be Smart: the shopper is closer to the digital world than the retailer, making necessary to reinvent the retail world by integrating the physical and digital spheres. Taking action online is essential, given the large number of customers on the web: updated websites with the inclusion of the physical store, as well as a targeted marketing and online engagement, are vital for an advanced retail system
  • Be Social: building your presence on social media is fundamental, but requires consistency and dynamism. Social managers and web editors are clear central figures, capable of generating interest and interaction with shoppers, by sharing content that can grasp their attention and concurrently share information
  • Be Analityc: it is necessary to rethink the analysis of data and their acquisition through systems that actively interact with shoppers, for systematic profiling and monitoring of their behaviour in the various retail channels, as well as reporting the results in order to deliver a shopping experience more engaging and satisfying for the customer and more productive and profitable for the retailer.

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