Why Omni-Channel Retail Is The Future of Commerce


In the past, retailers relied on a single channel to do business. This was the traditional way of doing things. Everything was centered around a single-distribution system, as retailers either had a brick-and-mortar store (offline) or a shop online (although this was less common several years back).


Prior to the digital age, this specific model was actually quite effective, as a single channel meant the retailer could minimize expenses and focus their entire strategy solely in that channel alone. However, as the Internet grew mainstream, consumers’ expectations shifted.


An increase in smartphone penetration all across the world meant that more people were accessing the Internet through multiple devices and platforms. Things moved quickly and with companies like Amazon, people’s patience for delivery time shortened. The single channel solution had reached its limits and an omnichannel approach has become the new-age way of retail. It serves as a model in which multiple channels, on and off, are integrated to create a connected shopping experience.


The modern consumer

Over the course of the past few years, there is no denying that the way consumers and shops interact have changed. While companies held a lot of leveraging power in the past, now that has flipped, putting the power in the hands of the consumer. Moreover, the consumer of five years ago is far different from the modern customer. Technology has drastically transformed the retailers need to do business.


  • 24/7 consumption – You cannot hope to serve your customer for a specific period of time. In today’s world, with chatbots and online channels, the retailers need to be able to serve their customers at all times of the day. This doesn’t necessarily mean you need to leave your brick-and-mortar shop open 24/7 (although if possible, that’d be best), but it does mean you need to open your mind to finding ways (particularly online) on how to do so because today, the moment they have to wait a bit, their interest has already faded.


why-fashion-retailers-are-embracing-the-omni-channel-model-24/7 shopper


  • Greater control and information – The Internet has opened the world up to a treasure trove of information, both good and bad. This has allowed the modern consumer to be able to search up different prices, product details, and photos of said product at the touch of their fingertips. Thus, they are more in control of the shopping experience. As Gayatri Patel, eBay’s Director of Global Data comments, “They have the means to explore, research and share every purchase decision. And they can do it in a very quick way. If you lose them, it may not be just for that purchase. It may be for a long time. You have to be responsive to their needs immediately instead of trying to direct them. That balancing act is the biggest challenge.”


  • Global economy – Along the lines of being connected to information, it has also allowed consumers to shop into the global territory. The Internet closes barriers and allows shoppers to find products from all over the world, meaning more options.


  • A closer relationship with brands – Although it is harder to grab the attention of customers these days if you are able to do it right, the modern consumer may remain more loyal with those they feel they connect with. Social media platforms allow companies to have a conversation with their customers – get real-life feedback on what they may be doing right and wrong. The line between a customer and company are no longer divided.


Today, Gen Z shoppers are able to seamlessly navigate through social media to online websites without any issue. They are accustomed to this way of shopping, and for this reason, are more trustworthy of brands that have an online presence, with social proof. This makes them more susceptible to spend their money on their brand. Studies show that Gen Z spends around 2 -3 times more shopping on social channels than an average consumer.


The benefits of the omnichannel model

There are numerous reasons why companies are shifting to an omnichannel model. Obviously, it works. But besides having a further reach an audience and having greater visibility to your inventory, the following are some additional benefits to adopting an omnichannel model.


  • A deeper understanding of the customer journey – With more channels open to the retailer, they are able to track the preferences of their consumers and learn exactly what is desired and where they buy it most. This sort of data can open up an array of insight into a customer’s journey, and unravel the underlying question of ‘why.’ Moreover, by having more awareness for this journey, they can provide the right promotions at the right time.


  • Personalization of consumer’s shopping experience – Understanding the customer journey as mentioned above is one of the key driving forces of creating a more personalized shopping experience. Coupling your omnichannel strategy with predictive analytics solutions that can predict what your consumer wants to buy, and in what style, color, and size, you can create a truly personalized experience.




  • Increased sales –  According to a study by McKinsey Research and Harvard Business Review, they noticed that those who did omnichannel retail had increased sales compared to single channel retailers. This was explained by the fact that “omnichannel retail customers tended to spend an average of 4% more on every shopping occasion in store.” Moreover, when it came to online shopping, perhaps due to the convenience and ease of pressing a single button, they spent 10% more than single-channel counterparts.


  • Improved customer service – While single channel retailers are restricted to exactly that – a single channel – omnichannel retail extends their hand out multiple avenues, meaning more focus on serving a wider audience. These days, chatbots help with round the clock service, which means customers are tended to at all hours of the day. It was found that omnichannel customers get a higher retention rate. Furthermore, while old models are restricted to a stream of data, omnichannel produces big data, thereby helping support customer demand on a larger scale, as with the right analytics tools, you can get relevant insights.


  • Real-time reporting – Often times, omnichannel strategies require the data to be centralized. For this reason, it is possible for companies to view a report of their inventory in a single place.


The challenges of the omnichannel approach

With any transformation in business, there are challenges that both the organization and the individuals will face. This is no different from embracing the omnichannel approach, as retailers that are particularly accustomed to selling in one channel will find it difficult to branch out. The following are just a few of the major challenges retailers may experience.


  • Defining the right KPIs – With a single channel strategy, the performance indicators that were measured in the past would not be as effective for an omnichannel approach. In other words, a brick-and-mortar may set the number of people entering the store and the sales made as a KPI, but this would not work with an online website. Consumers behave differently in physical stores versus virtual ones, and the bounce rate of a customer is much higher and faster online. This means that the approach to keeping them locked into your page versus your store is much different. To overcome this challenge, the business would require retraining management and workers in understanding these differences.


  • Aligning structure and function – Speaking on the different strategies required for each individual channel, an organization will have to go through changes in their internal structure to ensure that the right actions are being made per channel. For example, an online channel may have significantly different priorities than an offline one. Unlike previous single-channel models, omnichannel retail structures itself around the consumer, rather than the retail channels working in silos. With this adjustment of new structures and objectives, a challenge could be getting the stakeholders and organization as a whole to transition smoothly to such change. 


  • Integration and adjustment of new technologies – One of the biggest difficulties that old retailers have with expanding into omnichannel are adopting new technologies. Whether it be social media networks or simply managing their own online shop, retailers that are used to dealing with a physical store alone may not be entirely ready to enter this new world. A lot of the times, greater efficiency and effectiveness requires deeper IT integration, and this is definitely one challenge that many retailers are facing – knowing what to do and where to start.


  • Reorganizing the supply chain – Changes in the supply chain is inevitable with so many channels to manage. Retailers need to have access to online and offline store inventory information, proper replenishment cycles for products, and more. In addition, this information tends to be shared through a number of information technology systems. It is already a challenge for the supply chain end to keep up with all this demand from the backend, but with the implementation of new channels, this could be even more difficult.


Omnichannel strategies for retailers

As you can see, there are definitely pros and cons to embracing the omnichannel model. It may seem daunting for those not quite tech-savvy, but it is a necessary step in this day and age. Once a retailer decides to move toward the omnichannel approach, the next question is what do they do next?


  • Integrate the online and offline experience – These days, a lot of successful omnichannel retailers are bringing the two worlds together in a store. Often times, when consumers are shopping in a brick-and-mortar, they’d like to pull up their phone to receive more contextual information about the product. Smart retailers are using this fact to bring more information about promotional deals and/or coupons that the customers can receive by accessing their online app or visiting their website. This allows users to go into their website, while in the physical store, and engage with both.




  • Using mobile to bring customers in-store – As mentioned above, retailers can leverage maximize the effectiveness of their online store for the betterment of sales in their offline stores through promotional deals. Through purchase history and customer profile data, retailers can send ‘on-the-go’ coupons to their phone (or email) that can be redeemed at the offline store. As a result, organizations can leverage greater revenue in-store.


  • Working with social Many brands are using the power of social media to market their company and get the word out of special products or releases. Since a lot of marketing has to do with storytelling and social media is the perfect place to share a story, companies are looking more to leveraging the multiple platforms like Twitter, Instagram, and Facebook.


Final thoughts

The omnichannel model is all about making sure customers are provided the best shopping experience they can fathom, which in turn increases the chance of them returning. It is centered on the idea of creating a seamless shopping journey, from discovery to purchase, all the way through.


From mobile, web, social, and brick-and-mortar, there is a multitude of ways to target your audience in this modern day. In this constantly evolving landscape, the people who understand how to leverage the data points and insights from each retail channel are the ones who win. Those who open themselves up to the changing new world can stay ahead. The power of new technologies such as machine learning for more accurate predictions for retailers is not some esoteric option anymore. They are necessities to keep your business growing and moving forward.   


Today, omnichannel is the way to go. It merges the physical and the digital as one. It gives customers more ways to shop and purchase things from you. Moreover, it helps to increase engagement, as smart searches can help to improve efficiency in discovering the right product

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