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Shops of the future, what omnichannel is, and why it is strategic for detail

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With the advent of e-commerce, the shopping experience has changed. One of the most interesting trends is omnichannel: the buyer can have the same online and offline experience on all touchpoints without interruptions. Details and case studies here, from Starbucks to Disney. The acceleration in 2020, the data for 2021 and 2022.

Omnichannel is a concept that has become increasingly important in the retail world in recent years. In 2020 it took on further importance thanks to the push towards digitization caused by the pandemic and in 2021 the trend was confirmed. Yet, as the Omnichannel Customer Experience Observatory points out, in 2022 only 6% of large companies in Italy still have a truly advanced approach to omnichannel and 22% are taking their first steps. To date, in Italy, multi-channel consumers – i.e. users who use eCommerce services or for whom digital plays a role in their purchasing process – number around 46.1 million, equal to 88% of the Italian population aged over 14 (52.6 million).

But what does omnichannel really mean?

Omnichannel: contamination between physical and online

Only a few years ago, to buy something, we went to the physical store, looked for it, evaluated it, compared it, and eventually bought it. Digital transformation has also overwhelmed the shopping experience, transforming it into something different, more articulated, and more complex, even if, in a certain sense, even more fascinating. With the advent of e-commerce, users began to buy online, but the “contaminations” soon began: some go to the physical store, examine and try the products, but then buy them on the web; others collect information online, after which they prefer to finalize the purchase in-store. The combinations can be many. Consequently, the retailers had to adapt, and first of all, they had to change their mentality, to then start proposing solutions capable of adapting to this new type of buyer who moves quickly, easily, and frequently between online and offline. To identify these trends, some terms have been coined:  multichannel (or multiple touchpoint approach), cross-channel, and omnichannel.

It allows the sending of promotional communications concerning the products and services of third parties with respect to the Joint Controllers who belong to the manufacturing, services (in particular ICT), and commerce branch, with automated and traditional contact methods by the third parties themselves, to whom the data is communicated.

2020 has led to a decisive change of pace towards omnichannel strategies by companies, notes the fourth edition of the Omnichannel Customer Experience Observatory promoted by the School of Management of the Milan Polytechnic. In the year of the pandemic, with the inevitable acceleration in the use of digital technology also in purchasing,  more than 8 out of 10 companies have adopted an explicit and structured governance model to implement omnichannel strategies. At the same time, however, underlines the Observatory, there are still too few companies that have a mature approach to omnichannel capable of generating significant impacts on DarkComet 

 company performance.

But in the meantime, let’s try to better understand what omnichannel means in order to be able to have a vision of the shops of the future.

RETAIL 4.0, THE SCENARIO

The digital revolution has forever changed the way people shop. The growing diffusion of smartphones, tablets, and wearables has generated new shopping habits on the move. Traffic in physical stores has been declining for years, by an average of 5%, a seemingly irreversible trend.

30 % of customers choose and buy only in physical stores; about 55% look for the product online but then buy it in a physical store; less than 10% buy online; the few that remain to choose in the store and then buy online. A strong majority, around 85%, still buy in-store but shopping is increasingly influenced by the web. Despite everything, the physical point of sale still remains the heart of the shopping experience, the strongest point of contact for customers with the brand, and the basis from which to start structuring omnichannel. But it is now inevitable: consumers are increasingly experiencing an analog and digital double life, use a landline and mobile technology, and are influenced not only by traditional media but also by social media. It’s called Retail 4.0: many different formats that exploit the physical and virtual worlds, the cloud, and mobility, increasingly choosing hybrid and hyper-converged solutions.

What is multichannel

The distinctions between multichannel (or multiple touchpoint approach), cross-channel, and omnichannel are not always clear. Let’s see them.

Multi-channel, according to the survey released in April 2018 by the Omnichannel Customer Experience Observatory of the Milan Polytechnic,  indicates the company’s development of multiple contact points, which enrich the portfolio of channels offered to customers. Some examples are the social channel, the mobile app, the chatbot, etc. which are added to the others that already exist.

According to the report of the Multichannel Observatory, promoted by the School of Management of the Milan Polytechnic and by NielsenIQ, presented during the conference “Multichannel 2021. Fast forward: the future beyond the recovery”, 88% of the Italian population over 14 has used the Internet in at least one phase of the purchase journey. Users who use digital channels with maturity are growing, Digital Rooted (7.1 million, +24.6%) and Digital Engaged (10 million, +13.6%), estimated at 62% by 2031. Brands – the research continues – are more attractive if sustainable: 73% positively evaluate brands that take sides on ethical and social issues, and 57% reward them in their purchasing decisions. Travel, electronics/IT, and insurance are the sectors for which users make the most use of digital channels in all phases of the path to purchase, especially in the purchasing phase. The physical store remains central to large-scale consumption/ beauty, and clothing.

What is cross-channel

An evolutionary step is cross-channel which presupposes the design of integrated services between several channels (typically two). Some examples are click & collect services, which assume that the order is made online but collected in the store, or geo-localized advertising which aims to push users inside a physical store.

What is omnichannel

Omnichannel represents a further evolution of cross-channel. Not only does it put the consumer at the center, but it provides an interconnected system between all touchpoints. There is, therefore, a data transfer between the different channels and consistent content strategies. In this way, the user can not only interact with the company with a multiplicity of options but also experience the same experience on all touchpoints and have no interruptions in the path from one to the other. The user can start an activity on one channel and continue it on another, without having to start over.

Omnichannel 2022: only 6% of companies have a structured strategy

Despite the multiple opportunities to obtain data,  only 6% of large and medium-large companies in our country have a truly advanced omnichannel approach in 2022. These companies, reports the Omnichannel Customer Experience Observatory, promoted by the School of Management of the Milan Polytechnic and presented on 24 November 2022, are mainly characterized by a single manager, well-structured organizational models, a well-defined overall budget, an advanced approach to the measurement of the impacts of this strategy on the corporate business, as well as suitable technologies to personalize the customer experience.

On the other hand, users are happy to be able to have an omnichannel experience. Only 13% of Internet users declare themselves against sharing their data with companies in any case (10% among the new generations, about 20% among the baby boomers). The remainder would do so against payment or economic advantage (40%), less advertising (26%), faster assistance (26%), and access to valuable services or content (25%).

“If until a few years ago – says  Nicola Spiller, director of the Omnichannel Customer Experience Observatory – the ‘customer centric’ and omnichannel transformation was a driving force for competitive differentiation, first the pandemic context and then economic uncertainty raised the priority of theme: investing in dialogue with your buyers and taking on an integrated perspective means allowing companies to reduce some process inefficiencies and start a virtuous circle with the customer himself. The omnichannel transformation – he continues – is pervasive and involves the entire organization. Like in an orchestra, all company functions and processes (from Marketing to Logistics, from Production to Sales) must play in unison, to improve the customer experience. This requires a strong commitment from top management and, in most cases, a profound organizational transformation”

In this graph of the Observatory all the benefits of omnichannel for companies 

OMNICHANNEL, THE EXAMPLES

Disney, Starbucks, Yamamay, and Bank of America have one thing in common: they use omnichannel strategies. Let’s see how.

STARBUCKS

The group founded by  Howard Schultz in 1983 has conquered a still unexplored territory thanks also to omnichannel, of which it is one of the most interesting examples. The Starbucks rewards app (we could call it a loyalty card) is one of the best examples of an omnichannel experience. At first, the customer gets the card, to use every time they make a purchase, but, unlike traditional loyalty programs, Starbucks has made it possible to check and top up the card by phone, website or through the dedicated app . Any change that occurs in the user’s card or profile is updated on all these channels in real time.

YAMAMAY

The underwear brand, belonging to  the Pianoforte Holding SpA Group  owned by  the Cimmino and Carlino families and  based in Gallarate, entered into a collaboration with  Accenture  in April 2019 to combine digital opportunities with those of the traditional store and thus create a  customer omnichannel experience . Based on omnichannel strategies, the user can not only interact with the company with a multiplicity of options, but also  experience the same experience on all touchpoints and have no interruptions in the path from one to the other . It is possible for the user to  start an activity on one channel and continue it on anotherwithout having to start over.

Inside the Cordusio store, Yamamay’s dedicated personal shoppers have mobile payment technologies to guarantee assistance from the customer’s entrance to the time of payment, without the latter necessarily having to go through the cashier  at the end of the journey. Other technological innovations in an omnichannel key developed with Accenture are the  interactive touchscreen monitors  and  a 3D hologram that allows the viewing of three-dimensional moving images, with the effect of a virtual fashion show. Another strong omnichannel element is  Anna, a mobile chatbot created by Accenture to offer clients a personalized fashion consultant. Accessible through Google Assistant and activated thanks to Artificial Intelligence provides  suggestions on garments and accessories only after having carried out an analysis of each person’s style . Access to the fashion stylist can take place through one’s Google account, without having to install applications on the smartphone: following Anna’s advice, the user can connect to the Yamamay website to proceed directly with the purchase, also benefiting from the service click&collect.

WALMART

In recent years , Walmart,  the large US chain of stores, has realized that physical stores are no longer enough and has understood the importance of online. In 2014 it opened a first center specifically dedicated to e-commerce in Texas  and the following year it decided to completely revolutionize its organization with the aim of tripling the revenues from online sales in 3 years. Over the years Walmart has opened the e-commerce section and has invested billions of dollars in digital and digital marketing. An inverse path to that of Amazon which, starting from pure commerce, has begun in recent years to open physical points of sale, albeit some of which are fully automated such as Amazon Go.

DISNEY

Disney’s omnichannel experience starts from the highly responsive website. So is the trip planning site: once you’ve booked one, you can use My Disney Experience to plan your entire trip, from meals to Fast Pass purchases. In the Disney amusement park, you can use the app to locate the attractions you want to see and you can check the estimated queue time for each one. But the company goes one step further with the release of the Magic Band program: a tool that serves as a hotel key, photo storage device, and way to order meals. A truly omnichannel experience.

BANK OF AMERICA

Bank of America is one of the giants of the American banking world, therefore it has decided to guarantee the customer a dynamic experience at any time: from depositing money to noting appointments, everything takes place through the bank’s mobile and desktop apps. It still has some way to go: users can’t apply for loans or perform more complex operations from their smartphones. But she is determined to continue the experiment that has already begun towards omnichannel.

The benefits of omnichannel: increasing sales channels leads to an increase in customers

Opening additional sales channels allows you to reach new customers. Offering consumers multiple purchasing methods only increases sales, as it gives them the opportunity to take advantage of the most convenient and comfortable type of purchase. A Harvard Business Review study found that omnichannel customers are more valuable. On average, they spend 4% more on each in-store shopping occasion and 10% more online than non-omnichannel customers. The research then highlighted that “for each additional channel used, consumers spent 9% more in the store, compared to those who used only one channel. Furthermore, customers who use more channels are more loyal”.