The Path to Omnichannel glory

April 2, 2015

The business world loves its buzzwords and there isn’t one as heavily used as Omnichannel in recent memory. Perhaps for the exception of Big Data.

Omnichannel is the key trend in retail and it’s an important one to boot. It involves many different elements of an organization and is really quite complex. This is partially why it is also misunderstood. I’m going to attempt to break it down this concept into its core elements and make it more actionable for retailers (warning tl;dr)

Let’s start with a definition. Omni means = all, by definition all channels

According to IDC Retail Insights, omni-channel shopping “requires providing an immersive and superior customer experience regardless of channel”. In essence, it is understanding and providing value for customers across all channels. Across channels is the key part due to growing diversity of choice for customers across web and brick & mortar. It cannot be denied that pre-shopping is playing larger for customers.

Forrester expects combined online and web-influenced retail sales to reach $1.8 trillion by 2017 in the US, up from $1.3 trillion in 2013.[1]

Mobile’s role is also well known. The use of smartphones influences in store sales. The below table demonstrates the non-negligible impact of mobile in store. That number is estimate to grow to 689 billion of Canadian in-store sales in 2016!


Retailers can no longer manage their various channels as silos, that is pretty self-evident. This is where an Omnichannel strategy comes into play.

At its core, two technologies really driving this new approach to multi-channel retailing.

  1. Smartphones
  2. Big Data and Analytics

Retailers need to understand these shifts and alter their processes accordingly. Where do they start? Let’s dig in.

Single View of the Customer

This simple graphic below illustrates the promise of the Single View of the customer.


A single customer view makes it easier for marketers to think strategically and understand the different touchpoints of their organization.

It allows marketers to get a much better sense of which of their actions are creating long-term customer value.

Combining all these silos is easier said than done. We’ll cover how to do this next.

Big Data

There’s that word again! By big data, we mean integration of various systems like ERP, CRM, Analytics and more importantly bringing the intelligence necessary to interpret and extract valuable business insights from that data . The interconnectivity of these platforms is easier than ever to understand your customer’s behavior across channels.

For online pure plays, they are accustomed to handling large amounts of data. Amazon conducts over 200 A/B tests a day! This used to give them a tremendous advantage in increasing sales. Historically, brick & mortar retailers have not been able to do this. The advent of this new data is really levelling the playing field (as well as the ability to analyse the data). This capability which was once exclusive to large enterprise players is now available to small companies. Google and Microsoft are now offering pre-baked machine learning and predictive algorithms in a low cost SAAS model as part of their cloud services offering.

Companies like Catalina Marketing are leading in this space. They use in store purchase history to personalize mobile advertising to match particular individuals.

The key point here is that now brick and mortar retailers have something that online pure plays don’t. This can give retailers a competitive edge over online retailers. They can take an aggressive position rather than a defensive one.

In store Technology

At the National Retail Federation in New York in January and the common theme this year was technology. It is slightly overwhelming for retailers to understand what they need to do, but not having a strategy is not a good excuse. At highest level, stores need to provide an immersive sensory experience and highly personalized customer service. Full Stop.

The way this can be implemented can be relatively quickly in a retail environment. The use of tablets for example by sales associates can give customers access to broader inventory as well as reviews. Picture a customer coming into your store and not finding a product they are looking for. Instead of losing the sale, your store associates can now help them find the product online.

Remember the long tail? Basically, ecommerce players have unlimited inventory thanks to the web. Amazon makes more revenue from books that have sold 1 copy in a year (the tail) than the New York best sellers combined (the head). Now retailers can use their stores to sell long tail products and also happens to be a great way to increase sales.

Another key component of in-store technology is mobile. Home Depot allows via their mobile app for people to locate products on specific aisles.


The promise in store navigation is finally here. You can probably guess the advantage of implementing this strategy = the data. Harnessing this data to maximize in-store merchandising is a massive opportunity. Retailers know have a way to know what customers are looking for while they are in their stores.

Another strategy is the use of RFID at the individual product level. Is your inventory sitting in the back store? Are your top sellers not fully stocked up? Tracking each individual product can be an expensive implementation. A retailers product margins and product turnover will dictate the need for this kind of tracking.

Tracking products is one thing but what about tracking customers? Traffic counters have been a staple of key retail metrics for a long time. The availability of new kinds of data due to smartphones is taking this to a whole new level.

Euclid Analytics is analytics firm that has developed technology that tracks how many people enter a store, how long they stay and even which aisles they are walking through. They do this by looking at Wi-Fi-enabled smartphones, allowing it to track a store’s traffic and repeat customers.

Want this in a neat Google Analytics type dashboard? No sweat


What’s also possible today? Retailers are able to provide special incentives aimed at customers as they enter stores. BestBuy already does this for users of Shopkick (a shopping rewards smartphone app) or when they leave without purchasing anything.

Privacy Alert! Nordstrom got into a bit PR hot water over this kind of tracking and had to scale back its program. The legal team needs to get involved on these matters and the any tracking made clear for customers


Mobile commerce is proving to be a key enabler in the unified retail consumer experience. 42% of consumers research their purchases online while in stores. [2]

Location based applications open up new selling opportunities for retailers

local retailers seeking to rev up sales activity can send out promotional messages to consumers within the vicinity or even to people in a competitor’s store

A leader in this space is undoubtedly Macy’s. Their glorious app allows customers to find scan barcodes to get product details, pricing info & customer reviews and find out more about a product or a promotion.


They have also figured out how to close the gap in measurement between online advertising and offline sales. Here is a good case study that explains how Macy has mastered Omnichannel measurement.


The key advantage that brick & mortar players have is the multi-channel approach. Ecommerce can be used to drive online sales but also influence in-store sales.

Here is a great Canadian example of Omnichannel in action from someone you wouldn’t suspect, Canadian tire.

I was researching a product that I’m very likely to buy, a mountain bike.


By entering my postal code I’m able to see what stores have the cool mountain bike in inventory. This is a great example of a company that is bridging the gap between ecommerce and retail sales.

Advertising and Promotion

LIkes, retweets, page views, bounce rate. These are all great metrics but most decision makers don’t know what to make of them. There is finally real movement towards metrics that matter.

Google recently launched in store metrics. Google determines a store visit based on user proximity to the advertiser’s location on G. Maps from users that have location history activated on their Apple or Android smartphones.

This is still in beta but a first trial showed that 10 to 18 percent of clicks on search ads lead to a store visit

Another great example is the Walgreens check in feature with Foursquare. Users that check in automatically download a deal directly to their phones with a scannable barcode.


Investment and Strategy

This is all great theory but how can a team actually implement this stuff? There’s obviously a limited amount of capital expenditure possible. What framework can the CIO & CMO use to actually move their organization towards Omnichannel retailing?

  1. A) Channel

A decision needs to be made to invest in each channel accordingly. Of course, all channels need to be embraced for your customers. You can’t hide the internet or smartphones from your customers. A list of strategies needs to be drafted based on your priorities.

For brick & mortar retailers, they need to provide inventory information online[3] and enable in store pickup. In addition, the in-store experience needs to be maximized to capture customer identification (most cases email address) and allow for online inventory to be available.

For pure plays, enable customers to use their apps to transform physical channels into showrooms

  1. B) Financial

While the multichannel shopper will spend on average, 15 percent to 30 percent more than someone using just one channel, omnichannel shoppers outspend multichannel shoppers by over 20 percent. [4]

Retailers need to understand based off their data, what an omnichannel customer is worth for them. This will help guide the decision to invest.

  1. C) Training

Training of sales associates needs to be incorporated at the store level. Adding technology like tablets for example to help facilitate in-store research is going to be key. Every employee training program needs to have an omnichannel component included in it.

  1. D) Data

Analytics is the new currency in retail. To build a sustainable long term advantage, retailers need to better understand their customers, how they shop, what products are answering their needs, how they are trending against their competitors and so on. To be clear, this is not just quantitative data but also qualitative.

Is the future of retailing already here?

It’s hard to argue that the future hasn’t already arrived. The plethora of low cost technologies available today signal a shift in how retailers go to market. The urgency for organizations to act is clear. It is a winner take all market and technology has made omnichannel an inevitability.



[2] Google, Mobile In-Store Research Study