Mastering Omnichannel Strategy: A Guide to Enhance Customer Experience and Boost E-Commerce Success

Lucas Tempestini
November 13, 2023
min reading time

Mastering Omnichannel Strategy: A Guide to Enhance Customer Experience and Boost E-Commerce Success

I'm confident that you have encountered these terms while browsing the internet. Perhaps you've come across information about omnichannel strategy, and you might already understand what it entails.

But do you still find this term too mysterious to understand how it applies to a company's daily routine?

If you're still unfamiliar with those terms, come with me, and everything will be crystal clear in a few minutes.

Today, we are discussing:

  • The meaning and pure concept of omnichannel;
  • The difference between multichannel and omnichannel strategies;
  • How this concept evolves into a genuine business strategy;
  • Why the largest e-commerce platforms in the world have been applying it for years and will continue to invest more in omnichannel experiences;
  • How you can start an omnichannel strategy for your retail or e-commerce business.

So, here we go!

Most of the time, the omnichannel concept is related to similar terms, such as 'multichannel' and 'cross-channel,' especially regarding e-commerce and online sales platforms.

But what does all of this mean, after all? And how do these concepts differ from each other?

First and foremost, let's understand the source of all those terms:

  1. The “multi” prefix comes from Latin, meaning multiple or several;
  2. “Cross” comes from crux, which means something that crosses or traverses;
  3. On the other hand, “Omni,” in Latin, means everything, universal, something that encompasses all possibilities and variables.

Similar! So, what’s the difference?

The Omnichannel experience goes beyond being in all the sales or communications channels, which is usually what relates to the multi and cross-channel concepts.

Many people will still say (mistakenly) that, to be 'omni,' you just need to make your app for smartphones reflect your website’s identity and make your website reflect the physical store environment.

However, we can’t forget that 'omni' means 'EVERYTHING,' and the entire purchase process is performed by one entity: the customer.

The focal point of the omnichannel strategy is the customer experience, something that is not prioritized in the other two concepts. With that in mind, it is easy to realize that it is more than simply standardizing across the app, website, and store.

In fact, it has to do with the customer journey and how all those sales channels make the purchase decision easier for the customer and simplify the sales process for the merchant.

The Fragmentation Dilemma

Omnichannel ends up being a powerful concept in that it is not only a brand that influences the customer to make a purchase or change their mind. Comparisons among different stores also contribute to purchase decisions, impacting the overall time to market for products and services.

For example, you can search for the prices of a pair of Nike sneakers on Dick’s Sporting Goods website, save them in your shopping cart, and then visit a shopping mall to compare the prices. Would it be surprising if all the information you have collected from the Internet was useless there?

Either because you hadn't found the model you wanted, each store offers different conditions, or whatever the reason is, I bet you have already been through this sometimes. You can give me many other examples of how the online and offline search experiences are different and completely fragmented.

This impairs the purchasing experience for Nike's customers. However, since Nike doesn’t sell its products directly to end-users, it is not responsible; instead, the stores and resellers are.

Again, we see the relationship between the omnichannel experience and the customer's purchase experience and journey.

This diagram can help you understand the frontier between multichannel and omnichannel, translated right below:

Omnichannel Strategies

Omnichannel Strategies

But why do stories like the one of Nike’s customers happen?

The first and most crucial point is the customer. Any strategy that aims to work well must have the customer as the primary focus. And this makes perfect sense, doesn’t it? If you don’t make them happy, they may buy your product once but are unlikely to return.

The idea here is to obtain customer loyalty, not only because of product quality, price, or service provided. All of this is a prerequisite for any business to succeed. The customer has to come back because he/she had a unique experience when buying from you, something that will not happen if he/she buys from your competitor.

Or, if it happens with your competitor, the customer will have personal reasons that lead them to consider your e-commerce channels as the most suitable option for him/her. After all, every person feels differently regarding experiences and brands. I will talk more about this consumer profile later.

Another point is that the movement toward an omnichannel model is still a little slow because it didn’t keep up with the digital transformation brought about by smartphones, wearables, and smart devices.

This is even more abstract to the companies!

To make it a little clearer: currently, we spend more time in front of smartphones than in front of the TV. It’s 147 minutes against 113. And if that's the case, why do we still think of the purchase journey in the 'traditional' way?

Would you be surprised if you found someone searching for online prices inside a physical store? I don’t think so!

And What if a Channel Disturbs the Other?

If you are a person who sees the glass as half-empty (that is, sees more problems than opportunities), you may even think this is crazy, and that something like a customer searching for prices in e-commerce channels while buying at the shopping mall will cause 'cannibalization' among your channels.

However, I’m sorry to tell you, but you are probably wrong.

A recent study by UBS has shown that most people who buy at Walmart physical stores prefer to buy online on and not on!

Of course, the experience on the Amazon website is better in the digital environment.

That is, the experience is already fragmented, so your digital channels will not disturb each other.

Then I keep thinking, why is this experience being fragmented?

The CUSTOMER is the Focus

Being omnichannel has a lot more to do with the customer experience. Not just for YOUR or THEIR consumer, but for ALL consumers, in all stores. It has much more to do with using all your available channels to bring the best purchasing experience to the consumer.

That’s why fragmentation doesn’t really matter, after all.

Amazon makes a concerted effort to facilitate sales from when users land on their platform. However, the platform is cognizant of the fact that a significant portion of transactions don't occur instantaneously.

That's why Amazon invests heavily in remarketing advertisements, which appear to follow users across multiple websites after they search for a specific product. They incentivize you to create analyses and assessments of products and other tools, encouraging you to make a purchase not only at the first encounter but also during subsequent interactions, be it the second, third, or umpteenth time.

And how to do that?

One of the initial steps in creating an omnichannel strategy is to put yourself in the consumer's shoes and strive to understand how to enhance their experience.

You need to know the consumer, right?

Outline an average profile of your customers: Do you sell more to men or women? What is their age group, average income, and profession? If your store encompasses multiple categories, it is beneficial to consider this information separately for each or, at the very least, for the most significant, profitable, or those with growth potential.

For example, by prioritizing the consumer, Macy's developed an impressive omnichannel strategy. At some point, someone analyzed the numbers and realized that for every dollar invested in searches, there were an additional 6 dollars converted into sales at physical stores.

The strategy was to enhance the consumer experience, enabling online and offline elements to work together. As the Vice President of Digital Media & Multicultural Marketing herself stated:

“In the end, it is indifferent for us if the customer buys online or offline. We just want them to stick around with Macy’s!”

Rest assured that they are meticulously monitoring the purchasing journeys of their competitors to ensure that consumers have unique experiences at Macy's.

That is very good, but having knowledge about people alone is still not sufficient. The next step is to understand how they make purchases.

Uncovering the Purchase Journey of Your Consumer

You can put yourself in their shoes when you have data about your target audience. However, to identify improvement points in your Omnichannel experience, it is necessary to understand their purchase journey.

For example, in my case, I prefer not to interact with many people when making a purchase. The more digital the steps are during my buying journey, the better.

But that's me! Perhaps it is a trend for people who have a similar profile to mine and purchase the same things.

And how is your customer?

In this case, if a store knows my preferences and intends to enhance my experience, it just needs to enable me to resolve everything seamlessly, without leaving my computer or cellphone. This includes my initial price search, purchase, delivery tracking, and post-sale activities.

On the other hand, in the case of issues with payment or delivery, stores commonly offer support via telephone or chat at the moment of purchase. After all, I don't want to talk to a machine over the telephone; I want someone to resolve the problem!

Only by understanding the consumer and their purchase journey will it be possible to determine which factors would influence them to buy (or not) again from a certain store.

Numbers Are Your Friends

E-bit/Buscapé conducted an interesting survey with almost 2 thousand Brazilian online consumers (who made at least one online purchase).

From this survey, they obtained valuable information to create an omnichannel strategy. Keep up!

For example, did you know that the factor that makes the Brazilian consumer most uncomfortable with online purchases is the high shipping costs? Did you also know that a practical post-sale experience determines a consumer's decision to purchase from a particular place?

Yes, these are factors that impede the online purchasing experience.

The survey analyzes multiple essential steps in the consumer journey separately and reveals the factors that most positively and negatively influence its success.

For example, 63% of buyers appreciate a good order tracking service during the delivery step, while 61% prefer swift deliveries.

These numbers are examples based on multiple consumer profiles; therefore, they might not align with YOUR target audience. Perhaps your audience values quality more than speed!

So, the examples I just provided are a foundation for you to take the first step and conduct your survey. After all, no one but you can truly understand what your customers want the most.

Integrate Your Services

If you understand your consumer and how to enhance their purchase journey, you possess the main pillars for an omnichannel strategy.

However, a crucial element is missing, and the clue comes from the pyramid image above. So far, I’ve been discussing what distinguishes a multichannel strategy from an omnichannel strategy.

What multichannel has at its core is the integration of different services. It's the technology that will sustain your consumers' purchase journey. That's why multichannel is positioned below the pyramid: omnichannel doesn’t work without it!

So, there are two potential visions of integrations:

1 – Your Brand’s Services and Stores

In the case of physical and virtual stores, some examples of exciting services include purchasing a product through the virtual store and picking it up at the nearest physical store to save on shipping costs. This holds true even if the prices are the same in both channels because this way, the consumer can conduct their research at home and arrive at the store with their decision made.

For e-commerce businesses that operate solely through virtual stores, integration can occur between the mobile application and the website. The consumer should be able to initiate a purchase through the application and complete it on the computer. Alternatively, they can make the entire purchase on the website and use the application to track the delivery.

As described in the paragraphs above, integrating your services is relatively straightforward. You need to establish processes to keep the information updated in a shared database, ensuring that all channels (virtual and physical stores, applications, etc.) access the same base.

Generally, eCommerce APIs offer the ideal characteristics to create this structure.

But I'm not done yet; there's more!

2 – External Services

Of course, one of the main factors contributing to Macy’s strategy success lies in integrating physical stores and e-commerce channels to provide an exceptional omnichannel experience. However, payment processing solutions, order geolocation, real-time conversation chats during purchases, SMS alerts, and other features will collectively create a layer of unique digital experience for your customers.

But which of these services should you choose? Which one to deploy first?

If you've engaged in the exercise outlined in the first half of this text, you already know the answer: You can determine which eCommerce API integration to incorporate into your e-commerce platform only when you truly understand your consumer.

And this continues to be the first and most important step!

Your Customer, Your E-Commerce, and the APIs Revolution

We are in the API era. All the integrations and services mentioned, catering to successful stores and e-commerce, exist in API format.

Didn't you know?

eCommerce APIs, controlled with robust API governance, are growing in significance, much like having a website, which was once considered a luxury and later became commonplace. Similarly, social networks faced skepticism about their business effectiveness a while ago, and nowadays, it doesn't make sense for a company not to have a webpage on Facebook.

So, to recap what we've learned today:

The key to a successful omnichannel strategy is to remain focused on the customer. This involves understanding their characteristics and behavior during the purchasing process and then providing them with the best possibilities through integration platforms and channels in a transparent, simple, and efficient manner.

Easy, right?

Of course, I've touched upon several complex aspects of an omnichannel strategy. But this isn't the end! Stay with us as we continue to translate our most exciting articles!

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