Omnichannel business structure – what is it and why is it important?
‘Omnichannel’ is a buzzword that has gained huge traction in the last 5 years. Everyone in the retail industry is talking about it and everyone is expected to be doing it. There are varying definitions, but essentially an organization with an omnichannel business structure is operating across multiple (or all) channels, providing customers with a consistent and seamless experience no matter where they’re shopping; whether it’s bricks and mortars stores, telephone, or e-commerce.1 Why is it so important to be doing this though?
Why should you use an Omnichannel business structure?
From a customer perspective, the appeal of an omnichannel model is the satisfaction and flexibility it gives, so they can embark on their shopping experience however they prefer. From the retailer’s perspective, it broadens their reach. No one customer is the same, which was illustrated in the 2017 PwC Global Total Retail report. In Canada specifically:
- 38% of respondents start product searches at Amazon
- 4% buy products at least monthly via mobile/smartphone devices.
- 26% think mobile sites aren’t easy to use.2
Having an omnichannel structure allows customers to research and purchase items however they’re comfortable. Some customers might prefer researching products on Amazon and purchasing at bricks and mortars stores, whereas others want to see items in person and purchase them online for easy delivery. The benefit of an omnichannel strategy is that it provides customers with a consistent experience no matter how they shop. Customers are regularly engaging in multiple channels as a part of their retail experience, so making your products available across multiple channels should be beneficial. Simply adopting an omnichannel business structure isn’t the end game though, it’s the strong start.
You need More than just an Omnichannel Strategy
Operating in multiple channels is great, but you have to make sure that you’re still differentiating your product and giving customers exceptional customer service across all channels. When trying to execute an omnichannel strategy many businesses pour so much focus into being available across all channels and not enough into product differentiation. Brands end up blending together and lacking a competitive edge, canceling out the benefits that an omnichannel strategy has to offer.
As mentioned in a recent Forbes article, “undifferentiated product, less than remarkable customer service and uncompetitive pricing aren’t helped by extending their reach”3. While retailers should invest in an omnichannel strategy, focus on differentiating their products and offering exceptional customer service to draw customers in should remain just as much of a priority. 2
Tackling the challenges surrounding Omnichannel
Executing an omnichannel strategy has its challenges, with 30% of retailers reporting budget constraints as their greatest challenge to providing an omnichannel experience. Next to that, 21% reported having too many legacy systems to change and 20% reported integrating with existing systems as their greatest challenge. Working with a solutions provider that is an expert in the retail industry is a key factor to overcoming these challenges and developing a successful omnichannel strategy.
The combination of Enterprise Resource Planning (ERP) software, such as Sage X3 (formerly Sage Enterprise Management) or Acumatica, and complementary solutions such as XM Developments for eCommerce or Amazon Webstore, enables organizations to make an omnichannel strategy a reality, in one robust and integrated solution. This eases tasks such as managing inventory across channels, ordering, and automating customer communication. The backing of an expert solutions partner will ensure that potential pitfalls are being considered, opportunities for even greater ROI are being taken advantage of and various channels are being set up to run seamlessly.
Should an omnichannel strategy be something a retail organization is doing? Ideally yes, but if it’s not than it should be something factored into the future plans. It’s important not be deterred by the challenges posed by an omnichannel strategy because avoiding it could also be avoiding the opportunity to reach more customers.