Recently, Amazon opened their first brick-and-mortar store in Seattle, Washington. This store, Amazon Books, got many people thinking. Why would the world’s biggest retailer open a brick-and-mortar store? Were online sales declining? Were consumers getting sick of paying for shipping and handling? Did this have anything to do with their failed Prime Day promotion?
Amazon’s online-only presence helped them gain competitive advantage against other retailers, such as Wal-Mart. Regardless, customers’ desires to have physical interaction with products before purchasing is undeniable. Retail trends statistics are supporting this claim. According to Retail Next, the current sales value of US brick-and-mortar retailers is $3.9 trillion. That’s about 87% of the $4.5 trillion US retail industry. Despite the popularity of online shopping, brick-and-mortar stores generate about 94% of retail sales. It only makes sense that Amazon would dip their toes into omnichannel retail.
What is Omnichannel Retail?
Omnichannel retail involves the use of various channels, such as brick-and-mortar, online, and mobile. These channels provide consumers with a seamless, tailored, and personalized retail experience. Something that none of the channels could be successful at by themselves. The adoption of omnichannel practices is a smart business move for any brand who wants to personalize and perfect their customer’s retail experiences.
Data Collection and Personalization
The great thing about omnichannel retail is that it caters to today’s consumers. Omnichannel retail delivers a seamless, multichannel shopping experience, making shopping fun again. The real magic of omnichannel retail happens behind the scenes, in the form of data collecting. This data, which is collected in store and online, is a gold mine of information. It helps to decode a consumer’s buyer persona, guaranteeing the brand can cater to their individual wants and needs.
This data is gathered in a multitude of ways. In-store data is gathered every time a cashier asks a customer for their e-mail address or phone number at checkout. Online data is gathered through a customer’s browsing history and their online orders, among many other factors.
One example of data collection being used for personalization is coupons. The data collected can be used to provide customers with coupons. These coupons can be e-mailed or texted to them and can be redeemed in store or online.
This data can also allow salespeople to tailor their communications with customers. The selling process can be altered based on a customer’s attitude, buying habits, and budget. This allows the salesperson to only show the customer items they will like, increasing their chances of making a sale.
With this data in tow, retailers can ensure each of their customers can and will receive a unique and personal retail experience. This positive experience helps to build a positive relationship between customers and the brand. It also encourages customer loyalty, something that is extremely valuable in today’s over saturated world.
Cognitive Dissonance and Buyer’s Remorse
Everyone is familiar with buyer’s remorse (or you should be). It’s that feeling of regret after you’ve made a purchase. Was that the right decision? What if there are better alternatives out there? Did I just waste my money on a worthless product?
But what is cognitive dissonance? Simply put, cognitive dissonance is the inconsistency of two beliefs. This can happen when a consumer sees an advertisement claiming a product is the best, but then when they buy said product they discover it is actually the worst.
Omnichannel retail helps to relieve this dissonance, as well as buyer’s remorse, by giving customers the platform in which to fully research and review the products they are interested in. No longer do they have to believe the advertisement or the pushy salesperson. They can turn to online reviews that are filtered based on their demographic to provide them with the most accurate idea of how the product will fit into their life.
Take the process of buying make-up products, for example. These products are tough to buy without omnichannel retail in place. They are tough to buy in an online-only store because the customer is never able to physically test the product. Although a customer can read the product’s reviews, they still aren’t able to test the product on their skin. What if they have an allergic reaction and can’t return the product? There goes $50+ down the drain. They are tough to buy in a brick-and-mortar only store as well. Yes, the customer is able to test the product on their skin to see how it reacts. But they aren’t able to see the all-day staying power of the foundation. Or see how the lipstick holds up after eating a large lunch. This is where online reviews become essential.
Omnichannel retail fixes this problem. An eager customer can walk into their local make-up store to try the in-demand holiday lip color. By testing the product in the store, the customer can see how they physically like it. Does the cool tone of the lipstick agree with their skin tone? Do they like the matte finish or were they looking for more of a glossy shine?
If they are a fan, they can turn to the store’s mobile app or mobile-friendly website to read the product’s reviews. Does it last throughout the day? Does it stain your lips? Is it worth the money? If the reviews are positive, the customer can be sure they are making the right decision by purchasing this lip color. Buyer’s remorse and cognitive dissonance are eliminated.
The Future of Omnichannel
Omnichannel practices will continue to expand as technology evolves. Data collection will become even more advanced, allowing for super personalization of the entire retail experience. Brands will continue to find ways to creatively integrate omnichannel practices into their retail strategy, to ensure their customers are receiving the seamless, customized, and personalized retail experience that they crave.