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September 1, 2023

What is omnichannel strategy? From theory to implementation

If you’ve made it this far, you’re likely familiar with omnicanality. But does it align with your business? And what’s the best way to implement an omnichannel strategy into your brand?

Users expect user-friendly experiences from brands, with personalized and consistent service across all the channels where the brand is. This forms the foundation of any omnichannel strategy. Yet, believe it, implementing it is more challenging than it looks.

The truth is, if your business doesn't follow this logic, users may feel misled. But don't worry, we'll dive into the principles of the omnichannel strategy and the benefits to your business.

The omnichannel strategy

This strategy ensures a positive and fully integrated experience. It seeks to nurture consumers and, most importantly for them, deliver the same offer in stores and online. Overall, omnichannel is based on a customer-centric strategy.

Omnichannel strategy benefits

1. Increases profit

An omnichannel strategy only exists if your brand is present on multiple channels. In this way, the user's purchase decision process is simplified, and new customers will likely find your business. This can lead to increased conversion rates, which means an increase in profit.

2. Improve customer satisfaction and retention

Simplifying the purchasing process reduces friction during conversion. Even so, consumer satisfaction ties into this and an integrated and fluid experience. But keep in mind that it also has to do with your product. Your product must meet or exceed consumer expectations.

If you meet these requirements, you can increase the retention rate and LTV (Lifetime Value). These are crucial metrics for your business viability, as they help to support the CAC (Cost of Customer Acquisition).

3. Supports the BOPIS and ROPO effect

The BOPIS concept (Buy Online, Pick-up In-store) happens when consumers buy products online and then pick them up in-store. On top of this, other consumers prefer to look up products online and buy them in the physical store. And this is known as the ROPO effect (Research Online, Purchase Offline).

BOPIS and ROPO trend growth (2019 vs. 2021)
Source: Criteo

As you can see in the image, both trends have grown significantly. In this sense, brands must adapt to consumer behaviors for the business's long-term success.

Apart from rising trends, they offer many advantages for brands and customers. Brands have benefited from these effects by registering a traffic boost. On the flip side, consumers also experience advantages. They can enjoy faster services, easier exchanges and returns, and no shipping costs due to in-store pickup.

If you've heard of multichannel and cross-channel approaches, you are probably are wondering how they differ from omnichannel. Let's take a look at that now.

Multichannel vs. Cross-channel vs. Omnichannel

These strategies share a trait: they have more than one channel available to users. Yet, given the divergence in how the channels are integrated, the user experience is completely different.

Multichannel vs. cross-channel vs. omnichannel

Multichannel strategy

Even though the user can access multiple channels, these and their tactics are independent. This means that the user experience can differ depending on the channel. For instance, a user may buy a product online that can't be picked up in-store.

Cross-channel strategy

In this strategy, brands use communication and distribution channels to interact with consumers. What makes it different from the previous approach is that users can start engaging in one channel and smoothly change to another. This means the channels are integrated in this strategy for a more seamless experience. For instance, a consumer can buy a product online and pick it up or return it at the store.

Omnichannel strategy

Omnichannel goes beyond the capacity to extend user experiences across different channels. The pivotal point lies in developing an integrated and strong experience across the brand's channels. In omnichannel, user data is present across all channels, offering a holistic view of the user. This game changer enables 100% tailored interactions and messages, through gamification, for example. Here, the user takes center stage, harmonizing their entire experience.

H&M case

To help you grasp the difference between a multichannel strategy and a cross-channel or omnichannel strategy, let's look at the purchase experience at the H&M store chain in Portugal (2022).

In this brand, integration and consistency between channels fail to prevent the exchange/return of an item purchased online in the physical store. This process is only possible through post, with associated costs for users who are not H&M members.

Nike case

Nike is the best example of a brand that follows an omnichannel strategy. Their approach is entirely consumer-focused. Consumers can shop online or in-store, but above all, they have a personalized and integrated experience across all channels. For instance, if a customer views a product on the website, Nike suggests related products in-store. Amazing, isn't it?

The big difference is the loyalty program - NikePlus. This program allows the accumulation of benefits and rewards across all brand channels. But the real revolution lies in the parameterization and tracking of physical activities, among other features.

It's evident that Nike strives to set a consistent experience across all channels. This is only possible due to Nike's commitment to maintaining its appearance and positioning across all brand touchpoints. These efforts ensure a seamless, smooth, and tailored user experience.

How to create an omnichannel strategy?

Setting up an omnichannel strategy is complex and time-consuming. Once implemented, this approach requires parameterization and adjustment based on outcomes and user feedback. Even so, omnichannel's core is usually applicable across diverse business models. So, let's explore it.

1. Connect your website with existing digital channels

To get an omnichannel customer experience, start with the simplest. Integrate all your channels to make the user experience as homogeneous as possible.

Even complementary channels like social media must offer a consistent experience. If it aligns with your business, developing an APP can prove powerful, keeping your brand just a click away from users. Furthermore, APPs open the door to crafting a more personalized user experience. But watch out! There's no point in being present everywhere if it doesn't make sense in the consumer journey or if the experience isn't optimized. Your presence on each channel must be a solution for the customer. Ensuring responsiveness on all devices, especially mobile devices, is also necessary to prevent friction throughout the consumer journey.

2. Integrate digital and physical channels

If you have digital and physical distribution channels, it makes sense to integrate them. You've probably found a product you liked on a website or APP and then decided to buy it in the store so you could feel it, right? And there's nothing more unpleasant than being unable to check the stock at the store or if this information is inaccurate.

Thus, it's vital to integrate the two types of channels and ensure that the information is synced and correct.

3. Communicate similarly across all channels

To foster uniformity, your message must be coherent and consistent across channels. Yet, it's important not to standardize your communication. You should guide and tailor every message to ensure a unique and great experience. Since customers have distinct needs and preferences, embracing this type of communication becomes essential.

4. Select the proper automation tools

Automation tools are vital to targeted communication at the right time. Although, you first should know on which channels your user is. What are their online behaviors? Are they similar to those in a physical store? It's important to have answers to this.

After this evaluation, begin by implementing an email marketing automation strategy. Here, you can design and send automatic messages to your subscribers based on their actions and behaviors. Employing such tactics ensures you deliver the right message to the right user at the right moment.

If you have physical POSs (Point of Sale), using geolocation data can help you make 100% targeted communication. For example, if you have a mobile APP, you can use geolocation tools to send push notifications. These notifications let your customers know when new stock arrives in their area or when the products on their wishlist have limited availability.

5. Audit the user experience

Make the most out of the data provided by CRM tools or GA4. These data insights grant you a deeper understanding of your online consumer and its objections. By studying and acting upon this data, you can unblock these obstacles and optimize your omnichannel strategy.

To implement an omnichannel strategy, you should understand how users arrive at your website. This data is available through the “Conversion Paths Report” in Google Analytics 4. With this report, you can pinpoint the conversion-oriented touchpoints in the customer purchase journey. After this analysis, it makes sense to broadcast online ads and other tactics.

Example of “Conversion Paths Report” from Google Analytics 4
Source: Google Merchandise Shop - Demo account

6. Test

As we've seen, an omnichannel strategy is consumer-focused. In this regard, whenever new data about their behavior emerges, you should adapt the strategy or check its viability.

You should regularly test new tactics involving CTAs, subject lines, content formats, user segments, and the channels themselves. Only through these tests you can identify what works best for your business.

Let’s wrap things up

Taking into account the consumer's complex and individualized buying behavior, implementing an omnichannel strategy is essential. To set up this, manage the various touchpoints in an integrated way. This is the best solution to stand out from the competition. Remember, the strategy must support all sales funnel phases and present solutions at the right time, always considering the consumer's experience.

Don't forget that this strategy might be complex and take much time to implement. However, this setup can increase your conversion rate, customer retention, and LTV while cutting the customer churn rate.

Not sure where to start implementing your omnichannel strategy? Our specialized team in consumer behavior may have the solution for you. Contact us and find your WAY to success.