What is Omni-channel? The Advantages, Disadvantages, and Pitfalls

You’ve probably heard of the term omni-channel before, but what does it mean exactly? And how is it different than multi-channel? In this article, you will read about the advantages, disadvantages, pitfalls and a step-by-step plan for implementing your omni-channel strategy.

Omni-channel

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What is omni-channel?

An omni-channel experience refers to an integrated, well-structured and consistent customer experience throughout all the possible channels that a customer engages with.

In other words, it means that no matter how a customer interacts with your brand (physical shop, website, app, etc.), the experience is very consistent.

In essence, the omni-channel strategy takes the multi-channel experience once step further.

Multi-channel vs omni-channel

With the multi-channel experience, customers can choose between a few channels that are not directly aligned with each other. The company decides for the customer which channel best suits the customer experience.

Omni-channel, on the other hand, allows the customer to use many different channels that are well coordinated. Here, the customer decides what channel to use. They revolve around the customer and they can, therefore, choose their preference.

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As multi-channel and omni-channel are very similar, it can be a bit unclear what the differences are. To emphasize the difference between the two, let’s look at an example for each.

The idea of omni-channel retail is that the customer is the centre and can choose which channels and media they want to use. This applies in B2C as well as in B2B.

All the information about the product is the same throughout the channels: whether in the physical store, the online shop, app or advertisement. The customer has the possibility to pick up the product in the store, order it to the store, or have it delivered to their home. Returns and payment options should also be the same everywhere.

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At the end of the day, the customer should be able to visit any channel (or multiple channels) and the information and experiences should be fluid and consistent.

Multi-channel example

A customer wants to buy a pair of trousers online and uses the app on their phone to have a look at the online shop. They decide they want additional information, so they go to the website. However, the price there is different than in the app.

Another example would be if the customer decides to go to the physical shop, the same price as in the app is offered. However, if they want to return the trousers, the conditions are different than in the app.

Omni-channel example

The customer who wants to buy trousers sees an advertisement on Facebook for them. They click on the ad and end up in the online shop.

The customer can immediately say whether they want to pick up the trousers in the shop or have it delivered to their home. The return options are also directly pointed out. Through a chat function in the app, they can ask questions about the product and find the same information again.

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The bottom line is that the customer should have an extremely smooth interaction with your physical and online shop, as the same information is displayed everywhere.

Nowadays, customers no longer see a channel or medium, but they see the brand or company they are in contact with. All (social) media channels overlap so that the consumer no longer distinguishes between the different channels. As a shop owner, this is what you should be aiming for.

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The advantages of omni-channel

It takes a lot of time and effort to set up an omni-channel experience, but is it worth it? Here are some advantages of the omni-channel strategy.

Customer satisfaction is higher

If the right channels are used for the right target group, consumers can use the channel they prefer. In addition, the physical and online presence of your brand gives your company a “face” and creates consumer confidence.

This gives the customer a deeper connection with the brand and therefore ensures that the customers remain loyal to your shop. Keeping existing customers is always easier and cheaper (and therefore, more efficient!) than attracting new customers.

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Companies with a strong omni-channel strategy retain an average of 89% of their customers. The average customer retention rate is 39%, so that is a significant increase.

A survey by Accenture shows that 75% of B2B customers will make a follow-up purchase from the same provider if it performs well in omni-channel.

Time-saving

Customers can go to the physical store with their products that they purchased online and also return them there. In many cases, this saves time for the customer, who does not have to wait for the new product.

This flexibility will add to customer satisfaction and can also help boost sales as foot traffic to your physical shop increases.

Conversions increase

Because the product information is displayed throughout multiple channels, consumers are more inclined to actually buy the product. This gives the customer a certain feeling of trust as every channel can be used.

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Disadvantages of omni-channel

To give you a clear overview of the omni-channel strategy, we should also look at a number of disadvantages that you have to take into account if you’re considering implementing this strategy at your company.

Mobile phone threat

The mobile phone is still often seen as a threat to shop owners. A lot of work is done on showrooming which means that the customer will look at the product in the physical shop and then search for it online to maybe find it at a lower price.

This can be detrimental to your physical shop. Try to reverse this mobile phone trend so it becomes a positive medium for you, for example, by adding QR codes to your shelves and shop windows. This way, these shoppers are sent directly to your website and don’t end up somewhere else while standing in your shop.

using a smartphone

Change organisational structure

Implementing an omni-channel strategy means that you will have to make some changes within your organisational structure.

Most companies have a traditional marketing department and a separate online marketing department. Similarly, your mobile support may come from the development department rather than the customer support team.

Working this way within your company is difficult if you want to implement an omni-channel retail strategy.

It often happens that these departments work separately from each other and therefore the different channels stand alone (this would be a multi-channel experience and not omni-channel).

A better solution would be to have a branding team that takes care of all offline and online branding and positioning. In addition to that, there should be a sales team that is responsible for the customer journey and the coordination of the different channels. The disadvantage of this is that you have to make room for it and invest time and money in it.

Starting with omni-channel

Now that you know the important things about omni-channel retail, all you have to do is start with it!

But how do you do that? We’ll show you how to do this in a few steps.

#1 Set goals

Implementing an omni-channel strategy can’t be done overnight, so set small goals. Make these goals specific and measurable so you can always see how close you are to reaching the ultimate goal.

#2 Know your customer

Omni-channel retail only works really well when you know who to focus on. Find out who your target group is and where they are located. Create a customer persona to help you. When you really know who your customer is, you can make the customer journey more personal and customer-oriented. 

#3 Map out the customer journey

Now that you know who your potential customers are, it is important to map out the customer journey. What is the route taken by consumers before they buy something from your shop? And what channels do they use to do so? Is the journey too long or confusing? Are shoppers cancelling their orders more often on one particular page? 

#4 Setting up and using channels

Determine which channels you want to implement and set them up in such a way that they appeal to the target group.

#5 Optimising and developing

Now that everything is up and running, it is important to continue to measure and develop the result. You have to keep up with the market and make sure you stay up-to-date.

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Some quick tips to apply omni-channel to your physical shop:

#1 – QR codes on the shelves and shop windows

#2 – Virtual shop at the physical location

#3 – Mobile app

#4 – Show quality marks/trustmarks and ratings on all channels

Pitfalls of omni-channel

Now that you know what omni-channel is and how to get it started with your online shop, it is important to know some of the pitfalls before you start implementing your new strategy. Take the time to set up each relevant channel properly, so you get the best results.

  • Don’t forget to make each channel mobile responsive. Nowadays, mobile phones play an important role in the e-commerce world and you don’t want to be left behind.

  • Don’t focus on all the channels that exist. Many companies think it’s good to be available on as many channels as possible. However, this is not the case. Find out where your potential customers are and focus on those channels that are important to them.

  • If you have a physical store alongside your online shop, there is a danger that the offline experience will become neglected. Keep in mind that your physical store is also a part of omni-channel retail.

Conclusion

In an era where offline and online worlds merge, customers are looking for an experience where these two worlds work flawlessly together. The omni-channel experience offers the customer a smooth, personalised experience that ensures more customer loyalty and higher conversions.

Although it may take a lot of time and effort to make your brand completely omni-channel, it’s definitely worth it.

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