Creating an Omnichannel Customer Experience and Why Retailers Must

Omnichannel is the new retail. It means that there are no walls between brick and mortar and online, between online and social media, between social media and email and, one day very soon, between humans and the metaverse. In other words, the omnichannel customer experience creates a seamless customer journey that allows consumers to move easily among all of the channels a retailer can use to reach a purchaser.

A Digital Commerce 360 analysis of US Commerce Department data shows that consumer spending online in the US rose to $870.78 billion in 2021, up 14.2 percent from the pandemic-inflated numbers recorded in 2020. Compare the 2021 figure to pre-pandemic 2019 stats and online spending rose a whopping 50.5 percent.

Those are numbers far too big to ignore. Customer retention demands a seamless experience that allows consumers to move from in-store to online to in-app purchases with ease.

Most retailers had taken steps toward multichannel commerce — adding a website and maybe a mobile app to their retail menu — pre-pandemic. COVID forced ”traditional brick and mortar retailers with a website to accelerate their conversion to true omnichannel retail,” says InterimExecs RED Team executive, John Short.

RED Team executive Howard Meitiner, a long time retail CEO and turnaround specialist, takes that one step further.  

“Any retail brand that is not totally embracing the omni-channel existence, and all the technological advances that apply to those, is not going to be a survivor in the future. I don’t know whether it’s 18 months, two years, or five years, but the store experience will be one that is totally integrated with digital technologies of all different sorts,” he says.

Omnichannel vs. Single Channel Retail

In fact, Meitner predicts, the future of retail will not be different channels of customer engagement. Instead, it will be one integrated brand proposition.

Customer interactions will happen any way the customer desires.

Those who like personal touchpoints will have the option of going to a brick-and-mortar store and interacting with a clerk who provides a superb personalized experience.

Those who prefer a more self-service approach will dial into the metaverse, using their avatar to shop and buy, with the merch delivered to their home in as little as a few hours‘ time.

And every possible iteration between those two extremes.   

Moving Beyond Physical Stores

To accommodate this sea change, Short says retailers will need to completely restructure their businesses to merge omnichannel and brick and mortar into a single “store” concept. That will require a fully integrated single business system across sales, fulfillment, service, and support to create a consistent experience across all platforms.

It isn’t easy, as many venerable retailers have discovered.

An analysis of the 136 bankruptcies in what it calls the ”retail apocalypse” that started in 2015, tech consultant CBI Insights blames the pandemic, mounting debt, retailers’ missteps and ”lack of adaptability.” Among the iconic names: Neiman Marcus, JCPenney, and Lord & Taylor.

Other big name retailers — Target, Walmart, and Kohls top that list — have found ways to shift their strategy. They’ve expanded their digital channels, adopted ”buy online, pick up in store” and ”buy in store for delivery at home” options, added self-serve check-out and, in the case of Kohls, added a partnership with Amazon that gets customers to walk through the physical Kohls store to drop off Amazon returns.

Starting Fresh

Change is always challenging. But, says entrepreneur Philip Tadros, who co-founded several companies, including a chain of coffee shops, “People need to take a leap of faith and invest in 10 years from now, not just when it’s already proven. By then it’s too late.”

Tadros, who specializes in technology and innovation and is the founder of doejo.com, believes we are on the cusp of a revolutionary change to focus on user experience.

“Not too far from now we’re going to wear Google or Apple glasses that are connected to our payment system. And I’ll be able to look at a shirt and it’s going to tell me the price and maybe more information on it,” he says.

Already, there are Amazon supermarkets where customers walk in, choose the products they want and walk out without interacting with anyone. The purchase happens automatically via a mobile device.

Meeting Customer Needs

The key to success in retail doesn’t change with new technology: It’s still about creating a great customer experience that fits your customers.

Take Apple stores, for example. The tech giant created an in-store retail experience that “represented the culture of the organization, and the nature of the customers who were buying Apple,” says Meitner.

Ron Johnson, the brains behind the Apple stores, then took over JCPenney and tried to do the same thing without the same customer relationship.

”It was an unmitigated disaster,” Meitner says, ”because he made changes without consulting with the customer and without consulting with the staff, and without understanding who JCPenney was, what their strengths were, what their weaknesses were. They were going to be what Ron Johnson wanted them to be. And the customers said, ’No, thank you.’”

Whether retailing uses a single channel, multichannel or omnichannel approach, customer expectations must drive the marketing strategy. For example, loyal customers shopping at a Chanel boutique or a Tiffany store don’t want to interface with a digital screen. For millennials and Gen Z, however, the better customer experience may involve interacting only with a mobile app.

Mergers Ahead

Meitner believes the retail sector is ripe for more invention and creativity around mergers, acquisitions, and collaborations. He says we’ve just begun to see some of that, pointing to the 2020 acquisition of at-home fitness startup Mirror by the athleisurewear company Lululemon. The move, says Lululemon CEO Clavin McDonald, “was all about strengthening our community relationship with our guests.”

Meitner says that retailers have the opportunity to pick up other organizations at a good value and enhance their omnichannel customer experience strategy, automation, customer communication channels, and customer touchpoints.

Retail Transformation Teams

Short says retailers and ecommerce companies that lack a comprehensive omnichannel strategy and the technology to make decisions using big data, AI, and machine learning are going to struggle.

They will need new talent to lead the company on this omnichannel journey, including experts in:

• Omnichannel Marketing. This leader can help set strategy and redefine what a “store” looks like, then implement that vision across the various channels of the customer service experience. That will include understanding the number of physical stores needed, the size of those stores, the right merchandise mix, and the functionality of each retail persona, from store clerks to call centers to chatbots.
• Merchandising Mapping. This leader will analyze customer data to understand omnichannel sales, margins, and real-time inventory carrying costs, while mapping out a seamless multichannel customer experience.
• Supply Chain Re-engineering. This expert will use AI or machine learning technology that allows the retailer to reduce in-store inventory and store size without harming customer satisfaction or customer loyalty.
• Systems and Data Analytics. This technology leader will develop strategy and implement update end-to-end information systems to support omnichannel sales and experience center services.