The 4 Pillars of Omnichannel Success
These days, articles about the e-commerce industry rarely begin without some reference to COVID-19 or “the events of last year.” The suddenness of the pandemic and an industry caught flat-footed delivered many lessons about being prepared for unpredictable events. Many merchants quickly learned that having an omnichannel presence can be advantageous for survival when significant segments of the commerce ecosystem unexpectedly go dark.
When shopping around the world went almost entirely online, merchants that relied heavily on physical stores weren’t the only ones scrambling to set up alternative channels for reaching consumers. Along with the rapid shift in consumer behavior, widespread impact across every aspect of how global commerce operates had merchants evaluating their sales methods and channels for how best to service customers — and omnichannel strategies moved much higher on many priority lists.
According to recent research, 46 percent of retail executives say they’ll increase investment in omnichannel, compared to their investment plans prior to COVID. While the pandemic may have been a catalyst to push omnichannel efforts forward, channel diversification and comprehensive integration of data and systems should have been on the radar for any business planning to compete in the modern retail landscape. By integrating online and offline sales channels into a cohesive experience across touchpoints, merchants will be optimized for future growth and better positioned should another unforeseen crisis unfold.
Omnichannel isn't just another way of saying that you sell in multiple channels, it’s about meeting customers where they are and delivering a consistent brand experience. Managing advertising, inventory, and fulfillment across every touchpoint can be challenging and requires a holistic approach to sales channels, marketing, operations, and fulfillment — the four pillars of omnichannel success.
A channel is anywhere your shopper interfaces with your brand, be it through ads, commerce, social commerce, marketplaces, direct to consumer (D-to-C), wholesale, or offline channels (e.g., physical storefronts, pop-ups). The goal of developing an omnichannel sales strategy is focused on identifying which channels you should be in and how to merchandise the shopper experience within that channel in order to optimize for traffic, sales, loyalty and lifetime value (LTV).
Overinvesting in one channel at the expense of all others could result in problems if that channel ever becomes unavailable. That said, adding every possible channel available in an effort to diversify isn’t an ideal solution either. Choosing the right channels for your business is the essential foundation of any strong omnichannel strategy.
There used to be a clear distinction between digital advertising channels and marketplace channels, however, the lines are blurring significantly. Google now has Buy on Google. Amazon.com is the third-largest global ads platform. Facebook has launched Facebook Shops and Instagram Shops (which can power both on-site and offsite checkout). The one constant is the fact that all these channels need the same thing: enhanced catalog/product and inventory data for the products a merchant wants to merchandise within that channel.
The right channel mix can expand customer reach, improve brand awareness and, ultimately, increase revenue. Every business is unique, as is every channel, so the channels you pursue need to be based on what you know about your target customer. Analyze your data and do the research to understand your audience, where they spend the most time (and money), and where products in your category are typically sold.
Marketing and Advertising
Regardless of which channels you're using to sell in, consumers aren’t going to find your products without a marketing strategy to drive sales. Getting in front of your audience at the right time, in the right place, with the right message can make a huge difference in the success of your omnichannel efforts. Google search and display ads are a popular place to start and play a significant role in today’s advertising landscape, however, there are a lot of additional options available.
Much like the specific channels in which you choose to sell, the key here isn’t just to diversify your marketing mix, but to invest time in creating a specific marketing and advertising strategy for each channel. Every decision you make should have a purpose, and be designed to meet the needs of the specific audience you're targeting.
The more marketing channels you add to the mix, the more complex managing campaigns and budget allocation can become. Frequent changes in regulations and changes within publishing platforms can increase the complexity. Look for automation partners available in your e-commerce platform app store. There should be plenty of helpful tools that easily integrate into your existing system, and further streamline this process for you.
From an operational perspective, the key to an efficient, end-to-end omnichannel approach is connectivity. The goal is to be able to surface products (catalog data) and the inventory (inventory data by location) available to be purchased in each sales channel, with a guarantee of when it will be delivered (e.g., two-day shipping) and how much it will cost (shipping/carrier data).
There are several technology options for greater visibility into multichannel inventory. Listings solutions or feeds automate your ability to publish products to new sales channels, optimize product content per channel, and unify order management. Inventory and order management systems help manage complex workflows around order routing, inventory, shipments, and purchasing workflows, as well as support third-party logistics solution integrations.
For even greater efficiencies, ERPs combine a number of back-office operations, like inventory and order management, shipping and fulfillment, CRM, and more, into one software solution.
Shipping and Fulfillment
Adding another sales channel is only effective if your entire operation is set up to properly support it, and this includes shipping and fulfillment. Recent ShipStation data shows that when thinking about a purchase, 84 percent of consumers say that the delivery experience stands out to them the most.
Retailers that fulfill their own orders can use shipping software to provide customers with options and calculate the best shipping parameters. Third-party logistics solutions (3PLs), like Amazon’s fulfillment services, include other logistics processes like inventory management, warehousing and fulfillment — great for retailers looking to outsource and streamline fulfillment and delivery.
A smooth, convenient customer journey converts. Expanding into new channels can be a smart decision for driving growth, but the added complexity requires a comprehensive plan that addresses every pillar involved. A unified channel strategy that considers how your customers’ needs have changed and which processes or technologies will help you meet their unique needs is the best approach for omnichannel success.
Sharon Gee is general manager of omnichannel at BigCommerce, a leading cloud platform for businesses.