Brick-and-mortar retailers are increasingly incorporating omnichannel activities into their existing business models, recognizing that 70% of customers now use multiple channels during their shopping journey. Omnichannel retail is a cross-channel marketing approach that considers the customer first and provides them with a seamless buying experience. For companies, it means leveraging existing store assets to deliver a competitive advantage over the online-only competition.
Against the backdrop of declining foot traffic, retailers also own more physical space than ever before, with the U.S. brick-and-mortar footprint more than twice that of any other developed economy. This is only half of the story, however. While online options have eroded sales, savvy managers are also taking the best ideas from digital businesses and combining them with brick-and-mortar assets in new ways to deliver added value. More than simply adapting to the digital landscape, companies can leverage their existing physical resources to more effectively integrate e-commerce and mobile retail technologies into their traditional business models.
Specific brick-and-mortar, e-commerce, and mobile commerce elements can be incorporated via an omnichannel retailing approach to increase consumer loyalty, sales size, and profitability. All hinge on the desire of shoppers to receive relevant information and timely fulfillment. The following article suggests five tools to increase your omnichannel retail performance, and how companies can leverage the advantages of omnichannel retail to enhance their existing businesses.
1. Buy-Online-and-Pick-up-in-Store (BOPIS)
Brick-and-mortar retailers are supplementing in-stores sales with online investments to improve their operational efficiency. When asked about their priorities for improving cross-channel activities, retailers reported that fulfillment initiatives ranked #1 when selecting from a list of 15 omnichannel initiatives. Order fulfillment describes acts related to product distribution and the logistics function of moving products in a timely fashion. However, its broader implications refer to the ways firms respond to customer orders. Improving the speed and accuracy of orders and providing a convenient shopping experience to consumers is key to an omnichannel approach. This helps explain why retailers selected having a buy online and pick up in store (BOPIS) option, specifically, as their highest priority cross-channel activity.
The BOPIS option affects customer choice by providing real-time information about inventory availability and by increasing convenience for the buyer. Allowing customers to pick up their online orders in-store generates more store traffic and potentially increases sales through cross-selling. An estimated 45 percent of customers who use an in-store pickup option make a new purchase when picking up the purchase in-store. On average, when a customer goes to a store intending to buy $100 worth of merchandise, they leave with $120 to $125 worth of merchandise. Retail managers can also locate the BOPIS pick-up location at far corners of the store to further increase cross-selling opportunities.
2. Fulfill Digital Orders from Retail Stockroom
Brick-and-mortar retailers can create operational efficiencies by integrating online channels into their traditional business models. One way to accomplish this is to re-align retail space to process online orders. An increasing number of brick-and-mortar retailers are now using their retail stockrooms as forward fulfillment centers to fulfill online orders, provide last-mile delivery services via pick-from-store, and give stores an expanded role in handling returns from online customers. By fulfilling more digital orders at store locations, retailers also reduce the need for central warehouse space.
Supplier relationships, market power, and an existing customer base can give brick-and-mortar retailers a major advantage over pure-play online retailers. They can leverage their existing distribution network, pool inventory, and establish efficient returns processes for their online channels. For example, one way to minimize the cost of delivering products to customers is to ship packages to stores through the routine store-replenishment shipments from the distribution centers. Online customers can then stop by their local store to pick up these packages (an extension of the BOPIS activity outlined previously), often with no delivery charges.
3. Location Targeted Mobile Ads
Location-targeted ad spending involves sending messages to mobile users based on their geographic locations, which allows retailers to instantaneously deliver advertisements and coupons that are customized to an individual’s tastes. The practice is projected to grow by 120% between 2022 and 2027. The shift in mobile ad spend toward location-targeted campaigns is driven by better data analytics and a deeper understanding of consumer behaviors. Retailers who know where potential customers are located are better positioned to execute omnichannel marketing programs. In doing so, they can deliver timely, consistent brand messages that increase store traffic and sales.
Research shows that searches initiated by location-targeted mobile advertising lead to 50 percent of consumers visiting the store within one day, with 18 percent of those store visits resulting in a purchase. As consumers demand increased speed and shopping convenience, brick-and-mortar retailers that can drive consumers to their stores can differentiate themselves from online retailers by providing same-day product receipts.
Initial interest that consumers have in a product plays a major role in the effectiveness of location-targeted mobile advertising. High-interest customers – defined as those with a predisposition to buy a product or service – can more conveniently and confidently complete a purchase after viewing a location-targeted ad). Low-interest consumers, on the other hand, need more time before making a purchase — in one study, more than one week after receiving the location-targeted mobile ads, on average. Low-interest users may need more time and research to evaluate or test the trustworthiness of the mobile offer.
4. Dynamic Pricing
Advances in mobile technologies and data analytics allow companies to send immediate, hypertargeted offers to customers who are considering a purchase. Thus, retailers also have an opportunity to utilize dynamic pricing, which enables a business to set flexible prices and adjust them based on current market conditions. Amazon adjusts prices on up to 80 million products throughout the day during the holiday season, changing prices constantly to increase sales and direct consumers to their featured products.
Mobile technologies further multiply the opportunity for retailers to deploy dynamic pricing because shoppers now consume and provide information to retailers at the point of purchase via their mobile phones. Retailers can collect and analyze data instantaneously to tailor personalized solicitations to the customer. In this way, dynamic pricing provides two competitive advantages for retailers. The first, time-based pricing, allows retailers to adjust pricing to match consumer demand, drive increased demand during off-peak hours, and modify prices in real-time in response to competitor changes.
The second way that retailers can leverage dynamic pricing is through customer segmentation. This allows retailers to target different customer segments at the price point that they could be willing to pay, based on user profiles such as income or location. Businesses can then choose how they price items and can also incorporate external information about competitors with their knowledge of a user’s device location. Staples Inc. estimates a customer’s location and then shows a discounted price on its website if the user is within 20 miles of a non-Staples retailer that might sell the same product. The discounted and higher prices differ by 8%, on average, as Staples employs user location to increase its sales and margins.
5. In-Store Digital Technologies
Brick-and-mortar retailers can also leverage digital technologies in-store to enhance the customer shopping experience and create a differentiated value proposition. Digital technologies, examples of which include in-store tablets and kiosks, virtual/augmented reality, interactive hangers, and location-based services can be used to create a deeper brand engagement, improve customer/product matches, and increase shoppers’ convenience. 
Digital technologies leverage the desire of some mobile users to actively interact with an offer or display. For example, quick response (QR) codes can be placed in various locations within a store or on merchandise. These QR codes can then be used by consumers to provide more product information at the point of sale. This increases consumer engagement by up to 40%. Another way to leverage in-store digital technologies is via the use of near-field communication (NFC) shopping. In this activity, customers use their smartphones to access labels for product and pricing information, access loyalty programs, or share content on social media.
In-store tech can also deliver a “personal shopper” that considers a user’s request and contextual information about the location to quickly recommend the best product. North Face introduced such a tool at its stores. This digital assistant device utilizes knowledge of the brand’s product database to provide ideas to the user. For example, a shopper can tell this device that his or her family is planning a trip and needs a tent, sharing the location of where the family would like to go. This provides convenience to shoppers and increases the perception of North Face as having product expertise.
Suggestions for Omnichannel Retail Implementation
Leading an organization through the challenges presented by new omnichannel activities requires committed leadership. We suggest that managers can utilize four strategies to help guide them through these large-scale project implementations and efficiently blur the traditional lines between channels in their companies.
- Nominate a project leader who is supported by the senior management team. Breaking down silos and building a more integrated model requires a serious organizational commitment.
- Test potential solutions to overcome challenges and engage in a trial-and-error learning process. The results can help define the features of the final retailing mix.
- Engage in organization redesign to develop collaborative practices among services. This includes implementing integrative and original human resource policies that cement the changes initiated by the new omnichannel strategy or activities.
- Commit the resources to synchronize the back-office systems, with a focus on delivering a seamless customer experience. This will help keep a consumer within the brand ecosystem and capture insights that can be used to develop future omnichannel activities.
How Else Do DaBrian Marketing Help Retail Stores & Ecommerce Businesses?
Want more shoppers in your store? Need to increase online sales? Whether you need to create a plan or revise the one you have, our ecommerce marketing agency can help increase revenues while you tackle the rest of your ecommerce business. Here are some of the concrete ways that we can help:
- Incorporate Shopify or Woocommerce - We can design or update your store on multiple platforms, making it easier for shoppers to buy from you
- Bring Nearby Shoppers to Your Door - We are a full-service ecommerce marketing agency, with supporting expertise in Content, Social Media, and Organic Search (SEO)
- Promote Your Products on Shopping Engines and Marketplaces - We will implement best practices, content recommendations, and keywords that are relevant to your target audience
- Accelerate Sales Growth Through Paid Ads - We can supplement your online store with engaging Ads on Google, Bing, Facebook, Instagram, and Amazon
Let’s partner together not just to improve sales, but also to increase traffic to your brick-and-mortar stores. We can help you develop a new, profitable customer acquisition program that delivers results. We won’t stop there — DaBrian Marketing Group will test and adjust the marketing plan to improve your performance over time. Stop wasting valuable resources on pre-pandemic tactics — re-allocate your marketing spend to attract and engage the right customers, in the right place, at the right time. If you still have questions, contact DaBrian Marketing Group today.
