Demystifying an omnichannel retail strategy

A sophisticated omnichannel strategy has emerged as a key component in brands’ ability to effectively engage customers across multiple platforms.

Outdated approaches view brick-and-mortar stores as the competition to the e-commerce offer. In reality, the channels complement each other – sometimes in unexpected ways. Let’s explore the evolving role of physical stores and how they contribute to a seamless omnichannel experience.

Brick-and-mortar and e-Commerce: a complementary relationship

It is now understood as a misconception that physical stores are siphoning sales to e-commerce. While e-commerce is growing rapidly, brick-and-mortar stores still play a crucial role. According to recent data, traditional retail sales grew by 9.6% between 2015 and 2020 , whereas e-commerce saw a whopping 74.3% growth during the same period. However, the growth of digital platforms has not rendered physical stores obsolete. Instead, they’re evolving to support the omnichannel model in new ways.

The new role of physical stores

As digital commerce has surged, the function of physical stores has expanded beyond being merely transactional hubs. Retail stores have morphed into:

• Showrooms where customers can physically experience products before purchasing online or in store.
• Collection hubs served by a strategic warehouse network, improving delivery times.
• Return centers simplifying the return process for online purchases.
• Brand billboards and experiential hubs offering immersive brand experiences that digital platforms can’t replicate.

This evolution means that the success of a retail store should no longer be measured solely by its sales transactions.

During the pandemic, online capabilities were stress-tested, and poor online experiences often left a worse impression than good ones enhanced loyalty. A sophisticated omnichannel offer provides a seamless blend of in-store and digital interactions to meet customer expectations.

The proximity effect

Research shows customers who live near physical stores tend to spend more online. This can be explained by considering the trust and familiarity a nearby store generates. Especially for large or expensive items, the reassurance of a close physical location empowers consumers to make larger spending decisions they would not otherwise make in a strictly online environment.

An omnichannel case study

Take the example of one of our clients, a home fitness brand. Initially focused on e-commerce, the company sought to expand its customer base. They found that adding physical stores enhanced their online sales, as customers valued the opportunity to interact with products and staff in person before making a purchase. This was especially important at the brand’s premium price point. Additionally, stores acted as brand billboards, increasing awareness and driving increased web traffic in the markets of the locations. on.

The better way forward

An omnichannel retail strategy does not pit brick-and-mortar against e-commerce. Instead, it leverages the strengths of both to create a cohesive, enhanced customer experience. As consumer expectations continue to evolve, retail brands need to embrace the changing roles of physical stores to enhance their digital efforts, ensuring that all channels work together in harmony.

This synergy between physical and digital commerce is key to unlocking the full potential of an omnichannel retail strategy. By understanding how these elements complement each other, brands can ensure long-term success in a competitive retail environment