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3 Challenges of Omnichannel Retail (+How to Overcome Them)

October 16, 2019

We’ve come a long way since the days when you needed to find a brick-and-mortar store in order to go shop for something.

Nowadays, whether we’re talking about consumables or items of clothing, the solution is much simpler. We can just go online, see the available inventory, pick out what we need, and add it in the cart.

Some things, however, are not as simple as that. We constantly need more and more options that fit the needs we may have at that specific point in time; more delivery options, discounts on shipping or free shipping, more payment options, and so forth.

However, the basic thing any consumer is after is a seamless experience across all devices, at any point in time. This is why apps are downloaded, promotional emails are sent, and landing page builders are created.

This is where omnichannel strategy comes into play. So, let’s see what that is, what it means to retailers all over the globe, and what challenges one could face when practicing it.

How did omnichannel retail come to be? 

At first, there was single-channel: the brick-and-mortar store or retailers would own an online store. Single-channel came with plenty of limitations, like not much flexibility, not many options, and having to actually find some time to shop. Customers began looking for more options, and, despite how convenient this model was for store owners, brands simply had to follow.

Multichannel retail meant that a brick-and-mortar store could also have an online store, which enabled customers to pick the channel they could shop from. Because online stores don’t have closing hours, this practice became more convenient, but not for as long as one would’ve liked.

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multichannel versus omnichannel


There was a basic flaw in that structure, and it was the fact that everything worked in parallel, as opposed to working in unison, resulting in situations that are very real and annoying, such as the lack of inventory or inability to deliver an order. This had to be fixed somehow, which led to omnichannel marketing.

The birth of omnichannel

In 2003, Best Buy made a move that revolutionized retail forever. The brand came up with “customer centricity,” an approach that made the customer the center of all processes, giving them the opportunity to have access to everything in real-time, whether they were in the store itself, online, or on the phone with a support representative.

Essentially, omnichannel retail is a strategy that integrates all existing channels and has them working in unison (not in parallel like in multichannel retail), creating a unified experience for the customers themselves.

Through omnichannel retail, a customer can begin their journey down the funnel on one channel and complete it on a different one. For example, they can order something online and choose to have it delivered to the brick-and-mortar store, no muss, no fuss.

More importantly, the fact that they switched through channels won’t even enter their mind. However, as enticing as this practice may be, it doesn’t come easy or without any challenges. So, let’s talk about these and how you can overcome them using simple tactics.

3 challenges of omnichannel retail 

It’s a fact that managing to juggle all the “normal stuff” in a business – such as billing, staff, and inventory – can be a stressful task. This article will get you familiar with all the usual challenges you will face and give you some tips in order to overcome them.

1. What do customers want?

It’s a known fact that customers always go down their own unique paths. Linear funnels are not always the case, and it’s not always possible to lead each customer exactly where you need them to be using one, single strategy.

As we all know, it’s much cheaper to turn a one-timer into a repeater, rather than trying to get one-timers to engage in lead generation constantly. However, you’ll need to do both of these if you want to keep your retail business up and running.

The solution? Data, data, data

You cannot even know which part of the funnel your customers are on, let alone what they need and what makes them tick-without data.

Plus, you can’t think that the only place to get data is your website – seeing as customers don’t get onto your website alone anymore.

You’ll need to gather clues and piece them together to create your omnichannel marketing strategy through any and all sources, such as in-store sources, website, browsing behavior, app, email marketing campaigns, landing page conversions, and so on. 

TIP: Learn how to create the most engaging landing page copy to make sure your your landing page is doing its job! 

We’re talking about a lot of data that needs to be segmented and grouped up into categories. Once you do that, you’ll know exactly what each customer needs, what they’ve checked out, and how to lead them to a purchase that will seem to be effortless and natural.

2. Customer engagement

Customer engagement across platforms is as important for retailers as content engagement is for Google rankings. Thus, it’s safe to say that it’s way too important to just leave it be and think that if a customer wants to engage, they’ll do it anyway.

impact of customer experience on loyaltySource

While customer satisfaction is one of the most important things you could aim for, this does not ensure loyalty. Without loyalty, checking out the graph above and taking its point into account is pretty much a moot point.

In fact, according to a study, "60 to 80 percent of customer defectors score themselves as satisfied or very satisfied on surveys preceding their defection.” This means that without engagement, you can’t expect loyalty. A customer knows very well that they can find the same product and customer experience somewhere else.

The solution? Create a strategy to lower churn rate

Study your data and use marketing automation to map out your customer’s journey. Once you do that, it’s time to re-engage them and nurture engagement.

This goes for all the omnichannel retailers out there: Understand your customers’ behavior first, and create an omnichannel strategy accordingly.

Provide a seamless experience where nobody will have to do more than tap on an icon to get connected (no friction, no entering passwords) and keep the menu they’ll need to use clean and tidy.

With a separate section – the offers section – get the incentives going for every single step they complete (data, referrals, downloading your app, etc.). Send them an email each time you have something new to offer and to promote and keep them notified via app as well.

Consumers will be able to just tap on the offers link in their menu, and you just prepare yourself for conversion rate optimization and maximum engagement!

3. Conflicts between the various channels

As mentioned before, omnichannel marketing is what came as an answer to the problems created by multichannel marketing. Some will even go so far as to claim that omnichannel is the evolution of multichannel.

However, one thing is for certain: you have a lot of channels, and the more the channels, the more the challenges. 

At the very first phase of omnichannel execution, infrastructure development of a retail business often fails to meet the goals and customers’ demands. Consequently, channel conflicts arise when inventory becomes limited, as goals are incompatible. Think of the basis of your retail store: your inventory.

If one channel has no idea what the other channel’s needs are, then you’re in for a very nasty surprise. All channels should communicate with one another, as with omnichannel marketing, the customer is supposedly in for a seamless experience.

This means prioritizing. Inventory cannot be evenly distributed. If you have 100 customers, and 80 of them are shopping in-store, what are you going to do?

The solution? Stay one step ahead of your customers

Wondering how you’re going to manage that? The answer lies in your data. Read it carefully, create and predict desires, and plan accordingly. You’ll need to be able to read your inventory in real-time, of course, in order to overcome challenges.

You can invest in an inventory management system and make sure that every channel has access to all the other channels’ data. This will ensure that everything runs smoothly and in unison, and nobody will end up saying “I had no idea,” jeopardizing your sales.

By enabling all departments to get their hands onto all the data your retail business will need, the marketing team will be able to come up with offers, the finance team will be informed about all of the expected costs, and the sales team will know exactly how many people it can sell the special offers to – especially if we’re talking about a first-come-first-served deal.

3 omnichannel retail examples

You can get some much-needed inspiration and understand exactly what you need to do with the help of three retail brands that were so good with omnichannel, that nobody else could do it the way they did – maybe you can!

Timberland

Timberland is one of those retailers that played the field in a way nobody else can.

Using cutting-edge technology, it can check out exactly what kind of products each customer has touched and checked, both through mobile devices and in-store, implementing tablets and “TouchWalls” that show online inventory only.

This allows Timberland to gather data and put some products right there in the spotlight, ultimately creating and mapping out a customer journey that will lead to endless product suggestions and a seamless experience.

Sephora

Beauty brands are the leaders in marketing, and Sephora is a pro at omnichannel experiences. This brand provides users with a complete, unique, and unified experience.

You can start from the app – it’s triggered by location. That helps users see the best in-store deals and information. Sephora stores are packed with tablets and devices where clients can “try on” various products without making a mess out of the samples and themselves (no friction).

Don’t worry about the dreaded “We’re out of stock.” Sephora isn't. The brand can just order the product for you, and you can choose whether you’ll have it shipped or you’ll pick it up from the store.

Add to that, the Sephora Black Card uses a unique point system to give offers and discounts, customized product suggestions, and a fantastic customer experience. Plus, the brand gets top levels of engagement and customer satisfaction!

Steve Madden

Talk about incentivizing engagement! Steve Madden is a retailer that focuses on footwear and has made a profit out of having customers engage with it using its uniquely-made and well-thought-of point system: The SM PASS.

By signing up, you automatically get a free two-day shipping on orders over $50, five points for each $1 you spend, more points for referrals, curated offers, and access to “secret products.”

Connect your social media, and you’ll get extra points. Enter your data for even more points. The company loves it, as it gets more insight into what customers really want, allowing it to send curated emails and specific product recommendations that customers won’t pass up!

Conclusion

Imagine a universe where you can just unlock your phone, go to your favorite app, order a purse with just a tap, choose your preferred method of payment with a second tap, go into the store, pick up your order, and get a special discount for an on-the-spot purchase, tailor-made for you.

This is what omnichannel marketing does if the strategy is executed successfully. Just make sure that your seams are not showing.

Customers nowadays don’t need to tell the same thing twice, and they expect salespeople, customer service agents, and everyone involved in the process to know all about their case and to be able to look into their records if needed. 

While making online and offline shopping work in unison may seem like a real feat, it’s worth every penny and effort.

To boost your knowledge, brush up on omnichannel marketing, whether you need a refresher or a reminder about what it entails. 

Related content: Omnichannel Marketing →

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