Marketing strategies are essential to the success of any company, but they are especially critical for retailers as they attempt to reach and retain customers. Traditional retailers, for the most part, are seeing declines in customer traffic, while online retailers are seeing their sales surge through digital channels. The omnichannel strategy aims to attract customers who shop both in brick-and-mortar stores and online, by making it easier to purchase products in all venues.
What is the omnichannel strategy?
The omnichannel strategy is an approach to sales where companies strive to provide a seamless shopping experience for customers, no matter where and how they buy. This means reaching customers whether they use traditional brick-and-mortar retail stores, or multiple digital channels to purchase goods online. Retailers who have both a physical store presence and an online presence have a greater competitive advantage over those outlets that solely conduct sales online. The omnichannel strategy aims to provide economic value to retail companies who can homogenize the shopping experience for customers in traditional stores and on the Internet.
How do businesses utilize it?
Businesses leverage the omnichannel strategy to make the buying process easier and more accessible to consumers. They are taking the best of both shopping environments—the convenience of online buying with the hands-on, personal service of traditional in-store shopping—and combining them to enable consumers to purchase how and when they want. Major companies, such as Bed Bath & Beyond and Home Depot, routinely send coupons to encourage both in-store and online shopping. However, it makes a difference whether the coupon can be used in-store only, online only, or in both venues. Flexible coupons have a greater chance of being used by consumers, and therefore have a greater chance to increase profits.
According to research conducted by Xeuming Luo of Temple University, in conjunction with a Chinese department store, in-store shoppers tend to make purchases in greater volumes. This is because they make more impulse purchases. Also, they are less likely to compare prices, which is something that online shoppers tend to do more often. It stands to reason then, that companies would benefit from encouraging their online shoppers to visit their brick-and-mortar stores, where they will presumably spend more. One way retailers can accomplish this is by issuing in-store only coupons. Another incentive —which is used by retail giant, Walmart —is to offer customers free shipping if they pickup their online orders at the local store.
Why are customer touch points important?
Touch points represent any space (physical or virtual) where customers and businesses interact to make transactions, exchange information, or provide services. Retailers that use the omnichannel strategy benefit from developing multiple touch points, because they give customers ample opportunities to engage with the company and potentially make purchases. The most desired omnichannel customers are tech-savvy consumers who conduct product research through their smartphones or tablets. These customers engage in a variety of ways. They compare prices digitally, download coupons, use smartphone shopping apps, and use in-store kiosks to check interactive catalogs. Companies that orchestrate customer experiences are creating multiple ways to attract and interact with consumers across these varied touch points. The ultimate goal is to engage customers as frequently as possible, thereby leading to increased sales and customer retention.
Companies Implementing Omnichannel Strategy to Gain Competitive Edge
Crate & Barrel is a home furnishings and furniture retailer that has been implementing the omnichannel strategy. It does so to enhance and expand the shopping experience in its brick-and-mortar stores by leveraging the digital channels that customers use most often. Crate & Barrel recognizes the trend of customers to research products extensively online. Through the Crate & Barrel app, customers have the ability to save products to their virtual shopping carts, and access that same information across multiple browsers and mobile devices.
Crate & Barrel strives to provide a seamless shopping experience with their coupon and incentive programs. These strategies emphasize ease of customer use, promote buying online, and encourage picking up online purchases inside the physical store. Another aspect of their omnichannel strategy involves coordinating wedding and gift registries to online portals. Customers can access and edit registries through the app, add items online and in the store by scanning barcodes, and monitor purchases in real time.
Disney is another company that has taken advantage of the omnichannel strategy. It allows seamless trip planning for consumers who are visiting the Disneyland theme park. Through their website—which is mobile enabled—customers can book trips through the “My Disney Experience” tool. Disney guests are able to plan activities at Disney locations, book hotel rooms, make dining reservations, and purchase a FastPass. Disney’s Magic Band Program is another omnichannel strategy. It is a wristband that customers receive at Disney Hotels. The wristband is a digital tool that enables users to easily store photos taken with Disney characters. The devise can also be used to order food, act as a FastPass inside the park, and function as a room key at the company’s hotels.
The omnichannel strategy is the way of the future, especially for retailers who deal directly with the public. While the Internet created a convenient shopping experience, customers want more options. In order to capitalize on the purchasing power of consumers, and on the various ways consumers engage in an increasingly interactive world, businesses need to make shopping through traditional and digital channels as seamless as possible.
Our online MBA program at New Jersey Institute of Technology is designed to prepare motivated, tech-savvy management professionals with the business expertise and technical knowledge vital for success in today’s rapidly evolving global business landscape.