3 Reasons Why Omnichannel Gives Retailers the Competitive Edge

Retailers are increasingly looking for an edge in today’s competitive marketplace. They must set themselves apart from the competition to attract and retain customers. One way they can do this is by embracing an omnichannel approach to their go-to-market retail strategy.

An omnichannel approach is a coordinated effort to provide customers with a consistent and seamless experience across all channels, including in-store, online, mobile, and social media. This strategy allows retailers to meet customers where they are and provide them with the convenience, personalized service, and consistent pricing they demand.

A well-executed omnichannel strategy can provide several benefits for retailers. Studies have shown that customers who engage with brands across multiple channels are more valuable than those who only interact with a brand on one channel. After controlling for the shopping experience, omnichannel customers spent an average of 4% more on every shopping occasion in the store and 10% more online than single-channel customers, according to the Harvard Business Review. Additionally, the shoppers spent more money in the store with every additional channel they used. For example, customers who used 4+ channels spent, on average, 9% more in the store than those who used just one channel.

Retailers who are looking to supercharge their retail strategy should consider the following three advantages for taking an omnichannel approach.

The Omnichannel Advantage

Advantage #1: Improved Customer Loyalty

Customers with a positive experience with a retailer are likelier to remain loyal to that brand. Studies have shown that even when people love a company or product, 59% will walk away after several bad experiences, and 17% will leave after just one.

Improved customer loyalty leads to increased sales and higher lifetime value for retailers. For example, one study found that loyalty program members spend an average of 10% more than non-members.

There are several ways retailers can improve customer loyalty through an omnichannel approach. These include offering loyalty rewards that can be redeemed online and in-store, providing convenient pickup and delivery options, and offering exclusive deals and promotions to loyalty members.

Advantage #2: Increased Omnichannel Sales

Omnichannel strategies can also lead to increased sales for retailers. Retailers with an omnichannel presence see an Average Order Value (AOV) 30% higher than those without an omnichannel strategy. Furthermore, retailers with an omnichannel approach see a 91% retention rate for first-time buyers, compared to just 33% for companies without an omnichannel strategy (McKinsey).

An omnichannel approach can increase retailers’ sales, including reaching more customers across multiple channels, upsell and cross-sell opportunities, and improving customer service levels.

Advantage #3: Improved Margins

Lastly, retailers who adopt an omnichannel approach also see improvements in their margins. One of the reasons is that an omnichannel strategy allows retailers to optimize their inventory management and reduce the costs associated with returns and markdowns. 

Another way that an omnichannel approach increases profits is through its pricing advantage. With improved customer loyalty and increased sales, retailers can price their items higher than competitors. According to Khoros, 68% of customers will spend more money with a brand that understands them and treats them like individuals. If a retailer is confident in their omnichannel approach, they have a greater price elasticity than their competitors selling the same goods and can increase their profit margins.

Conclusion

Adopting an omnichannel go-to-market strategy provides retailers several advantages, including improved customer loyalty, increased sales, and improved margins. Retailers with these three advantages will have a competitive edge in providing customers with the convenience, personalized service, and consistent pricing they demand.

Intrics provides insights and clarity by analyzing over 100 million price changes weekly from top retailers in every market of the United States. By considering national brands and private-label alike and linking disparate SKUs and descriptions to a single UPC, Intrics provides product-level indexes in your market. This allows you to be the first to react by quickly understanding changes to product prices, whether your competitors are absorbing or forwarding increased costs to consumers, and how your prices and price changes compare to theirs.

Sources:
https://hbr.org/2017/01/a-study-of-46000-shoppers-shows-that-omnichannel-retailing-works
https://www.pwc.com/us/en/services/consulting/library/consumer-intelligence-series/future-of-customer-experience.html
https://www.scribd.com/document/414127098/190023-LoyaltyOne-LBP-Report-Final-Apr24
https://www.invespcro.com/blog/state-of-omnichannel-shopping/
https://www.intelligencenode.com/blog/how-to-dominate-retail-with-omnichannel-pricing/