We all know that with online sales, every second matters. It can only take a sale or two to tamper with your seller’s rating, and that every moment you are offline, your competitor is making all the sales. Naturally, selling on a massive platform like Amazon, with hundreds of thousands of sellers and millions of […]
If you’re looking to get into online retail, subscribing to an online marketplace is arguably the quickest way to do so. The market for online retail in India has grown by leaps and bounds in the past few years. In fact, this Nasscom report says that the Indian e-commerce industry will touch the $100 billion […]
OmniChannel Commerce (or OmniChannel Retail, also spelt as omni-channel) refers to the practice of selling products or services via multiple commerce touchpoints (both online and offline), while maintaining brand and customer experience consistency across all the channels. It could be relation to your branding, positioning, pricing, products and services offered, cross-promotion of offerings not present at the touchpoint at the time, communication style, merchandising and more. Since the word “Omni” literally means “every”, true omnichannel dream would be achieved when a brand is present of all the possible avenues relevant for them.
While sales are the primary outcome achieved under OmniChannel Commerce, the other equally important aspect of OmniChannel Commerce is OmniChannel Marketing. In this article we explain in detail about both the aspects of sales and marketing, the opportunity it presents, give an glimpse into what the omnichannel world looks like, finishing with the challenges and critical factors required to achieve the same. You can jump to these sections with these links:
Many businesses these days ask what is the difference between Multichannel and Omnichannel Ecommerce. Is omnichannel just a buzz word or it is actually different from MultiChannel ecommerce? Well there is a difference and let’s see what that is by first defining what multi-channel ecommerce is.
In terms of transactions here are the differences between multi-channel commerce and omnichannel ecommerce:
Multichannel ecommerce means the following for each of the mentioned seller type:
Note: For a multi-channel seller, all its stores may be operating as separate entities even though they may sport the same brand logo, one does not cross-sell the products on the other.
Omnichannel applies to a business that is ideally selling through all of the above channels and has a way to tie them all together to give a consistent experience to the customer, no matter which touchpoint they choose to interact with.
The ways to achieve omnichannel include:
While the above points talk about the transactional customer touchpoints within OmniChannel Retail, there is another component which engages and entices the customers to gain mindshare and eventually push sales – OmniChannel Marketing.
The true meaning of “omni” gets realised when a brand is truly present everywhere, not just for completing the transaction with the customer, but also to be visible and readily available for people who may be interested in information about the brands and/or its products. That’s what Omnichannel Marketing targets to achieve.
Omnichannel Marketing is being present on all the information channels that a brand’s target audience usually uses to find information, transact and to communicate with the brand before, during and after the purchase. It aims to create fans that have top-of-mind recall of the brand.
Capturing customers’ mindshare translates to having good presence on one or more of these channels:
One might think that all of this is exactly what we were doing as part of our multi-channel strategy. That would be right, however, the primary difference here is that in omnichannel scenario all these channels are seamless tied together. Let’s look at an example of how omnichannel strategy might play out for a brand by looking at a customer’s journey in the omni channel world.
In an omni-present scenario, this is what a customer’s journey of interacting with your brand might look:
Let’s assume that with respect to omnichannel retail and marketing (which is still quite new in India), India is moving to where US was couple of year ago. Hence, we looked at where US has moved to with Omnichannel over the years. According to an extensive study conducted by McKinsey and Harvard Business Review, a whopping 73% customers in the US use both online and offline mediums to interact with brands while only 7% were online only and only 20% shopped only via stores. Such omnichannel customers used various means such an mobile apps, tablets, in-store interactive catalogs, social media and price comparison sites to facilitate their buying decisions. The same study also concluded that customers using both offline and online mediums on an average spent 4% more on in-store purchases and 10% more on online purchases as opposed to the ones that operated only on one medium.
According to a Comscore study, in 2017 online users in India spent 89% of their online time on a mobile and most of that time was spent interacting with social media sites like Youtube, Whatsapp, and Facebook. These mediums have thus become a great opportunity for brands and advertisers to get audience’s mindshare, with video being a choice of format most effective.
However, it is not necessary that you be a great content creator to utilise these platforms (although that will be great). All these platforms provide a great opportunity to run paid advertising campaigns, specifically targeted to niche segments. It is imperative to leverage this opportunity as it is a highly cost-effective means of scaling sales.
The importance of ecommrece is reflected in a report on Indian Retail Industry by IBEF (Indian Brand Equity Foundation). The report quotes numbers by ASSOCHAM-Forrester study which state that the the e-commerce market in India is expected to grow at a staggering pace of 20% YoY till 2026 to become around $200 Billion market from $39 Billion in 2017. Moreover, physical store retail is pegged to grow at the same rate as online retail over the next five years. This further fortifies the fact that both strategies are equally important for a healthy competitive ecommerce strategy.
Despite the opportunity and great value of multi-pronged marketing presence, a study by E&Y on marketing trends among the large corporates discovered that only 44% of brands took a 360-degree integrate approach to marketing, incorporating offline as well as digital mediums to be truly omni-present and capturing the consumer mind share.
Last but most eye opening fact, according to an article by HBR, is that it is 5 to 25 times costlier to acquire a customer than to make an existing one spend more with you (translates to increasing the Life-Time Value). As a study by Frederick Reichheld (of Bain & Co) suggests, a 5% increase in customer retention of your customers can result in 25-95% increase in profits! With these mind-boggling numbers it becomes a no brainer to have an effective omnichannel marketing strategy that helps in the recruiting, and more importantly, retaining customers by making them brand loyalists and fans.
In a true OmniChannel environment, the entire retail organization works in concert. From merchandise planning, to assortment planning, purchasing, allocation, replenishment, and to promotions, price optimization, and event management. This significantly reduces inventory costs, and increases customer service lever at each channel to maximize gross margin.
Centralised and connected technology plays a vital role in achieving the OmniChannel dream. Since an ERP is usually the central system from which all data is consumed or generated, everything needs to be connected to it either feeding into it or feeding off it in order to keep all systems in sync.
For example, Browntape Enterprise Middleware allows connecting the ERP to online marketplaces and brand website for orders and inventory sync. It enables the brands to show the in-store inventory on online properties like their website and online marketplaces thus increasing the chances of converting sales opportunities. The middleware also allows the processing and fulfillment of orders right from the ERP itself with the help of extendible APIs or file-based protocols. These relay the information between the systems in real-time or batch mode, as preferred, which increases the effectiveness of various functions like Marketing, Analytics, Planning, Purchasing, and Accounting.
Marketing channels including social media channels should have the latest information about the best sellers and stock availability so the latest popular items can be advertised to the visitors on the website and social media alike. This ensures that marketing dollars are not spent on advertising items that may not be in stock at the time, thus losing both money and opportunity. The data gathered from the middleware into the ERP enables the brands to run campaigns based on latest data ensuring the relevance and effectiveness.
Performance campaigns such as Amazon’s CPC, Google’s Ads and Facebook Ads benefit specially from the data gathered from sales across all online and offline channels. For example, sales from the stores in a particular city in the North-West region in winters could help create and target campaigns towards customers from that region with extreme winter products, while customers from the South can be targeted with mild winter or even summer collection. Again in this scenario middleware plays the role of providing the combined online-offline picture straight from the ERP.
When we think of Omni-channel we normally think of customer transactional touchpoints like website, instore POS, marketplaces etc. While that is important, in order to deliver a good and timely experience at those customer touchpoints, it is critical that the supply chain and logistics operations under the hood are in place.
When a customer places an order for your in-store inventory that was visible online on an online marketplace, it is supremely important that the products are packed in the store, picked by the courier (self-handled or third party powered) from the store and delivered to the customer on time. For this to happen the store staff need to be alerted for the orders in time, they need to be trained with the picking and packing procedures, store staff need be sensitive to the SLAs as per customer’s expectations and the logistics partner needs to be notified about the pickup when relevant.
Same would be the case when a customer comes to return or exchange a product at the store. There needs to be a predefined counter where this is possible with a known process which makes the customer’s experience a breeze rather than an arduous one.
Browntape’s software and team of experts can equip a brand’s operations with the right technology and in-store staff training in order to achieve the above.
In the 21st century, it is imperative for brands to deliver a 21st century experience to its customers. It is evident that customers are spending a considerable amount of time on multiple digital platforms, providing a huge opportunity for brands to engage with them on multiple fronts in order to get a piece of their mind and build loyalists.
When a brand uses the right communication, provides relevant information and provides the right opportunities to close a sale with a customer at the touchpoint that they are at, that’s the essence of Omni-channel Commerce. With the use of right technology, infrastructure and strategies, a brand can successfully leverage the potential of retaining and growing their customer base exponentially, because let’s face it not every brand will be able to capitalise the opportunity. Be the brand that does! Happy sales.