An Omni-Channel Commerce Solution: The What, Why, and How of Retail’s Future

An Omni-Channel Commerce Solution: The What, Why, and How of Retail’s Future

2017 cast a dark cloud over the future of retail. Fanatical headlines proclaiming the death of retail were — and still are — everywhere. 

Major retailers like JCPenney, Macy’s, and Sears reported steadily declining holiday sales and massive store closures. Worse, Credit Suisse forecasts that 25% of U.S. malls will close in the next five years, a statistic that translates into “275 shopping centers.”

Here’s the twist …

As a whole, retail sales are increasing. In fact, global projections expect the total retail market to reach nearly $28 trillion by 2020.

Total Retail Sales Worldwide 2016-2020

So, what’s the disconnect?

TL;DR

This article answers three questions for the future of retail.

While the first two focus on data and examples of omni-channel commerce, the final section examines four ingredients crucial to your platform selection:

  1. What Is an Omni-Channel Commerce Solution?
  2. Why Invest in an Omni-Channel Commerce Solution?
  3. How to Pick an Omni-Channel Commerce Solution?

What Is an Omni-Channel Commerce Solution?

Omni-channel commerce is a fully-integrated approach to sales and marketing that gives shoppers a unified experience across online and offline channels.

Omni-channel commerce solutions extend from brick-and-mortar to online stores and encompass …

  • Ecommerce marketplaces
  • Mobile websites and applications
  • Social marketing, retargeting, and sales
  • Messaging and SMS
  • Deeply personalized email marketing
  • And everything in between

Omni-channel commerce solution in action

The aim is to bring together all these features — including, multi-channel listing, POS integration, and inventory management — to provide customers with a single buyer’s journey from platform to platform.

Even more importantly, they allow companies to connect and overlap each channels’ data for a seamless view of the customer themselves.

Without a true omni-channel solution, companies are left with no way to translate data from in-store purchases to online retention to marketing efforts and back again.

Definitions, however, are one thing. What does this look like in practice?

For years, Rebecca Minkoff has been at the burgeoning forefront of technology and fashion.

The company’s “connected stores” bridge the gap between online-to-offline (O2O) commerce. To start, smart fitting rooms allow customers to try on clothes in-store, add items to their virtual cart, find sizes and variants (like color) not on-hand, and then execute mixed physical-and-digital purchases.

Rebecca Minkoff’s “connected stores” bridge the gap between online-to-offline (O2O) commerce with omni-channel technology like point-of-sale integration

But it is more than just buying. Minkoff also harnesses that data and connects it to additional customer devices and touchpoints, like their website.

Every aspect of the store is connected through their POS, inventory management, and multi-channel listings

On top of that, with direct SMS marketing, those same shoppers can sign up for text message alerts, linking their phone number directly to their online profile (normally enabled solely by email).

This — along with POS integrating and multi-channel listing — allows Minkoff to give each user a continuous experience.

Minkoff gives each user the same omni-channel commerce experience from in-store trying to online buying

"The new definition for luxury," says Emily Culp, SVP of Commerce and Omni-Channel Marketing at Rebecca Minkoff, "is being able to be empowered to select the service level that she wants, when she wants, on the device that she wants."

Utilizing an omni-channel commerce solution, they’ve been able to accomplish exactly that. Within the first five months of launching these connected stores, Minkoff increased sales by 6-7x.

But, is Minkoff the outlier? Hardly …

Why Invest in an Omni-Channel Commerce Solution?

With the current barrage of retail store closures, it’s easy to paint retail in a negative light. Rising online purchase rates lay behind the so-called “inevitability” of retail’s demise.

The problem, however, isn’t rooted in retail shopping.

With global retail sales projected to hit $27.73 trillion in 2020, the problem is that companies are struggling to keep up with changing consumer behavior. Adaptation has been too slow and unable to meet the customer’s growing demand that won’t accept lackluster experiences.

According to the Periscope Research, 78% of retailers admit that they don’t give consumers a “unified brand experience.”

Common reasons for this lack of brand transcendence include struggles with:

  1. Internal organization
  2. Customer analytics
  3. Data sharing and alignment
  4. Siloed departments
  5. Identifying shoppers across channels

Lack of brand unity is particularly disconcerting because 31% of people use five or more devices to connect to other humans, businesses, and experiences:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

The desire to be connected — to experience a brand and not just buy from it — is why omni-channel retailing is necessary for any company seeking to avoid retail’s grim outlook.

Consider, for instance, Jordan Brand, Snapchat, and Shopify’s recent collaboration to drop the limited-edition Air Jordan III ‘Tinker’ during NBA All-Star 2018 weekend:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

The omni-channel drop worked like this …

Snapcodes were displayed at 935 San Julian Street in Los Angeles where in-person fans got exclusive and early access. The codes unlocked an in-app commerce experience and purchases were delivered the same day to select addresses through local fulfillment centers run by Darkstore.

“When we look at doing digital marketing,” Dan Harbison, Global Sr. Director of Digital at Jordan Brand, told Fast Company, “we really want to make sure we engage the community with something the consumer has never seen before.”

“[A]ugmented reality, mixed reality, and virtual reality have been out there for a couple years. But we wanted to make sure we did it with purpose and did it meaningfully.”

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

Illustrative examples aside, big-picture data confirms that omni-channel commerce works.

According to the Harvard Business Review, among 46,000 participants of a recent study:

“Only 7% were online-only shoppers and 20% were store-only shoppers. The remaining majority, or 73%, used multiple channels during their shopping journey.

“In addition to having bigger shopping baskets, omnichannel shoppers were also more loyal.

“Within six months after an omnichannel shopping experience, these customers had logged 23% more repeat shopping trips to the retailer’s stores and were more likely to recommend the brand to family and friends than those who used a single channel.”

An IDC report found that retailers using omni-channel commerce solutions saw a 15-25% increase in average order values, 5-10% increases in customer profitability, and 30% higher customer lifetime value.

This can be seen everywhere in retailers who are succeeding.

Amidst doomsday headlines, Ulta Beauty drove $4.85 billion in revenue in 2017, up from $3.9 billion in 2016. How? Michelle Pacynski, VP of Ecommerce at Ulta Beauty, explains:

“A key objective for guest-facing systems is to drive a consistent experience regardless of the way she wants to shop. So whether that’s in store, in our mobile apps, or online, we feel that we can provide a single brand experience across all channels.”

Ulta was able to thrive by incorporating an omni-channel commerce solution that bridged the growing gap between offline and online that other retailers couldn’t. With their mobile app, users can now browse in store and scan items using the Ulta app to pull up online reviews of satisfied customers.

Ulta was able to avoid doomsday-esque scenarios by incorporating an omni-channel commerce solution that bridged the growing gap between offline and online that other retailers couldn’t

Companies like Ulta are thriving in a market that many other giant retailers are sinking in. Omni-channel commerce solutions provide a way forward for retail that matches the needs of consumers in the modern world.

How to Pick an Omni-Channel Commerce Solution?

(1) Multi-Channel Listing

Multi-channel listing and selling is a key ingredient in any successful omni-channel strategy. In essence, multi-channel ecommerce is about giving customers a choice in where they purchase:

A multi-channel ecommerce strategy acts as a hub around which all your channels orbit

Multi-channel ecommerce creates natural buying paths offsite
Shopify Flow

Are you selling everywhere your customers buy?

If you’d like an executive summary, download The Enterprise Guide to Multi-Channel Ecommerce.

Inside, you’ll get one-pagers detailing …

  • Comprehensive data on the opportunities and threats
  • Merchant spotlights for insights on top channels
  • A checklist for selecting the right multi-channel platform

Access the guide today

LeSportsac — a global lifestyle brand of casual nylon bags — is a shining example …

Late last year, LeSportsac’s decision to exit 670 Macy’s stores made big waves in fashion. However, far from moving away from physical retail, the exit represented a decidedly multi-channel shift.

When asked about the decision, LeSportsac’s president Hiroaki Oura answered, “Purely [because] we are focusing our own operated business.”

As Forbes reported:

“LeSportsac is following in the footsteps of Coach, Michael Kors and Kenneth Cole, which have either dramatically reduced their department store presence or, as in Kenneth Cole’s case, closed all of its namesake stores, which were mostly outlets (save for two locations) in a bid to expand its full-price and online retail footprint internationally.”

A cursory survey of LeSportsac’s sales and marketing presence reveals …

(1) Multiple online stores based on geographic regions:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

(2) Mobile-optimized onsite checkout using Shopify’s two-factor authentication:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

(3) Marketplaces like Amazon and eBags:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

(4) A native Facebook shop that lists and sells products directly within the platform:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

(5) Shopping on Instagram for native product tagging:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

(6) And, of course, physical retail locations across nine separate countries:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

But, multi-channel isn’t an end in itself.

It’s a piece of the omni-channel puzzle. Without an omni-channel focus, consumers would normally browse in-store but have to “reset” their journey on other channels. They would have to search through your site to find the same items they just spent hours looking at in-store.

Each experience without omni-channel integration forces a consumer to effectively start from scratch, killing any conversion momentum you built through other channels.

(2) Point-of-Sale Integration

Point-of-sale (POS) integration is at the heart of a powerful omni-channel commerce solution. Utilizing technology that allows companies to collect user information directly at the POS makes it easier to sell products and accept payments on any channel.

Bonobos’ Guideshops enable sales reps at the store to bring the POS system with them on iPads, storing and logging customer data as they try on new clothes. That data then gets routed to the customer’s individual login online.

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

Similarly, UNTUCKit recently partnered with SATO Global Solutions to bring “Smart Fitting Room” experiences that will use direct POS integrations to sell and collect data for each customer:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

The POS system enables easier, faster selling with the added benefits of a synced user experience across channels.

Perhaps one of the most ingenious uses of physical-meets-online comes from The Oil Tree.

After enlisting the help of Shopify Plus Partner Rehash, the high-end olive oil and vinegar seller modified two iPads in their retail location to showcase individual products and recipes — essentially blog posts attached via metafields.

As Rehash’s co-founder and creative director, Andrew Johnson, told me:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

“We created a reduced version of their existing custom Shopify theme that fit the dimensions of the iPad Pro and augmented it with the necessary products, content, and promotions.

“The experience needed to feel like a native app.

“Using a few special meta tags, we were able to hide the browser and define loading images and icons to save the modified website to the home screen of each device. 

“Built-in access features on the iPads restricted use to The Oil Tree website and let in-store customers browse as well as email themselves details and recipes, thus entering The Oil Tree’s online funnel.”

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

In addition to these use cases, the Shopify POS can harness omni-channel solutions by tracking and managing inventory as well as syncing physical purchases with your ecommerce backend:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

(3) Inventory Management

When it comes to omni-channel commerce, inventory management is critical. If someone wants to purchase on Facebook or through a retail location, inventory levels have to also be updated onsite and across your backend systems.

Given how sensitive and complicated logistic issues are, we’ve covered a host of tools in previous articles:

Here, we’ll focus on just two platforms for inventory …

First, using Stitch Labs and Shopify, you can automatically sync inventory and order in real-time across every channel you manage.

Using Stitch Labs and Shopify, you can automatically sync inventory and order in real-time across every channel you manage

This includes both online and offline sales channels from social to mobile apps as well as third-party marketplaces like Amazon and eBay. No matter where the customer purchases or wants to purchase, your inventory will sync.

Evy’s Tree currently manages inventory across channels with Stitch Labs:

“Having inventory management helps us focus on revenue opportunities and prevents overselling. Many customers have waited weeks to receive their hoodie so it’s a really important model for maintaining your customers’ trust.”

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

Tools like Stitch Labs can also sync orders, warehouses, shipping, and more for real-time data:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

Second, on the fulfillment front, ShipHero integrates directly with Shopify to offer diverse omni-channel solutions, like easy mobile order management that links specific SKUs and purchases to a customer profile, allowing customers to see their previous order history on any touchpoint.

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

Depending on your size and budget, a holistic solution — combining these elements — may lie in enterprise resource planning (ERP) software. ERPs are typically deployed in one of three forms:

  1. ERP as a system or single solution relied upon for all of an organization’s software needs
  2. ERP as a supplement that may be integrated with existing software or tools
  3. ERP as modules used for mission-critical business functions but also integrated with existing software that may be separate or possess a different level of sophistication or focus

You can more fully examine the role of ERPs here: Why Selecting ERP Software Is Like Getting Married and How to Pick the Right One For You.

(4) Marketing Integration

A consumer’s overall omni-channel experience has to transcend each individual platform. Outfits examined in store should directly translate back to the user’s mobile app and online shopping cart.

According to a DigitalCommerce360 study, companies that integrate marketing between each channel retains an average of 89% of their customers from channel to channel.

Meanwhile, those with weak marketing integration only retain 33%.

This level of offline to online integration is exactly what an omni-channel commerce solution should contain.

With a growing amount of users inspecting products in-store using their phone, this meets consumer demand and allows for a seamless experience between channels.

BounceX is a near omni-channel solution that uses behavioral marketing to track each user, utilizing the data collected to inform the next step on a different channel.

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

Someone browsing a shoe on your website wouldn’t only be shown the right retargeted ad offsite but also be given a shoe-based experience the next time they arrive. What’s more — after an email address is captured through targeted onsite overlays and CTAs — that unique identifier can then be used to track and automatically customize onsite and offsite advertising.

Omni-channel should also excel at retention. After all, the goal is to create seamless experiences before and after purchase.

Optimove utilizes customer data like browsing history and interests to automate campaigns across multiple channels. Optimove will collect user data on product preference and then communicate that to SMS, Facebook, and email campaigns to continue the user journey:

An Omni-Channel Commerce Solution: The What Why And How Of Retails Future

Users can find their specific products from one step to the next without feeling like each channel is a separate experience, but rather, one continuous journey.

Final Thoughts on Your Omni-Channel Commerce Solution

Retail isn’t dead. Rather, old strategies are simply failing to capture interest.

While media portraits of retail sound dreary, thinking one level deeper makes opportunities apparent and paints a positive picture of the future …

Omni-channel solutions are proven technologies that utilize multi-channel listings, POS integration, inventory management, and diverse marketing software to seamlessly transmit customer data to each step of their buying process.

With retail speculations trending negatively, omni-channel commerce solutions offer hope for the connected future.

About the Author

Aaron Orendorff is the Editor in Chief of Shopify Plus as well as a regular contributor to sites like Mashable, Lifehacker, Entrepreneur, Business Insider, Fast Company, The Huffington Post and more. You can connect with him on Twitter or LinkedIn.

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