The Opportunities And Challenges Of Omnichannel For Retailers
As CTO of Engage People Inc. Len Covello helps companies differentiate loyalty programs to deliver a better experience for their customers.
Published July 20, 2023, 10:00 a.m. EST
In today’s digital age, the lines between online and offline channels have become increasingly blurred. When it comes to shopping and many other facets of daily life, consumers have grown to expect a seamless and consistent experience across all channels, including physical locations, online marketplaces, social media platforms, loyalty programs and mobile apps.
Why Omnichannel Integration?
Omnichannel integration can be mutually beneficial for businesses and consumers. For businesses, it can help improve customer satisfaction, increase sales and streamline overall operations, as providing the same type of experience across channels helps create a strong brand identity that differentiates retailers from their competitors.
An omnichannel integration also provides retailers with valuable insights into customer behavior, including purchasing and communication preferences, allowing businesses to tailor marketing efforts and product offerings accordingly. By communicating offers, promotions and rewards based on specific preferences, retailers can strengthen their connection with customers.
This trend has given rise to the concept of omnichannel integration, which creates a unified and consistent experience for consumers across all touchpoints. This seamless experience provides businesses with new ways to increase customer engagement and brand loyalty—if implemented correctly.
For consumers, omnichannel integration is all about convenience and personalization. Shoppers who can interact with their favorite brands the same way in physical stores via mobile apps and loyalty programs have more opportunities to make purchases when and how they want. The omnichannel experience helps put them in the driver’s seat, which strengthens their trust and loyalty. This often leads to repeat business and positive word-of-mouth marketing.
Challenges Of Omnichannel Integration
Despite the many benefits of omnichannel integration, there are challenges that businesses must overcome to be successful. One of the biggest hurdles is integrating different systems and technologies across channels. The undertaking requires significant upfront investment in IT infrastructure and expertise, not to mention ongoing maintenance and regular updates.
Another challenge is managing inventory across channels, which requires real-time visibility into sales and stock data as well as the ability to quickly fulfill orders from different locations. Businesses also need to ensure that they have a consistent pricing strategy as customers expect the same prices regardless of where they are shopping.
Additionally, businesses need to have a consistent brand image and messaging, which requires coordination between different departments and a deep understanding of the target audience and their preferences.
Omnichannel Integrations That Work And Why
Despite the challenges, many retailers that have already embraced omnichannel integrations are reaping the benefits. One notable example is Starbucks. Customers can order and pay for their drink using the Starbucks app, which also offers personalized recommendations. They can then pick up their drink at a physical store where they have the opportunity to earn and redeem awards.
Starbucks expanded its omnichannel experience by partnering with DoorDash to meet customers where they are, especially given the increased demand for quick and convenient delivery options. Similarly, in China, the quick-service restaurant is creating an omnichannel experience through its partnership with e-commerce platform Meituan. Meituan’s app allows patrons to reserve space in the restaurant as well as customize their delivery orders, which can be kicked over to another store if a customer’s preferred option is sold out.
Nike has also found success with their omnichannel integration by creating an entire ecosystem comprised of online and offline channels that offer a seamless and integrated shopping and lifestyle experience. For companies looking to follow suit, a great way to drive loyalty is to allow customers to shop for products on a website or through an app that can then be picked up in a physical store.
Another great way to create a more effective customer experience is to allow in-store shoppers to find more information about the products they find via an app. Nike enables this through newer store formats like Nike Live, House of Innovation and Nike Rise. Customers can also use Nike’s Training Club and Run Club apps to track fitness goals and receive personalized recommendations for products and workouts. As of last summer, these efforts have resulted in more than 300 million Nike ecosystem members.
Success stories like these shine a light on the opportunities retailers have to create an engaging and seamless shopping experience that will keep their customers coming back time and time again.
When it comes to building loyalty technology solutions, do so with an omnichannel experience in mind. Loyalty programs should be fully reflective of the brand, and the experience should be the same regardless of whether members access their perks via their mobile devices, on a website or at the point of sale. Being able to easily access and pay with points in this variety of ways helps avoid cart abandonment and amplifies a retailer’s broader omnichannel strategies.
At a time when retailers from fast-fashion brands to grocery stores are experiencing more and more competition, those that successfully leverage omnichannel integrations can better create consistent, engaging and convenient customer experiences.