What an Omnichannel Approach can do to Build Customer Loyalty
Technological advancements are driving disruptive and transformative impact on the global retail industry. The emergence of multiple shopping channels – brick-and-mortar, Web and mobile, among others – is forcing organisations to transform product-centric business models into customer-centric ones to ensure a seamless shopping experience across all retail channels. Businesses employing the traditional multichannel retail approach in adopting customer centricity are struggling to build customer loyalty. Customers are demanding this change and the Omnichannel approach has enabled businesses to harness the shift by focusing entirely on customers instead of single-point solutions for individual channels.
The Omnichannel approach essentially unifies the brand story across all retail mediums to provide a consistent customer experience, and integrates the customer-facing and back-end operating models with agile technologies.
Revamping the Business Model
Present-day customers are more tech-savvy than an average brand advocate, and in more control to make appropriate purchase decisions with the proliferation of digital technologies and the resulting internet economy. Customers are therefore empowered to choose any path on their purchase decision journeys. As a result, conventional competitive differentiators such as manufacturing, processes and to some extent, service quality have been commoditised.
The Omnichannel approach enables businesses to focus on enhancing loyalty across all stages of the customer lifecycle. This strategy helps businesses to interconnect all touch points of the purchase funnel by ensuring seamless shopping experience across all channels, and therefore contributing to the overall customer journey.
Customer loyalty is no longer just about offering discounts and coupons. Businesses have to incorporate loyalty well before engaging them in sales by offering the right information and offer at the right time, which is the primary purpose of Omnichannel practices.
Omnichannel retail solutions leverage big data and analyse customer behaviour to yield actionable insights that empower businesses to deliver personalised shopping experience to every individual customer. Understanding varied customer behaviour is crucial to optimising shopping experience across all channels. This customer-centric approach strengthens existing customer relationships as they are incentivised to respond positively, encouraging the additional personalised services that set brands apart from the competition.
The Omnichannel approach is used as a coordinated strategy aimed at maximising cumulative benefits across all channels. The returns are measured across campaigns and tactics spanning multiple retail avenues. The improvements are therefore reflected simultaneously across multiple channels, allowing businesses to strengthen relationship with a growing pool of customers seeking relevant information via different retail media and sources before making purchase decisions.
Enhancing Customer Experience
Enhancing customer user experience across all channels is at the core of these improvements. Mass digital disruption has forced a significant shift in customer purchase journeys and decision patterns. At the same time, businesses are expected to address these changes efficiently, integrating disparate retail channels for a seamless user experience. The loyalty loop therefore spans across all touch points of the consumer decision journey, enabling customers to participate in cross-channel retail simultaneously, which is necessary in the modern consumer-driven retail industry.
The channel optimised approach not only engages customers during the initial stages of the purchase funnel, but also drives brand advocacy upon successful engagement. With the Omnichannel strategy, brands serve appropriate information to potential customers well before they are engaged. Customers therefore respond by placing more trust and advocating the approaching brands to their wider social network. The Omnichannel strategy also enables businesses to track brand advocacy from each customer and reward them accordingly.
And the results are staggering, to say the least. A recent Aberdeen Group research concluded that businesses employing the Omnichannel strategy achieve 91 percent greater year-over-year increase in customer retention rates and five times higher average profit margin per customer as compared to competitors incorporating conventional consumer engagement strategies. The IDC Group also finds Omnichannel customers spend 30 percent more than multi-channel customers, who spend 30 percent more than single-channel customers.
The end result is a mix of highly coordinated and compelling cross-channel engagement, relevant business interactions and incremental growth of loyalty among existing and potential customers.
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