Optimizing for the Omnishopper: A Tale of Two Retailers
It’s no secret that retailers were forced to enhance their e-commerce channels in the last two years. But what you may not know is that the retailers that focused solely on improving the online customer experience will actually be losing out in the long run. According to a study by Nielsen, "omnishoppers" are on the rise. Nearly 75 million U.S. households (i.e., 57 percent of all households in the country) will be omnishoppers by 2025.
Retailers need to take omnishoppers seriously, not only because of changing consumer preferences, but also because they tend to be higher quality customers than those who only shop in-store or online. Omnishoppers were found to spend 4 percent more on every shopping trip in-store and 10 percent more on every shopping trip online. Kroger even reported a 98 percent retention rate among loyal shoppers who added a digital channel to their customer journey.
Let’s take a look at how two other retailers fared after prioritizing omnishoppers.
Two Retailers That Are Proving the Value of Omnishoppers
As the retail industry shifted drastically between October 2019 and October 2021, a Birdzi study of two retail customers was conducted to determine how omnishoppers impacted top key performance indicators for the retailers. The first retailer, let’s call it "Retail Rejuvenator," saw omnishoppers double in these two years, and the second retailer, let’s call it "Savvy Seller," witnessed a similar jump in growth.
At Retail Rejuvenator, omnishoppers spent 85 percent more money than online-only shoppers and 140 percent more than in-store-only shoppers. Its omnishopping customers shopped more categories and achieved a higher average units per customer value than in-store-only and online-only shoppers combined. The frequency of omnishopper visits to Retail Rejuvenator significantly surpassed single-channel customers at two trips per week.
Similarly, at Savvy Seller, omnishoppers spent 130 percent more than online-only and in-store-only shoppers and they also made more average trips, shopped more categories, and bought a higher number of items on average than in-store-only and online-only customers combined.
At both Retail Rejuvenator and Savvy Seller, omnishoppers showed slight preference toward in-store purchases, even though they used multiple channels. Yet online basket sizes were typically higher than in-store. This further supports the argument that retailers shouldn’t just encourage one channel. Each touchpoint can fulfill different needs for a shopper.
How to Create Intriguing Omnishopper Experiences
The benefits of omnishoppers are evident from the anecdotes of the two retailers, and luckily, the experiences they offered their customers can be replicated by other companies. To engage potential new shoppers who seek an omnichannel experience or encourage existing customers to try a new channel, retailers should focus on building cross-channel loyalty. One way to do this is by applying loyalty program benefits both online and in-store. For example, a convenience retailer could offer unique discounts for items pre-ordered online along with fuel discount rewards.
Retailers can also incorporate cross-channel promotions. For instance, grocers might offer their top in-store-only shoppers an extended special trial to encourage online shopping, such as providing free curbside pickup or free home delivery. Similarly, retailers can create an inexpensive subscription service based on relevant recommendations. This program can automatically reorder repeat items for a shopper (e.g., new toothbrushes every month or a carton of eggs once every two weeks). By setting up a subscription program that's fulfilled, retailers can streamline the shopping journey and showcase the time-saving benefits of an omnichannel experience.
The Future is Omnichannel
With the potential to score tremendous lifts in major KPIs like basket size, average spend per trip and number of trips per customer, the omnishopper should be viewed as the most critical segment of a retailer’s customer base. Retailers should focus on making the omnichannel journey efficient and cost effective for shoppers, and particularly those customers who are open to new experiences. Instead of thinking of it as an either/or proposition, retailers should aim to encourage both in-store and online shopping to take advantage of the loyalty omnishoppers are willing to give.
Shekar Raman is CEO and co-founder of Birdzi, a grocery retail AI solutions company that was inspired by an idea his 11-year-old daughter had about locating products in the supermarket.
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Shekar Raman is CEO and co-founder of Birdzi, a grocery retail AI solutions company that was inspired by an idea his 11-year-old daughter had about locating products in the supermarket. He is passionate about building data-driven technologies leveraging AI and machine learning to help retailers and brands elevate the customer experience.