An integrated omnichannel strategy has to be firmly on the executive agenda – it would certainly be a concern if it isn’t already. It’s what shoppers want, with increasing numbers expecting to move seamlessly between channels as they wish. In fact, on average shoppers shop 20 times a month across 5 different channels. What’s key though is not just offering multiple channels to consumers, but joining them up for cohesive customer experience – this is the difference between a multi-channel and an omnichannel approach.
What’s more, in the present period of eroded retail margins, it’s become even more important because omnichannel customers tend to spend 2-3 times more than in-store only shoppers.
It was timely, therefore, to take part in a recent Grocer Vision webinar in partnership with Akeneo discussing this very topic, with expert participants from Akeneo, Coca-Cola Europacific Partners and IGD.
Time to execute on omnichannel
There was full agreement that omnichannel must be a strategic priority for grocers, retailers, and suppliers – but it’s moved beyond understanding its importance now to really executing on it and delivering for customers.
The challenge is, however, that many retailers are still structured as businesses around channel, with “retail” teams and “digital” teams and “store” teams for example. One of the first steps is to break out of siloed internal thinking and ensure that an omnichannel mindset is embedded across every team, function and department. The customer must be at the heart – and, increasingly, they have multi-faceted buying journeys that can start and end on any channel. Teams need to mirror that thinking and behaviour in all of their strategies.
In such an environment, grocers and retailers have to be everywhere the customer might look – large or convenience store, online, in-app and be able to interact at every point along the journey. That includes creating the linkages – for example, where a customer in-store can access the app for loyalty offers. They have to be ready for the transaction wherever and however the customer chooses to make it.
The in-store comeback
There are a couple of interesting points arising out of this, which we discussed on the panel. One of the panellists made the memorable comment that “the entry to your business is no longer the door to your store, it’s a mobile phone.” That feels true, but nevertheless it’s also true that, post-pandemic, we’re seeing something of a comeback for in-store shopping.
Retailers mustn’t lose sight of the value of the physical outlet within the omnichannel offering. There’s an opportunity to integrate more digital elements into store offerings where they add value (digital screens in stores can be personalized to the individual and display those under and over indexed items that are desired to be pushed) and to boost the experiential elements that bring the shopping experience to life. Some store space could be re-engineered for parts of the omnichannel offering such as Click & Collect.
Driving increased loyalty
A second element is loyalty and retention. The consumer wants the product at the best price and in as little time, whilst remaining as convenient as possible. Consumers tend to be brand-loyal, caring less about how the retailer is set up behind the scenes or which channel they use. In the tough conditions we’re entering retaining customers to your brand has become more important than ever. The retailers that utilise loyalty and reward schemes effectively, and especially those that make them omnichannel, can score a big advantage. For example, a large supermarket chain uses their loyalty scheme to help customers save money through exclusive discounts, and then can also use this data for insights into their customer's purchasing choices. This will then pop up in their online basket – showing that they really know the customer individually and are personalising the experience. We see another strong proposition at a rival major supermarket, whose scheme introduces an element of gamification as shoppers are given ‘missions’ to unlock rewards. It’s a great way of building engagement and enlivening the shopping experience.
Business models informed by data
But what are the key levers to execute on omnichannel? Firstly, retailers must be clear about their business model. I see three realistic choices: become a platform ecosystem connecting other businesses relevant to the consumer; a truly omnichannel player across the entire product set; or a smaller niche-focused specialist delivering through omnichannel.
Whichever business model you pursue, data is critical. The challenge used to be getting enough clean data to analyse – now it’s about making sense of the huge amounts of data available and turning it into insight for key purposes such as:
- Informing the customer experience, especially in loyalty-driving initiatives founded on personalisation and making shopping easy
- Strengthening the delivery of the customer missions a retailer chooses to serve (such as Quick Commerce)
- Guiding investment in technology to make operations more efficient where that will add most value
