What Is Omnichannel Retail?

Omnichannel retail technologies allow retailers to engage with customers through multiple digital and physical touchpoints connected into a single experience.

Increasingly, omnichannel retail is becoming the expected experience for today’s customers. Today’s shoppers use everything from traditional brick-and-mortar stores to websites, social media, and mobile apps. Customers also expect the omnichannel shopping process to address product delivery options, including buy online and pick up in store (BOPIS), curbside pickups, secure lockers, and all other touchpoints in their relationship with a retailer.

Customer data is at the center of any omnichannel retail experience. As customers move across channels, their data moves with them, creating a consistent, on-brand experience from start to finish. Brands use omnichannel strategies, such as store-as-media, to provide targeted advertising and branded content within brick-and-mortar locations, thereby increasing their reach, visibility, and impact with consumer audiences.

Using an integrated omnichannel strategy, retailers can provide hyperconvenient, personalized shopping experiences at every point in the customer journey—whether the customer is shopping online, via their mobile device, or in a store.

Omnichannel retail solutions are enabled by artificial intelligence (AI), edge compute, and advanced analytics. These technologies are making a sizable impact across premises, people, products, and processes—turning data into near-real-time insights that drive new and innovative frictionless experiences and operational efficiencies.

Omnichannel Retail vs. Multichannel Retail

Omnichannel retail and multichannel retail are similar but distinct concepts. Omnichannel retail unlocks a seamless, integrated customer experience that spans and connects several channels. On the other hand, multichannel retail operates various channels independently but with less coordination and integration. Omnichannel focuses on the customer experience and fostering frictionless engagement, while multichannel is more concerned with maximizing sales through a multitude of sales avenues.

Benefits of Omnichannel Retail

Creating a better customer experience across all channels fosters greater satisfaction and loyalty. Plus, by analyzing the customer journey, retailers can improve their marketing, merchandising, loyalty programs, and inventory management. This deeper understanding of customer behavior enables retailers to optimally dedicate resources based on customers’ fast-changing expectations.

Through an omnichannel strategy, businesses can offer personalized sales recommendations, confirm customer account information from any source where the customer has previously shared it, and further enhance the customer experience at the moment of the transaction, whether it takes place online, at a kiosk, or on a personal device. Customers gain the flexibility to interact with brands, make purchases, and receive their goods in the way that’s best for them.

For example, imagine a customer using a mobile device to search for or purchase a product. The data from that buying journey or purchase gets transmitted to the business’s systems that look for trends, patterns, behaviors, and product updates. The brand’s sales representative can then access and use the information derived from that data in near-real time through point of sale (POS) systems or other enabled devices to provide that customer with personalized upsells or promotions when they come in for order pickup. Retailers can also use data analytics to see buying trends, track product performance, and optimize sales strategies and marketing campaigns.

Challenges of Omnichannel Retail

One of the core challenges of enabling an omnichannel customer experience is technology and data integration. Retailers offer a consistent set of products and services across all channels, but few have a unified set of back-end systems.

Retailers need seamless data integration across various channels to provide the integrated and personalized experience that today’s customers want. The need for real-time inventory visibility and effective marketing attribution can add complexity to data integration.

Edge computing is a key part of extending the omnichannel model into brick-and-mortar locations. Here, retailers need ways to optimize efficiency for edge servers, kiosks, POS systems, and other devices, especially as the need for AI workloads like computer vision increases. Savvy hardware investments can help right-size compute resources to maximize cost efficiency without sacrificing performance. Simplified and centralized management for the fleet of edge devices also becomes a critical concern as edge deployments increase.

Finally, the reliance on data throughout the omnichannel experience means that retailers must navigate the complexities of consumer privacy and legal compliance while adapting to evolving shopping behaviors.

Elements of Omnichannel Retail

A unified omnichannel retail strategy provides a consistent brand experience and accurate information at every touchpoint. To create this modern, personalized, and convenient experience, retailers must bring together a wide array of systems and business practices.

Customer relationship management (CRM), order management, and inventory management systems all play an integral role in facilitating customer interactions across all touchpoints. Edge resources help connect real-time store information to online and mobile experiences. Customer behavior is translated into dynamic offers by AI and analytics tools based on how the customer interacts with different areas in store or online. Cloud and data center resources are used as needed for demanding workloads, including CRM and analytics platforms.

AI is being applied throughout the omnichannel technology landscape—from automatic checkout to sophisticated recommendation engines—to enable more efficiency, convenience, and personalization. This can also include customer-facing chatbots that can help customers find information or facilitate processes like returns, in-store pickups, or deliveries.

Examples of an Omnichannel Retail Experience

In the omnichannel model, customers can interact with brands in whatever way is most convenient for them. For example, a customer might see an online promotion, log in to a brand’s application to view their loyalty rewards status, place an order, and then retrieve their purchase from a secure locker. The customer’s information would be retained throughout the process for a seamless shopping experience across all channels.

Alternatively, a customer could do an online search and save items to a future purchase wish list. At a later date, that customer could go into the store or online purchase portal, retrieve their wish list, and buy those items using loyalty rewards points toward their purchase. Once purchased, the stock level in the supporting inventory management system and the customer’s purchase history record would be updated. With this data available in near-real time, the retailer would have an accurate picture of available inventory as well as valuable insights into customer behavior. The customer experience is seamlessly integrated and branded at all touchpoints for consistency. And the physical store becomes integrated with a digital experience from both the customer and data analytics perspectives.

A well-executed omnichannel strategy will eliminate confusing experiences that disappoint customers. For example, a customer could check the availability of a popular item on the phone, see it is available at the nearest store, and have confidence it will be in stock when they arrive for pickup.

Omnichannel Retail Use Cases

The combination of innovative hardware and software elements allows retailers to implement innovative new capabilities, such as:
 

• AI-enhanced checkout: Computer vision and machine learning automate item scanning and payment to lower queue times and improve accuracy.
• Same-day delivery: Logistics and inventory management systems connect with the online shopping experience to enable rapid delivery that helps enhance customer satisfaction and increase sales.
• Online purchase with store pickup: Integrated digital platforms and inventory management systems help lower logistics costs while enabling flexible customer interactions.
• In-store purchase with home delivery: Connected inventory management and logistics systems allow customers to have in-store purchases delivered directly to their homes.
• Real-time stock level overview: Technologies such as RFID and integrated inventory systems enable accurate, up-to-date information on product availability across all channels. Retailers can use this information to help keep key products in stock and optimize inventory levels.
• Customer insights: Data analytics and AI across various touchpoints, including in-store behavior, provide a comprehensive understanding of customer preferences and patterns. These insights allow for marketing personalization and improved customer service.

Designing the Omnichannel Experience

A successful omnichannel strategy is an ongoing journey that is regularly curated to maximize connections between various data points from customer-facing technologies, back-of-house operational systems, and supporting technology infrastructure to deliver a seamless customer experience. When data can be shared across a unified ecosystem, customers and retailers benefit.

With in-store edge computing and AI that collects, processes, and analyzes data closer to where it is generated, retailers can access near-real-time information about their customers. They also benefit from an additional layer of data security—by not sending data to a centralized data center and processing it locally at the edge, less data is at risk at the moment of transaction.

With intelligence from edge to cloud, retailers can parlay insights from deeper customer and merchandising data analytics to understand long-term trends, inform targeted campaigns, and predict the future.

Together, these integrated technology solutions make the omnichannel experience not only possible but seamless.

The Future of Omnichannel Retail

Optimizing customer engagement and experiences across channels is an ongoing effort. Customers expect convenience, meaning digital experiences must have smooth interchanges and integrate well with in-store operations.

Given the recent changes in buyer behavior, customers may expect that convenience means they don’t have to go to a store. If customers do need to go to a store, they will want a meaningful reason, such as an experience they cannot get online or one that starts online and is completed in the physical location. Consequently, merchants will need to design unique, thoughtful buying experiences that are personalized to their customers’ wants and needs.

Additionally, AI will play an important role in the future of omnichannel retail. As retail AI solutions and the compute resources that support them continue to evolve, they’ll enable even deeper levels of personalization, efficiency, and automation across the omnichannel model. This will result in higher customer satisfaction levels while helping retailers reduce shrink and increase ROI.

Because retail is a fiercely competitive industry, frictionless customer service and rising levels of operational efficiency will remain essential to sustaining growth. AI-enhanced solutions will help businesses achieve these goals as they reshape and unify the retail experience.