5 minute read
The retail industry has been buzzing about omnichannel retailing for quite some time now, but what does it really mean to be an omnichannel retailer? In Part 1 of our Omnichannel Strategy Series, we took a look at omnichannel as a concept. Today, we dive a little deeper and get to the crux of what really powers the best omnichannel strategies: meaningful data.
Part 2: Integrating Data and Insights
While it’s all well and good to have multiple channels that shoppers can use, the real value of omnichannel retailing comes from integrating data and insights across channels.
This is where things can get tough for businesses. It requires eliminating not only the silos that separate your digital from physical channels but also the ones that separate different departments. Sales and marketing, for example, need a constant exchange of information so that the latest and most relevant data is available.
The most obvious place to start integrating data is with your digital channels, such as your website, social media, and mobile app.
In an effective omnichannel strategy, data is shared across all channels to ensure a seamless shopping experience regardless of which channel is being used. And it’s not just shopper data that needs to be integrated. Company data regarding inventory and pricing requires cross-channel integration so that shoppers aren’t hit with one price when they’re online but another when they’re in-store.
So when someone makes a purchase on mobile, the inventory needs to be updated across all channels. Or when a price is adjusted, it is consistent across all channels. Or if a shopper buys in-app, the product recommendations are based on purchase history regardless of which channel those purchases occurred on.
This is much easier said than done. Achieving this level of integration requires a single IT backbone that spans the entire company and is integrated into each channel. Enterprise Resource Planning, or ERP systems are the prime example of this as they allow companies to integrate numerous departments and functions under one comprehensive and holistic view. The challenge being that investing and implementing an ERP system can run you anywhere from $100,000 to $100,000,000 and for the latter end of the spectrum, it’s a multi-year process.
Fortunately for all the small-to-medium sized businesses out there, new technology is rapidly giving smaller companies the ability to continuously engage with their customers no matter where they are and provide a omnichannel-like experience without the same level of investment. For example, Lightspeed has an omnichannel solution that retailers can use to connect online and in-store data and create one continuous, cross-channel shopping experience.
Integrating in-store data with digital data is where things get tricky.
While many businesses look at their physical and digital channels as distinct, shoppers don’t see it that way. This has lead a number of retailers to develop creative ways to blur the separation of digital and physical.
One of the most prominent examples of this is with buy online and pick up (or return) in-store. Click-and-collect as a fulfillment strategy is a fairly recent progression, but it has already made a significant impact on numerous retailers. More than 50% of Walmart’s and 40% of Best Buy’s online sales are picked up in-store.
As you can perhaps imagine this creates additional challenges surrounding inventory management. It’s already hard enough for retailers to update their inventory levels across online channels when a product is sold, but adding physical channels as well is a real challenge.
But this step can’t be overlooked. If shoppers expect the ability to do their research online but buy in-store, then your online channels need to reflect brick-and-mortar inventory levels. Imagine researching a product at home with the intention of buying it in store, only to get there and find out that the store is out of stock. That’s just frustrating.
Once you have customers using a handful of channels to research products or make purchases, the challenge then becomes knowing which channels are responsible for driving revenue. If a customer first sees a product in a Facebook ad, which directs them to the company website, and that customer ultimately makes an in-store purchase, which channel gets the credit for that revenue? Or should it be all three?
Facebook is hoping to make this step easier for retailers with their new tool that helps track if Facebook ads lead to in-store visits. From there, Facebook’s Offline Conversion API allows retailers to connect in-store transaction data to which Facebook ad got them in-store.
Google is also doing their part to make multi-channel attribution more accessible. Not only does Google Analytics have multichannel attribution functionality built right in to it, but it can even help you track in-store conversions. By connecting an AdWords account with a Google My Business account, retailers that have a sufficiently large amount of online and in-store traffic can begin to collect anonymous, aggregated data about in-store conversions.
Next week we will continue the conversation about omnichannel, touching on the customer experience and how multiple channels can aid in customer acquisition.