The rapid onset of the pandemic led to an almost-overnight shift in shopping behaviors, including a sharp rise in online and omnichannel retail. Demand for things like faster delivery, curbside pickup, and personalized, omnichannel fulfillment options grew at a robust pace. Retailers also got a taste of just how fickle their customers could be, as supply chain disruptions caused shortages and delays.

Further insight into retail trends from a December 2021 survey demonstrates that when shoppers are faced with out-of-stock items only 13% waited for the item to come back in stock versus the 39% who switched brand or products and the 32% who switched retailers.

For the past couple of decades, retailers have understood that if they are to thrive, they need to offer customers a choice. Research shows that up to 85% of shoppers prefer using both physical and digital channels, and, increasingly, customers want to entirely set their own terms as to how they pay for, receive, and even return their goods.

But today—in a climate of unprecedented competition and change—the best retailers have learned that omnichannel is not just about offering more options; it’s about service, personalization, and providing an ever smoother and more seamless journey for customers as they move across shopping and fulfillment channels.

Multichannel versus omnichannel

Just as all poodles are dogs but not all dogs are poodles—all omnichannel retail is multichannel but not all multichannel is omnichannel. So, what’s the difference?

In business terms, multichannel shopping has been with us for well over a century when, in the late 1800s, many prominent brick-and-mortar retailers also began distributing mail order catalogs. Today, most companies that offer customers a choice of different shopping and e-commerce channels consider themselves to be omnichannel retailers, but are they really?

Let’s look at the Latin root words multus and omnis, with multi meaning many or multiple and omni meaning everything or all. In a multichannel model, yes, the customer has multiple choices and flexibility as to how, where, and when they purchase items. But in many cases, these shopping channels are disparate and disconnected. In other words, if a customer switches from one channel to the next, they have to start from scratch. Putting an item in an online shopping cart does not mean it will be put aside in the physical store. Nor will a shopper’s preferences or profile be reflected from one channel to the next.

Whereas in a true omnichannel shopping experience all the channels integrate into a more seamless experience where customers can pick up wherever they left off—in real time, anywhere. Not only does this let them see their preferences and past actions across channels, it also allows businesses to better leverage data collection to ensure a more personalized and relevant customer experience.

Why is m-commerce (mobile commerce) so important?

Typically, shoppers go to their laptop when they want a larger view of products. They visit the store if they want a more experiential shopping environment. However, it’s the mobile commerce channel that is the make-or-break for many businesses. After all, there are over seven billion smart phones in the world and most people keep theirs within easy reach for most of their day.

When it’s executed well, m-commerce can offer customers unparalleled speed and simplicity, leading to a more convenient shopping experience. According to a National Retail Federation survey from January 2020, 83% of shoppers prize convenience more than ever before. Today, most e-commerce tools work best on mobile devices and many offer one-click solutions that can help minimize customer indecision and lead to fewer abandoned carts.

Since mobile users account for most of the traffic on social media, it’s essential that retailers offer users a shopping experience that’s not only seamless across their branded channels, but also throughout their social media pages as well. Every moment of delay, every additional click, and every step away from the original portal leads to a corresponding reduction in purchasing and rise in cart abandonment.

Furthermore, with delivery speed demands on the rise, it’s important that customers are receiving texts and notifications with tracking and delivery information. This service is easiest and most straightforward when done using a mobile device.

Top five omnichannel retail trends

Customer expectation is for increasingly seamless omnichannel retail that meets them where they are and offers services that are flexible and personalized across the board. Here are a few more emerging omnichannel retail trends:

1. More personalization and control Personalization means creating a customized experience across shopping and purchasing channels as well as advertising, marketing, and sales channels.
   Shoppers want to be able to make changes to their account or purchase options and have those changes and preferences remembered across both digital and in-store experiences. For example, when you touch an app to let the retailer know you’re coming, you’ll arrive in store to find an assortment of suggestions preselected for you in a dressing room—based upon your online shopping preferences.
   Also, with easy shipping comes the expectation of easy returns, so tracking refunds and exchanges across every channel will also become a key aspect of omnichannel personalization that businesses will need to offer.

2. Shoppertainment and social channels Shoppertainment, of course, is a combination of shopping and entertainment. It had a particularly noticeable impact during the pandemic, as many consumers who were stuck at home were eager to create more engaging experiences. This can mean things like in-video shopping or sharing clickable and buyable productions within a social media platform.

3. Demand for speedy delivery Every year, the baseline for minimum acceptable delivery speed is dropping, spurred on by the Amazon effect and a growing prioritization of convenience above other factors—to the extent that we are now looking at an increase in consumers who measure this by the hour rather than the day. Furthermore, research shows that if businesses are unable to offer speedy delivery times of at least one to three days, “almost half of omnichannel consumers will shop elsewhere.”

4. More fulfillment options (and more sustainable ones at that) Greenhouses gases produced as a result of supply chain operations account for as much as 80% of our total global emissions. To improve fulfillment, achieve faster delivery speeds, and protect the environment, businesses are increasingly investing in smart technologies to help them make their operations more efficient, streamlined, and transparent.

5. Cloud-connected supply chain technologies These technologies help to power growing micro-mobility delivery networks, as well as more sustainable options for both fulfillment and returns.

Omnichannel retail benefits

With more data available from more channels—and more interactions that cross channels—retailers can understand their customers in a way that was simply not possible before.

• Collect and analyze data. The ability to collect data is one thing, but it’s just noise until retailers can use it effectively. Leveraging data analytics allows retailers to receive highly granular information that’s useful in real-time product customization and demand forecasting.
  This knowledge isn’t just convenient for businesses looking to minimize waste—it can also offer customers a better prediction of shipping and delivery times, allowing them to get what they need exactly when they need it.

• Make the customer experience better. When businesses are working with more information, they can offer a customer experience that is not only faster but also more transparent, personalized, and flexible. Ultimately, this provides a competitive edge in the crucial areas of customer trust and loyalty.

• Improve sales. Attention spans are shorter than ever, so eliminating delays and barriers between “considering” and “buying” is crucial. One of the main drivers of cart abandonment is a flawed or complex checkout process. When this is streamlined through a one-click checkout or by using personalization to auto-populate the checkout form, businesses can lower their rate of cart abandonment and improve sales.

• Expand your brand image. With the world’s most successful brands, all you have to see is a color or one letter of font and you know who it is and how you feel about them. Omnichannel marketing gives retailers an invaluable opportunity to synergize their brand elements across channels, creating a brand experience that is both seamless and highly consistent regardless of where or how consumers are shopping.

Omnichannel retail challenges

Modern retail and supply chain technologies are helping businesses to better understand and even predict trends in the increasingly complex omnichannel landscape—and this is opening up new opportunities and business models across the globe. However, as demands grow more complex, retailers must also be aware of the challenges they face and the steps they need to take to stay ahead of the game.

Micro-fulfillment and inventory management

If shipping takes too long, shoppers will simply abandon their carts and try someplace else. Free and fast delivery often makes the difference between a purchase and a lost sale.

This has led to intense demands for speed, as well as other micro-fulfillment options like buy online, pick up in store (BOPIS) and delivery lockers that can give customers more flexibility on when and where they receive their goods. This evolution in fulfillment makes omnichannel an enormously complex supply chain and logistical challenge and drives the need for greater cross-business connectivity and data management.

Cross-channel messaging content

The best brands always have consistent messaging. They can’t offer special discounts or conditions on one channel and not the other—everything must be the same across the board. This seems obvious but, nonetheless, many large retailers continue to struggle with administrative issues like siloed departments and a lack of connectivity and agreed-upon messaging.

Customer support and experience

The goal of omnichannel retail is to ensure that the customer’s experience is just as terrific no matter how they shop or where they receive their support. For many businesses, this can be a challenge, as it typically involves the use of multiple support channels such as live chat, in-person, telephone, and digital assistants. Today, many legacy business systems are pushed past their capacity to cope, and modern retailers are turning increasingly to artificial intelligence (AI)-driven cloud solutions to integrate their entire customer service network in real time.

Managing returns

With omnichannel shopping comes an increased demand for omnichannel returns. Customers want a variety of options as to how, where, and when they undertake the returns process—and they expect it to be as effortless as possible.

Unfortunately, this can be expensive for retailers, with returns amounting to roughly 10% of total retail sales. Services like Amazon Wardrobe are setting the bar, and customers expect that the liberal and convenient return policies they enjoy there will be offered by all their favorite brands. To grow and compete, retailers must incorporate tools and solutions that help them coordinate and connect their increasingly complex logistics networks.

Outdated systems

During the pandemic, many retailers tried to respond quickly to increased demand and supply chain disruption by bolting a variety of not-for-purpose software and database solutions on to their existing legacy systems. This is a temporary fix that—if it hasn’t already—will break down at some point, causing a dangerous risk of long-term failures or system shutdown. This can cause a worrying lack of trust in today’s competitive retail climate, where online shoppers will quickly abandon their shopping carts and move elsewhere if they don’t trust a site.

Retail technologies are transforming omnichannel commerce and fulfillment

By now, you may have noticed that many of the benefits and challenges related to omnichannel commerce have to do with both agility and resilience—or the lack thereof. At this point, the difference between a challenge that costs money and a benefit that makes money is the ability to understand the stakes and handle issues quickly and consistently. That’s where retail technologies come into play: using AI, machine learning, and advanced analytics technologies to transform commerce and facilitate omnichannel fulfillment.

• Live chat support: Live chat support is a critical tool that businesses can use to offer customer service through their social media channels, Web sites, and apps. Many businesses have invested in live chat that uses AI and machine learning to help chatbots become more lifelike and personalized for different users and demographics.

• Recommendation engines to personalize the shopping experience: Again, AI and machine learning can be utilized to help personalize the shopping experience. Some of the best include recommendation engines with algorithms that can do more than just compare recent purchases. They can also leverage other types of data to build a psychographic profile of the types of products customers would be interested in, allowing them to make more accurate recommendations and predict future preferences and trends.

• Headless content management and marketing automation: The potential for automation in marketing and content management is endless. By freeing up IT departments from constantly tweaking storefronts, companies can be more responsive than ever before. It also puts marketing teams in the driver’s seat, so they can respond rapidly to the data that gives them insight into changing trends and customer behavior.

• Edge computing for greater retail agility: When retailers can bring the power of smart, cloud-connected business systems to the retail centers themselves, they empower the ability to interact and respond in real time to inventory risks as well as sudden consumer demands or behaviors. This helps improve communication and collaboration between on-premise staff and the rest of the organization and allows all employees to seamlessly plug into their customers profiles and needs.

• Microservice infrastructure: This supports omnichannel payment options, including BOPIS, POS, m-commerce, in-store scan, bag and go, and more. Creating omnichannel payment options by tying them together in this way benefits both customers and businesses. This microservice infrastructure can also be tied into fulfillment processes to better facilitate returns, creating a smoother and more convenient process from payment to potential return.

• Micro-fulfillment infrastructure: Responsive, on-demand logistics networks depend upon strong cloud-connected systems and easy-to-use applications. Modern delivery and fulfillment networks need to be agile and close to the ground. To facilitate ever-faster delivery speeds, businesses must coordinate loads, communicate in real time with fleets and customers, and provide applications that support easy on-demand driver response and tracking, for scalable last-mile delivery networks.

Next steps to omnichannel and online retail transformation

As retailers continue to modernize and transform their omnichannel operations, they should remember that change can be hard—for customers and employees alike. The good news is that smart, AI-powered technologies provide the perfect tools for breaking down internal silos and helping to support your customers as they quickly learn to love your omnichannel services.

And when you embark on your digital transformation journey, remember to prioritize people. With a good change management strategy and clear communication, you can unearth and leverage the powerful insights and skills that already exist across your team.