Traditional retailers must be bothered of noticeable shoppers’ visits to retail stores’ hefty traffic declines. Probably, some aren’t in the knowledge of it yet, but the competition—where traditional retailing is somehow being doomed—is raging over days, months, and years.
On the other hand, online retailing is booming. Besides, retail sales, in virtue of digital channels—inclusive of mobile sales—dilate by a good total of 23% in 2015. Mostly, online retailers are the benefitting end of it—Amazon as on the top of the list with a colossal market share of 26% of all online retail sales which is continually expanding into new product lines such as groceries and fashion. Thus, Amazon’s existence is a monster-like threat to all traditional retailers of this time.
Omnichannel strategy is a dynamic antidote for a complex environment
Omnichannel—by broad definition—is a marketing strategy of a brand/service that provides a seamless shopping experience in brick-and-mortar stores with an integration of various digital channels. Not to mention, more and more traditional retailers are indulging in omnichannel retailing which they think would be their edge among those who are online-only retailers.
Despite its ominous cost, traditional retailers are doing it anyway due to the radical perspective that it would be of something that would add up to their economic value in the future. But, would it really be? Would it be the solution to their raging dilemma?
Well, Harvard Business Review (HBR)—together with a major U.S. company which operates hundreds of retail stores across the country—conducted a study regarding the shopping behavior of more or less 46,000 customers who completed a purchase within 14 months, from June 2015 to August 2016. The study focused on a various aspect of a customer’s shopping journey with the retailer, the channels they have used and why, and their whole shopping experience.
As the result states, 7% of the study participants were online-only shoppers and 20% of them were store-only shoppers. The remaining 73% are basically referred to as omnichannel customers because as per them, they have used compound channels until they complete a purchase.
Omnichannel Customers are into retailer touchpoints
The study’s findings reveal that omnichannel customers are habitually using the retailer’s touchpoints—be it points of human, product, service, communication, spatial, and/or electronic interaction. They use all these sorts in combination on their entire shopping journey. Aside from using their smartphone apps to compare prices or to download coupons, omnichannel customers are also into the usage of in-store digital tools like interactive catalogs, price-checkers, or tablets.
The customers’ value depends on the number of channels they use
There is a freshly developed mantra in retailing through the study that basically states, “The more channels a customer uses, the more valuable he becomes.” The study reveals that omnichannel customers spend an average of 4% more on every shopping occasion in brick-and-mortar stores and 10% more online than that of single-channel customers do. Making it sound more interesting, with every channel they use—considering that the study counts each app, digital tool, and shopping venue provided by the retailer as a separate channel—the customers spent more money in the store. Take for example; on average, omnichannel customers who use 4+ varieties of channels spend 9% more in the store when matched to single-channel user customers.
By the same token, a prior online research on a retailer’s own site or sites of other retailers reveals a result of 13% omnichannel shoppers spends greater in-store. The finding has broken the norm and conventional wisdom that says, “Spur-of-the-moment, impulsive shopping bulks up the top line of traditional retailers.” Rather, the result suggests that customers go through deliberate searching throughout their shopping journey before they settle and complete a purchase; leading the customers to greater in-store purchases. Also, it has broken the traditional idea that using showrooms could lead to an online purchase when omnichannel shoppers are indulging in webrooming which has become a strong drive for Millennial shoppers.
Furthermore, the findings have proven that omnichannel shoppers are more loyal than single-channel-user customers. In a period of six months of omnichannel shopper’s shopping journey, they are most likely to repeat visiting the same brand which posted 23% of the total study participants and recommends it to their friends and family members.
Today, there are a lot of channels available which are just waiting to be utilized by brands that are willing to invest in it. Traditional retailers must understand that customer’s current buying behavior clings to the omnichannel strategy to curate a good story purchase. Thus, to walk faster through roads to goals, traditional retailers must know how to synchronize and utilize both physical and digital platforms to provide shoppers with a seamless, multi-channel experience where online-only retailers can’t simply lay a card.