Omni-Channel Ecommerce: Where Are We Now?

by Jonathan Tarud
Blog Post

Omni-channel isn’t the future, it’s here now, and it’s vital for retailers and ecommerce owners.

A few years ago, we wrote about where omni-channel was headed, and why it was an important strategy for brands to grasp. Omni-channel shopping means using a combination of online and offline technologies through the shopping journey. In our mobile and technology-dependent world, customers demand strong omni-channel options.

This extract from MyTotalRetail talks about the scope of the omni-channel shopper:

“…this consumer uses all channels — store, catalog, call center, web and mobile — simultaneously…omnichannel shoppers outspend multichannel shoppers by over 20 percent.”

Omni-channel shoppers are making good use of the technologies available to them. They browse on their mobile phones while waiting for an appointment, check out products on their tablet at home, and go into retail stores to view those products in-person. They expect a seamless experience between these different channels.

Brands work to create that cohesive experience between channels, and this is one differentiator between omni-channel and traditional marketing. The old approach was to optimize each channel on its own, without consideration of the wider experience.

Omni-channel is typically the domain of larger retailers, rather than startups. They have the capital for physical retail stores rather than web-only, and they put a lot of focus on the customer experience. (Arguably, many are not doing so well with truly delivering what customers would like, though!)

What do customers want?

This is always the big question for any retailer – how do we meet customer demand? When it comes to omni-channel and modern technologies, that’s not actually the easiest question to answer.

You can go out and survey customers, but realistically, what do they know of emerging technologies? Customers will tell you what they think they need based on their current realm of experience. If you had asked someone in the 1880s what would improve their personal transport options, they probably would have described a bigger, more powerful horse, or a sleeker, more comfortable wagon. Motorized cars would not have entered the picture.

If your company is focused on being innovative and delivering the latest technologies, you might be surprised by the answers you get. However, these answers don’t mean that a foray into some of the latest technological solutions won’t be greeted enthusiastically – it may just mean you need to do more work to promote those options. It wasn’t that long ago when we couldn’t even conceive the idea of shopping on a mobile phone…

What is the state of omni-channel?

When we wrote previously about omni-channel, there was still a strong preference for making the final purchase in-store. This has now shifted, according to survey results, with a roughly even split between online preference and in-store preference.

Interestingly though, there’s still quite a difference between how much people spend in-store vs. online. Those surveyed spent 64% of their budget in-store, leaving just 36% for online purchases.

There are clear demographic differences in spending behavior too, with Baby Boomers and Seniors spending less online, while parents shop more online than non-parents.

As for when and why shoppers choose the channel they do, it really boils down to whatever is the most convenient at the time. Very few of those surveyed had only bought items through one or two channels – instead they tended to choose channels based on convenience or cost-effectiveness.

For example, a shopper might research a large electronic purchase online, but prefer to be able to go and see the product in-store. Even then, 25% said they had made an online purchase while in-store.

What is Amazon doing?

At the time of writing our previous omni-channel article, Amazon was about to open its first bricks and mortar store. Given that Amazon owns up to 44% of all digital sales, they would appear to be perfectly placed to take advantage of omni-channel strategies.

Amazon has currently just one “Amazon Go” store, available for their own employees in Seattle. They have acquired Whole Foods and are offering special deals to Prime members. They have also opened a chain of their own branded book stores (Amazon Books), which a CIO article explores in terms of the omni-channel experience.

Interestingly, the CIO assessment finds that even the giant that is Amazon has not yet completely mastered omni-channel. Specifically they note:

  • The book stores seem detached from the online experience. For example, you can’t buy online and pick up in-store.
  • You can’t discover online if a particular book is available at a nearby store.
  • There’s no option to contact local stores to ask about the availability of items that are out-of-stock on Amazon.com.
  • “Despite needing to scan to see the price, you cannot then create a cart and pay via the app. You still must wait in line and hand your items to a human cashier. There is no form of self-checkout.”

The final assessment of this particular writer was that, while Amazon is in the omni-channel race, they’re probably not leading the pack. Who’s doing better? A Total Retail report on top omni-channel retailers identified UGG, DSW, Urban Outfitters and Zumiez at the top, each scoring the maximum 100 points.

How has technology changed?

Three years or so ago, mobile shopping was really maturing in terms of popularity, and we knew that shoppers tended to skip between devices during their shopping experience.

Today, we’ve got more technology options maturing and coming into play when it comes to omni-channel. These are bound to have an impact in the future. Here are just a few:

Augmented reality (AR)

AR is already a reality in many retail settings. It’s moving to a stage beyond “gimmick” to essential technology in the shopping experience. In fact, it’s helping customers to visualize and salespeople to close the sale.

We see AR in stores such as Lowe’s or IKEA, where it is used to help customers visualize how furniture or appliances will look in their own home. Lego uses AR to show shoppers what a fully-built project will look like.

One thing about AR is that it’s more accessible to more people. It usually involves using an app to create the vision, which with the proliferation of smartphones, most people will have access to. While in a Lowe’s store, you pull up the Lowe’s App to find out if that refrigerator is going to fit the space you have at home. It’s omni-channel at its most convenient.

The video below is a good example of how AR is being used by American Apparel:

[youtube https://www.youtube.com/watch?v=0O9CUpqSNRU?rel=0]

Virtual Reality (VR)

Virtual reality (VR) tends to be debated a bit more in terms of expectations, versus likely adoption by consumers. When you think about the mechanism of VR, in order to use it, people need to wear special headsets, making it a bit less practical than AR. As Total Retail reports, uptake has been slower and it is a technology “yet to mature” in the retail space.

Notably, Alibaba has lead the way with a virtual mall, while brands such as Topshop have used VR to garner in-store engagement and create an exciting experience. Visitors to North Face stores could don a VR headset, then virtually tour Yosemite National Park and the Moab desert alongside climbing celebrities.

This kind of interactive and immersive, “try before you buy” experience is the real power of VR. It always helps if customers can genuinely picture themselves using the product.

Machine learning

Machine learning is being applied in a variety of ways by retailers, but the bottom line is that it’s a great way to optimize the use of data. For example, machine learning is being used to deal with simple customer requests via chatbots. It’s also being used to optimize offers to the customer, ensuring the most likely and relevant things are offered.

“With machine learning, retailers can take the leap from past and present data to future in order to better understand and meet their customers’ needs.” (The Future of Customer Engagement and Commerce)

Dynamic pricing is another application of machine learning for retail, which is seen in-store and online. It uses an algorithm to take key pricing variables into account, so that the most appropriate pricing can be determined at any given time.

How Koombea can help

It’s important that omni-channel retailers are up-to-date with what they offer both in-store and online. Koombea in-particular can work with you to develop engaging app and online experiences for your customers.

For example, Koombea can:

  • Work with Shopify Plus to build complex integrations
  • Update and customize your check-out experience to make it more effective
  • Build or retool apps to modernize the features.
  • Build digital experiences in mobile apps that drive customers to retail stores for purchases. Examples include: mobile ordering, in-store pickup; mobile gift carding; omni-channel shopping carts, creating a consistent experience between devices and modes.
  • Integrate digital in-store technologies.

Want to know more about how we can help? Connect with us here today.

by Jonathan Tarud
Blog Post