Omnichannel

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Omnichannel is a neologism describing a business strategy. According to Frost & Sullivan , omnichannel is defined as "seamless and effortless, high-quality customer experiences that occur within and between contact channels". [1]

Contents

History

"Omnis" is Latin for "every/all" and here suggests the integration of all physical channels (offline) and digital channels (online) to offer a unified customer experience. [2]

The effort to unify channels has a long history across all market sectors. Efforts like single-source publishing and responsive web design, however, were usually focused on internal efficiencies, formatting consistency, and simple de-duplication across channels. As the number of channels proliferated, the potential for a disjointed experience when switching or working with multiple channels increased. Channels like mobile devices, the mobile web, mobile apps, contextual help, augmented reality, virtual reality, and chatbots are used in addition to traditional physical and human interaction channels. This creates a complex matrix of possible ways an individual can engage an organization and its offerings or complete a task.

Retail, until the early 1990s, was either a physical brick and mortar store or catalog sales where an order was placed by mail or via telephone. Sale by mail order dates back to when British entrepreneur Pryce Pryce-Jones set up the first modern mail order in 1861, selling Welsh flannel. [3] [4] Catalog sales for an assortment of general goods started in the late 1800s when Sears & Roebuck issued its first catalog in 1896. [5] In the early 1900s, L.L. Bean started its catalog business in the United States. [6]

AOL, CompuServe and Prodigy experimented with selling through their proprietary online services in the early 1990s. These companies started sales channel expansion, while general merchants had evolved to department stores and Big-box store electronic ordering. In August 1994, NetMarket processed the first Internet sale where the credit card was encrypted. Shortly thereafter, Amazon.com was founded and the eCommerce sales channel was established. Mobile commerce arrived in 1997, and multichannel retailing really took off.[ citation needed ]

Omnichannel's origins date back to Best Buy's use of customer centricity to compete with Walmart's electronics department in 2003. The company created an approach that centered around the customer both in-store and online, while providing post-sales support. Omnichannel was coined as a form of "assembled commerce" and spread into the healthcare and financial services industries. [7]

Finance

Omnichannel banking was developed in response to the popularity of digital banking transactions through ATMs, the web, and mobile applications. The most popular parts of omnichannel banking include 'zero drop rate' channel integration, individualizing channels for customers and marketing other channel options. [8] Banks receive in-depth research about customers to build relationships and increase profitability. [9] [10]

Government

In 2009, the omnichannel platform started to be used in governments through Twitter interaction. Governments are developing web and mobile-enabled interfaces to improve and personalize the citizen experience. The United States government digital strategy includes information and customer-centric shared platforms that provide security and privacy. [11] Omnichannel is used to communicate with citizens through the platform of their choice at their convenience and use feedback to analyze the citizen experience to better serve. [12]

Healthcare

Due to fragmentation between health providers, hospitals, pharmaceutical companies and patients, omnichannel is developing to improve the customer experience in the healthcare industry. [13] Omnichannel healthcare focuses on integrating data, technology, content and communication, while coordinating patient's results through digital channels. [14] [15] In September 2015, the University of Pittsburgh Medical Center received media attention for its customer service technology, which was integrated in 2009. The UPMC Health Plan uses an omnichannel system to improve customer engagement and contact resolution. [16]

Retail

Omnichannel retail strategies are an expansion of what previously was known as multichannel retailing. The emergence of digital technologies, social media and mobile devices has led to significant changes in the retail environment and provided opportunities for retailers to redesign their marketing and product strategies. [17] One of the challenges that retailers are facing as a result of increased channels, is to provide a personalised experience for customers. Put differently, in retailing omnichannel marketing has come to be understood as "hyperpersonalization". [18] Another challenge is to track users' behaviors both online and in the brick and mortar stores, an option that is being made available by using AI platforms. In omnichannel retailing, one main backend handles all the customer data whether on the Web, mobile or a brick and mortar store. [19]

Customers tend to be looking for information in the physical store and at the same time they are getting additional information from their mobile devices about offers and possibly better prices. Omnichannel allows organizations to allocate inventory availability and visibility across locations vs. each channel holding specific units. [20] A number of features, like size charts, easy return policy and same-day delivery, have boosted ecommerce and promoted omnichannel shopping. [21]

An omnichannel retailer has traditional methods of mass advertising integrated with emerging interactive channels. Websites, email offers, social media messaging and physical stores all show the same messages, offers, and products. The omnichannel concept not only extends the range of channels, but also incorporates the needs, communications and interactions between customers, brands and retailers. [20]

Contact centers

Omnichannel has overtaken multichannel specifically in the contact center. Businesses that maintain contact centers have been encouraged to add an increasing number of channels through which customers can interact with the business, including email, chat, SMS, and social media. Omnichannel contact centers offer customers the same experience across all channels, while providing customer service agents a simpler interface and richer set of data.

Outlook

Although omnichannel is said to be dictated by systems and processes, it is the customer who dictates how a transaction occurs. Systems and processes facilitate the customer journey to transact and be served. [22] Omnichannel is moving toward increased personalization based on analytics to make the customer experience more seamless. [23] According to an MIT report, omnichannel "is the central force shaping the future of e-commerce and brick-and-mortar stores alike." [24] [25]

Vs. multichannel

Omnichannel marketing vs. Multi Multi Channel Tag Cloud -5.png
Omnichannel marketing vs. Multi

The major difference between omnichannel and multichannel is the level of integration. Multichannel is usually identified as a non-integrated way to approach customers and inventory holdings, [20] while omnichannel requires coherent and absolute inventory integration. [26] More and more organizations have realized the opportunities and advantages of integrating multiple channels by adopting an omnichannel approach. [27] The boundaries between channels tend to vanish in an omnichannel environment, giving the customer a consistent brand experience. [28]

Vs. omni-digital

The major difference between omnichannel and omni-digital is the focus given to the strategy. With omnichannel, the company focuses on delivering the right content, on the right set of channels, at the right moment, to provide the most value to the user. With omni-digital, the company focuses on providing a consistent customer experience throughout everything digital, regardless of the channel used. The channel becomes secondary and the customer experience is the main focus. For example: If a member created their membership in a physical store, they can enjoy the same member benefits in the online store of the company without boundaries.

Key solutions

In the omnichannel world, display advertising, search engines, social media, referral websites, e-mail and mobile marketing can be considered independent channels, as each can promote one-way or two-way communication. Retailers need to find ways to integrate their online and offline channels to avoid segregated campaigns. [29] Proceed with the expectation that shoppers will swap across channels and devices, and keep promotions, messaging and language consistent across all channels and customer touch points. [20]

To adapt to the omnichannel concept, customer behaviours need to be understood by the retailers. Specifically, elements that might drive the customer to make purchase decisions; and the customer's paths to purchase, which relate to their lifestyle, time committed to the purchase and the distance to the retail store. Using an omnichannel marketing approach, retailers can provide precisely targeted incentives through digital and mobile promotions. [29] [30] [31]

Omnichannel solutions also allow brands and companies to tighten supplier controls and optimise their product inventory across numerous sales channels, ensuring that the optimum stock levels are situated in each location and the channels are kept up to date with stock information.

Retailing practices

Omnichannel means having a uniform customer experience. A simple example is that the design of the website should remain consistent with the mobile app and should also match branded physical environments. Consumers can shop the same way through in-store, website, and mobile. Regardless of the customers’ location and time, the order can either be delivered to the address directly, collected at the store, or collected from a retail partner. In the United States, retailers and brands are commonly selling online and offline. Online channels include branded webstores, marketplaces like: Amazon, eBay, Jet.com, Walmart.com and social channels like: Facebook, Google Shopping and Google Express. To ensure omnichannel and multichannel retail strategies are controlled and implemented efficiently, brands and retailers use software to centrally manage product information, listings, inventory and orders from vendors.

See also

Related Research Articles

<span class="mw-page-title-main">Retail</span> Sale of goods and services

Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and then sells in smaller quantities to consumers for a profit. Retailers are the final link in the supply chain from producers to consumers.

Personalized marketing, also known as one-to-one marketing or individual marketing, is a marketing strategy by which companies leverage data analysis and digital technology to deliver individualized messages and product offerings to current or prospective customers. Advancements in data collection methods, analytics, digital electronics, and digital economics, have enabled marketers to deploy more effective real-time and prolonged customer experience personalization tactics.

Multichannel marketing is the blending of different distribution and promotional channels for the purpose of marketing. Distribution channels include a retail storefront, a website, or a mail-order catalogue.

<span class="mw-page-title-main">Merchandising</span> Promotion of product sales

Merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to displaying products that are for sale in a creative way that entices customers to purchase more items or products.

<span class="mw-page-title-main">Online shopping</span> Form of electronic commerce

Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine, which displays the same product's availability and pricing at different e-retailers. As of 2020, customers can shop online using a range of different computers and devices, including desktop computers, laptops, tablet computers and smartphones.

<span class="mw-page-title-main">Brick and mortar</span> Class of organisations or businesses

Brick and mortar is an organization or business with a physical presence in a building or other structure. The term brick-and-mortar business is often used to refer to a company that possesses or leases retail shops, factory production facilities, or warehouses for its operations. More specifically, in the jargon of e-commerce businesses in the 2000s, brick-and-mortar businesses are companies that have a physical presence and offer face-to-face customer experiences.

The term mobile commerce was originally coined in 1997 by Kevin Duffey at the launch of the Global Mobile Commerce Forum, to mean "the delivery of electronic commerce capabilities directly into the consumer’s hand, anywhere, via wireless technology." Many choose to think of Mobile Commerce as meaning "a retail outlet in your customer’s pocket."

<span class="mw-page-title-main">Retail marketing</span>

Once the strategic plan is in place, retail managers turn to the more managerial aspects of planning. A retail mix is devised for the purpose of coordinating day-to-day tactical decisions. The retail marketing mix typically consists of six broad decision layers including product decisions, place decisions, promotion, price, personnel and presentation. The retail mix is loosely based on the marketing mix, but has been expanded and modified in line with the unique needs of the retail context. A number of scholars have argued for an expanded marketing, mix with the inclusion of two new Ps, namely, Personnel and Presentation since these contribute to the customer's unique retail experience and are the principal basis for retail differentiation. Yet other scholars argue that the Retail Format should be included. The modified retail marketing mix that is most commonly cited in textbooks is often called the 6 Ps of retailing.

<span class="mw-page-title-main">Digital marketing</span> Marketing of products or services using digital technologies or digital tools

Digital marketing is the component of marketing that uses the Internet and online-based digital technologies such as desktop computers, mobile phones, and other digital media and platforms to promote products and services. Its development during the 1990s and 2000s changed the way brands and businesses use technology for marketing. As digital platforms became increasingly incorporated into marketing plans and everyday life, and as people increasingly used digital devices instead of visiting physical shops, digital marketing campaigns have become prevalent, employing combinations of search engine optimization (SEO), search engine marketing (SEM), content marketing, influencer marketing, content automation, campaign marketing, data-driven marketing, e-commerce marketing, social media marketing, social media optimization, e-mail direct marketing, display advertising, e-books, and optical disks and games have become commonplace. Digital marketing extends to non-Internet channels that provide digital media, such as television, mobile phones, callbacks, and on-hold mobile ringtones. The extension to non-Internet channels differentiates digital marketing from online marketing.

A marketing channel consists of the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products get to the end-user, the consumer; and is also known as a distribution channel. A marketing channel is a useful tool for management, and is crucial to creating an effective and well-planned marketing strategy.

Customer experience, sometimes abbreviated to CX, is the totality of cognitive, affective, sensory, and behavioral customer responses during all stages of the consumption process including pre-purchase, consumption, and post-purchase stages.

<span class="mw-page-title-main">User journey</span>

A user journey is the experiences a person has when interacting with something, typically software. This idea is generally used by those involved with user experience design, web design, user-centered design, or anyone else focusing on how users interact with software experiences. It is often used as a shorthand for the overall user experience and set of actions that one can take in software or other virtual experiences.

<span class="mw-page-title-main">Omnichannel retail strategy</span> Business model by which a company integrates both offline and online presences

Omnichannel retail strategy, originally also known in the U.K. as bricks and clicks, is a business model by which a company integrates both offline (bricks) and online (clicks) presences, sometimes with the third extra flips.

Konga.com is a Nigerian e-commerce company founded in July 2012 with headquarters in Gbagada, Lagos State. It offers a third-party online marketplace, as well as first-party direct retail spanning various categories including consumer electronics, fashion, home appliances, books, children's items, computers & accessories, phones and tablets, health care, and personal care products. The company also has a logistics service (EXPRESS), which enables the timely shipment and delivery of packages to customers.

<span class="mw-page-title-main">Urban Ladder</span> Furniture retailer

Urban Ladder is an omnichannel furniture and decor retailer started in 2012 and headquartered in Bangalore, India. The company, founded by Ashish Goel and Rajiv Srivatsa, provides furniture and home decor products. Urban Ladder operates across 50 offline stores in India, including Delhi-NCR, Mumbai, Pune, Bengaluru, Hyderabad, and Chennai and continues to service other locations through its e-commerce website.

Mobile location analytics (MLA) is a type of customer intelligence and refers to technology for retailers, including developing aggregate reports used to reduce waiting times at checkouts, improving store layouts, and understanding consumer shopping patterns. The reports are generated by recognizing the Wi-Fi or Bluetooth addresses of cell phones as they interact with store networks.

Nykaa is an Indian e-commerce company headquartered in Mumbai. It sells beauty, wellness and fashion products through its website, mobile app, and over 100 physical stores. In 2020, it became the first Indian unicorn startup headed by a woman.

Omnichannel order fulfillment is a material handling fulfillment strategy and process that treats inventory as fully available to all channels from one location. While the internal fulfillment process may diverge to optimize the operations, the outbound process only diverges at the point of pack out and shipping.

Online to offline, commonly abbreviated to O2O, is a phrase that is used in digital marketing to describe systems enticing consumers within a digital environment to make purchases of goods or services from physical businesses.

Immersive commerce is an extension of e-commerce that focuses on improving customer experience by using augmented reality, virtual reality and immersive technology to create virtual smart stores from existing brick and mortar locations.

References

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  5. ↑ searsarchives.com History
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  7. ↑ Baird, Nikki (January 28, 2015). "Best Buy and the birth of customer centricity". Essential Retail . Archived from the original on February 6, 2020. Retrieved May 31, 2016.
  8. ↑ "'Digital' & 'Omnichannel' Remains Elusive in Banking". The Financial Brand . February 2, 2015. Retrieved June 5, 2016.
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  11. ↑ Estopace, Eden (August 20, 2014). "Governments also going omnichannel". Enterprise Innovation . Archived from the original on September 28, 2016. Retrieved June 5, 2016.
  12. ↑ Sutton, Mark (April 2, 2015). "Transforming the citizen experience". ITP.net . Archived from the original on December 6, 2016. Retrieved June 5, 2016.
  13. ↑ Gupta, Mayur (November 12, 2015). "Health Care Marketing Moves From Multichannel To Omnichannel". Ad Exchanger . Retrieved June 5, 2016.
  14. ↑ Solomon, Micah (October 16, 2014). "Omnichannel Beyond Retail: The Customer Experience In Healthcare, B2B, Professional Services". Forbes . Retrieved June 5, 2016.
  15. ↑ "Healthcare Marketing To Gen X: Take An Omnichannel Approach". eMarketer . October 30, 2014. Retrieved June 5, 2016.
  16. ↑ Tierney, Jim (September 1, 2015). "Customer Engagement Rises with University of Pittsburgh Medical Center Health Plan". Loyalty360 . Retrieved June 5, 2016.
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  19. ↑ "How to use ML to solve FMCG business problems using a recommendation for a Shopping List as a use case". ciValue. 2020-12-02. Retrieved 2021-04-13.
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  23. ↑ Everett, Cath (November 2015). "First steps taken on 'omni-channel' customer experience". Computer Weekly . Retrieved June 4, 2016.
  24. ↑ Green, James (January 27, 2014). "Why And How Brands Must Go Omni-Channel in 2014". Marketing Land . Retrieved June 4, 2016.
  25. ↑ Regalado, A. & Goldfarb, A. & Metz, R. & Kopytoff, V. & Fitzgerald, M. & Anders, G.. (2014). "Beyond the checkout cart". ResearchGate . pp. 61–67. Retrieved June 4, 2016.{{cite web}}: CS1 maint: multiple names: authors list (link)
  26. ↑ Kersmark, Malin; Staflund, Linda (2015). OmniChannel Retailing Blurring the lines between online and offline.
  27. ↑ Rowell, James. "Omni-Channel Retailing". Romanian Distribution Committee Magazine. 4 (2): 12–15.
  28. ↑ Multichannel vs omnichannel - Move from transactional to 360-degree brand experience
  29. 1 2 Fiona., Ellis-Chadwick; Education., Pearson (2016-01-01). Digital marketing. Pearson. ISBN   9781292077611. OCLC   968531125.
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