A successful omnichannel strategy can win loyal customers and capture lost sales, but making the shift isn’t easy.
Omnichannel retail is a highly complex operating model that requires new physical processes, new technologies, and the right IT infrastructure to support it all.
In this blog, we outline a proven roadmap that retailers and B2B companies can use to successfully implement an omnichannel strategy. By taking these steps, you can ensure your new omnichannel initiative is scalable, agile, and generates the greatest reward with the lowest risk.
What exactly is an omnichannel strategy in retail?
Omnichannel retail allows customers to use multiple channels to interact with your brand, get assistance, and buy products. Consumers love omnichannel retail because it gives them numerous ways to buy, receive, or return items. Ultimately, they can choose whichever is most convenient for them, and this means more paths to a successful sale.
You might ask, ‘How is omnichannel different from multichannel?’ After all, they seem quite similar, right?
While it’s true that multichannel retail involves selling through multiple channels, what makes omnichannel different is that it gives consumers the choice to ‘mix and match’ across channels, depending on which is easiest for them.
So, a multichannel retailer might sell items in-store and online, but only an omnichannel retailer can offer services that can cross multiple channels in a single customer experience.
Multichannel retail vs. omnichannel retail: what’s the difference?
Steps for implementing omnichannel retail
Step 1: Strategic analysis
First, analyze what the business goals are, and how these help meet the needs of the customer. This should result in a simple statement that defines the eventual goal of your omnichannel initiative, for example:
‘Seamless high-quality customer experiences that allow full access to in-store and online services regardless of touchpoint.’
The business case for omnichannel is compelling: research shows that companies with strong omnichannel customer engagement strategies retain 89% of their customers, compared to just 33% for companies with weak omnichannel approaches. Moreover, businesses employing omnichannel strategies experience 9.5% annual revenue growth, whereas those without it grow by only 3.4%. These statistics underscore why a well-defined omnichannel strategy is essential for remaining competitive in today’s retail landscape.
Step 2: Sketch out the customer journey
Next, a rough sketch of the customer’s omnichannel journey will make the full scope of your strategy clear. Start by asking questions like:
- Do you plan to handle online orders yourself, or use a third-party fulfilment partner?
- Will you ship orders from the store, or use a dedicated warehouse?
- Which online channels will you use?
- How will you handle social commerce?
These help you define the ‘what’ of your omnichannel strategy. The next stage is to map out ‘how’ to improve processes to enable this.
Step 3: Map out your primary processes
Define all the processes you need to meet your goals. Start with high-level processes first (such as ordering or returns) and then look at dependent processes with increasing levels of granularity.
Each of your channels (online store, marketplace, social media, social commerce, in-store, etc.) is a touchpoint, and you need to know what each will offer in terms of services. Then you can translate these into processes.
For example, if a customer orders an item online to pick up in store, how do you make sure it’s reserved for them?
For this, you may want to define a new process that ensures additional buffer stock, or an automated system that issues smartphone alerts so that store staff pick up the items as soon as an order is placed and triggers an automated replenishment order.
There are several ways to map out your processes, but one way is to create a schematic or spider diagram.
This can end up looking like a map of the Tokyo metro, but it will help identify all the various touchpoints and associated processes and see where there are shortfalls or conflicts.
Step 4: Define your technical requirements
Next, we develop this landscape of touchpoints and processes into a clear vision of what capabilities are needed.
These will include both ‘soft’ capabilities such as new skills, responsibilities, roles, or teams and ‘hard’ capabilities such as new equipment and IT solutions.
While new ‘soft’ requirements can adapt and evolve over time, your IT infrastructure is a solid foundation that must be precisely defined from the start.
Ask questions like:
- Which requirements are missing in your ERP?
- Will you need to migrate to a cloud-based infrastructure?
- What order management system will you use?
- Does an ecommerce management solution offer the scalability you need?
- How will you sync inventory accurately with 3PL and your own warehouses?
- Which integrations are needed?
- How will you integrate new applications or solutions?
Then, after defining which new IT capabilities are needed, you need to translate this into a ‘shopping list’ of the many different systems you need to implement, such as ecommerce platforms, inventory management and order management solutions, and integration technologies.
A major challenge many retailers face at this stage is breaking down existing data silos that prevent different systems from communicating effectively. When your POS systems, warehouse management, CRM platforms, and e-commerce channels can’t share data seamlessly, it becomes impossible to deliver the unified customer experiences that omnichannel strategies promise.
For a deeper understanding of how data silos impact your omnichannel strategy and what’s possible when you unify your data, read our blog: Breaking Down Data Silos for a Seamless Omnichannel Supply Chain.
Step 5: Define your running order
With a clear view of which technologies, systems, and integrations are needed, the next step is to define a clear sequence for what you are going to do, in order of priority.
Some advice: trying to do everything at once is a recipe for disaster. You should always start with a single high-value use case first, get it right, and then move to the next.
Step 6: Selecting technologies
Finally, select which solutions are best for your plan and decide how you intend to integrate them.
Most retailers will need to integrate new processes and applications with their existing tech stack. As this will include legacy systems and ERPs, this can be a challenge.
Most retailers will already have Point-of-Sale (POS) systems and warehouse management (WMS) systems in place, but these will now need to communicate seamlessly with webshop and marketplace backends.
You might also need to integrate your customer service solutions such as CRMs and communications technologies, and you may want to include chatbots or AI.
For all of these, you need reliable API integrations and other connectors that will perform perfectly under pressure.
What is the best integration solution for omnichannel retail?
There are two main approaches to this: custom-built integrations, and managed integrations.
You may already use a small number of custom-built integrations or standardized connectors with your existing software and hardware, so it may be tempting to continue this path.
A custom-built approach is fine for a few basic integrations but gets increasingly complex and costly with each new integration. As a result, it isn’t scalable enough to meet the complex requirements of omnichannel retail.
Instead, a managed solution such as an Integration Platform as a Service (iPaaS) offers the scalability and reliability needed. It’s especially valuable when integrating a lot of different technologies, because it helps to ensure the quality of data exchanges between a multitude of systems.
However, the chosen iPaaS solution must offer sufficient performance for your needs. For this, we recommend a reliable solution such as WSO2 or Boomi. These will have the right connectors and resources available, so you can integrate your chosen applications and legacy software easily.
Yenlo has significant experience in helping organizations collaborate more effectively through a highly integrated IT infrastructure. If you’re ready to implement a future-proof integration strategy, our integration experts can help you craft a scalable plan that matches your business needs.
