The first omni-channel in the world was at the American department store Macy’s.
Macy’s announced the “Omni-Channel Declaration” in 2011.
The information management system of the physical store and the EC site is unified, and the customer is followed in every way to prevent the loss of sales opportunities.
This effort has increased customer satisfaction and not only improved profits for Macy’s but also enabled efficient inventory management on a company-wide scale.
This time, we will introduce the basic knowledge and merits of omni-channel, and the preparations required before introduction.
table of contents
- 1. The basics of omni-channel that I can’t hear anymore
- 2. What’s the difference? Differences between omni-channel and O2O
- 3. Benefits of omni-channel
- 4. Preparations required for omni-channel strategy
- 5. Increase customer satisfaction and increase profits with omni-channel
The basics of omni-channel that I can’t hear anymore
Omni means “everything, everything” and channel means “route”, which means a place or means of contact with consumers for sales activities.
● What is omni-channel?
Omni-Channel Retailing is a strategy that integrates all of your company’s sales channels and leads to sales promotion. It is an evolution of the multi-channel strategy that uses a combination of multiple sales channels. In multi-channel, we prepare multiple sales channels for our customers, but those sales channels are not linked and we sell individually.
On the other hand, omni-channel will build a system that integrates product management, customer management, logistics, etc. in all sales channels to enhance the customer’s purchasing experience.
A sales strategy that integrates all sales channels is the service and customer data of all sales channels that the company conducts, such as physical stores, online shops, corporate sites, mail-order sales of catalogs, smartphone apps, SNS such as Facebook, and Instagram. It is to manage and serve customers in a unified manner. Sales channels also include mail-order and ordering leaflets, catalogs, call centers, mass media advertisements, and news releases.
By integrating sales channels, we create an environment where customers can purchase products in the same way anywhere without being aware of the differences in sales channels.
Once your omni-channel strategy is in place, you can reach your customers through channels in all sales channels and deliver what they want. Customers see all sales channels with the same brand name as the same shop, so they are free to view and order products in the same way on any sales channel, and to choose how to receive and pay.
For example, you can receive products purchased from the smartphone app at an actual store and settle at points at an online shop, or receive products ordered at a store at a convenience store near your home. Customers can buy the way they like and receive it at any time and place.
● Background of the expansion of omni-channel
Behind the great expansion of omni-channel is the spread of smartphones. Consumer behavior is diversifying as smartphones allow consumers to stay connected to the Internet at all times. If you have a smartphone, you can easily get product information on the website. Product reviews spread quickly on SNS. You can compare the prices and services of multiple shops and purchase the same product at the cheapest shop. You can now shop easily and efficiently anytime, anywhere.
Therefore, companies are also adopting an omni-channel strategy, aiming to increase customer satisfaction and win the competition with other companies.
What’s wrong? Differences between omni-channel and O2O
Sometimes O2O and omni-channel are considered the same, but the two have completely different meanings and aims.
● What is O2O?
O2O is an abbreviation of “Online to Offline”, which is a strategy that links online and offline to guide purchasing behavior at physical stores.
By sending coupons and DMs to customers who have registered as members online, and by creating an attractive point system, we will promote store visits and purchasing behavior. Web information in O2O is for attracting customers to physical stores, and one-way sales channels are used from online to physical stores.
Although it has the effect of acquiring new customers and guiding them to physical stores, O2O is not suitable for developing repeat customers and customers with high unit prices. Suitable for making short-term profits. If the method of issuing coupons or DM does not fit your brand image, your O2O strategy can be counterproductive.
● Differences between omni-channel and O2O
Omni-channel allows you to seamlessly serve customers on any sales channel. Information flow is not one-way, and data is centrally managed on all channels. Since customer satisfaction increases through purchasing behavior, it is possible to retain existing customers and acquire repeat customers. In particular, you can acquire customers with high unit prices and make long-term profits.
Benefits of omni-channel
What are the benefits to enterprises of realizing omni-channel?
● Can analyze marketing strategies
Omni-channel can analyze data to develop marketing strategies and increase their return on investment. Since customer information is centrally managed at physical stores and EC sites, it is possible to analyze various data such as the behavior history of each customer and the tendency of purchased products. Therefore, we can carry out detailed marketing tailored to each customer and provide “the products that customers want” from our products. This will increase sales and customer satisfaction.
● Showrooming measures
Showrooming is the buying behavior of buying at a cheaper online shop, even if you are checking the item at a physical store. With the spread of smartphones, online sales have increased, so reducing showrooming has become a major issue in physical stores.
However, if omni-channel is realized, the same brand will be sold regardless of which sales channel is purchased.
● Reduction of sales opportunity loss
By unifying the management system, it is possible to reduce the cost of building and maintaining the system and streamline the management system. In addition, inventory management can be centralized, minimizing the loss of sales opportunities due to out-of-stock.
Preparations required for omni-channel strategy
To realize omni-channel, it is indispensable to unify systems such as customer management and product management on a company-wide scale. I will tell you what kind of preparation is necessary.
● Eliminate the awareness of enclosure for each channel
If you carry out sales activities for each sales channel, you may develop competition between sales channels. Omni-channel emphasizes “how to get people to buy” regardless of which sales channel they sell. To do this, all sales channels need to work together to change the mindset of the organization and its employees.
● Integration of brand image
Consolidating sales channels means that all sales channels must present the same image. Depending on the brand, the image may change depending on the sales channel such as physical stores, EC sites for PCs, mobile sites, smartphone apps, and mail-order catalogs. However, differences in the brand image can be confusing to consumers. Narrow down which brand image is the best and do the right branding.
● Introduction of the customer management system
Omni-channel centralizes data such as customer information, customer service history, purchase history, and product browsing history on EC sites for all sales channels. By referring to the data in the same way for both the person in charge of the actual store and the person in charge of the EC site, unified customer service becomes possible, but for that purpose, it may be necessary to introduce a new customer management system. Hmm.
In addition, by introducing a customer management system, product information, inventory information, point programs, etc. can be integrated to enable smooth customer response.
Increase customer satisfaction and increase profits with omni-channel
Realizing omni-channel can be quite costly.
It is necessary to build a customer management, product management, inventory management, and point management system that integrates all sales channels, and to introduce new hardware in some cases.
It will also cost education to reform the mindset of organizations and employees to conduct company-wide sales activities without focusing on sales by sales channel.
However, if omni-channel can be realized, it will lead to customer retention and an increase in customer unit price, and sales can be expected to increase.
Omni-channel is an important issue for retailers.
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