calendar November 2017 | updated icon May 2024 | read time 3 minute read | Topic Product Information Management

What is Omnichannel and How Can it Benefit Small Retailers?

What is Omnichannel and How Can it Benefit Small Retailers

Omnichannel retailing is a customer focused approach to sales and marketing that uses multiple retail channels by integrating offline and online platforms to offer a seamless and convenient shopping experience to consumers.

That's the key: seamless and convenient. 

Let me be clear, omnichannel doesn't mean you have to be on every platform. It means you have to make those channels work together without a hitch. You want your customers to not notice any type of disconnect between your different communication platforms. From online, to in-store, to social media, they expect everything to be integrated. 

An omnichannel strategy done well certainly benefits your customers, which in turn greatly benefits your business. This integration of different retail channels allows small retailers like you to reach and track consumers better. Maybe you don't have many channels, or a big budget, but you can still reap the benefits like:

Improved Sales

No one shops in one place anymore. The combination and overlap of physical and digital space makes that a given for the foreseeable future. So by providing consistent information and a continuous experience across your channels will give your customers the confidence they need to make a purchase. Not only that, successful omnichannel shoppers are more likely to give you repeat business; 23% more in fact!

Omnichannel retail setup can allow your customers to buy products depending on their preference. Maybe they want to check the item out in-store to get a feel for the physical product, only to buy it at their convenience online. This strategy easily provides a retailer’s stock more accessibility and visibility in the consumers’ favored channel, ultimately driving more sales. 

Better Customer Data Collection

More visibility across multiple retail channels means more personalized shopping experiences. If you are able to keep track of your customers across various channels, you can understand their preferences better, which helps you to provide improved service. If you are able to track individual customers you can learn a lot about them and your products including:

  • How to tailor ads to certain buyers
  • Patterns in the customer journey
  • How often they visit you before purchase
  • What they prefer to buy online vs. in-store
  • Where they prefer to buy vs. compare merchandise 

Well implemented omnichannel will allow you to gain insights into shoppers buying habits and preferences. This data will help you create tempting, personalized offers that not only persuade your customers to purchase more, but also keeps them coming back with the knowledge that you know them better than the competition. 

Competitive Advantage

According to SPS Commerce, a meager five percent of retailers have fully implemented the omnichannel strategy. This gap provides an incredible competitive advantage to retail businesses that have the potential to adequately execute this strategy. 

Find out what your competitors are doing. If this gap is present in your sector, you've got a great opportunity. This can translate into greater brand awareness and more sales if you can get a one-up on customer experience. 

Even if your competitors are already on the omnichannel bandwagon, that still provides you a huge opportunity to learn from the savvy companies, and especially the mistakes they make. 

Maximize Marketing Return

Choosing the right digital and physical channels sometimes seems like a stab in the dark. But with all the great data and customer insights from a good omnichannel strategy, you can learn how to best maximize your marketing efforts. 

With a newfound ability to better target distinct market segments at just the perfect time, you'll be more likely to hit the mark. There are a plethora of online tools, so you can test and experiment with new marketing strategies cost-effectively on a smaller scale and, if successful, ramp up efforts.

Integrated Analytics & Business Insights

With the implementation of omnichannel, retailers have access to multiple communication channels that provide the opportunity to develop several streams of information that their businesses must understand and analyze to satisfy both customer and business needs.

Analytics offers you the ability to comprehend, quantify, evaluate and review their communication with consumers. And now more than ever there are a lot of affordable options that help you keep up. It is essential for maintaining a good omnichannel strategy, but also for identifying business opportunities.

With this unique cross-channel capability offered by the omnichannel retail system, you can easily interact with consumer data, regardless of where the data is generated. In addition, you can cross-reference this data with data generated from other similar consumers across various platforms.