While major retail brands were developing and executing their omnichannel strategies over the past decade, the small and medium merchants stayed on the sidelines. eCommerce businesses operate today in very different conditions than a decade ago. We witness new marketplaces, new social media players, and convergence between media advertising and selling marketplaces. Omnichannel strategy is essential for the future survival of any size commerce business, regardless if it operates in B2C or B2B markets.
The recent pandemic dramatically accelerated omnichannel transformation across all commerce segments.
- 76% of customers prefer the ability to shop on different channels.
- 87% of business buyers and 83% of consumers expect flexible shipping/order fulfillment options.
- 80% of business buyers and 75% of consumers expect consistent department interactions.
- 74% of business buyers and 65% of consumers expect all company representatives to have the same information about them.
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What is omnichannel commerce, and how is it different from multichannel?
Omni means all, and omnichannel commerce assumes seamless and integrated customer experience across all channels. Regardless of where customers started their shopping journey, they should be able to complete the purchase using any channel without obstacles.
Multichannel commerce also uses multiple channels for sales and marketing, but each operates independently. Customers starting in one medium must stay in it and cannot easily use other channels for store pickup, return, or customer service. The multichannel model was prevalent among traditional brick-and-mortar retailers. It was common practice to create an online store as a separate operating unit without integrating it with legacy in-store sales and customer service operations.
Omnichannel commerce delivers superior customer experience, advertising effectiveness, and operational efficiency than a simple multi-channel expansion. At the same time, it requires more sophisticated business and technology processes.
Three vital omnichannel strategies for small and medium merchants:
1. Reduce your business risk with omnichannel practice
It is a noticeable trend that merchants who limited their advertising and sales only to one or two channels experienced high sales volatility, stagnation, or decline. Changes in search or targeting algorithms, shifts in marketplaces, or social media platforms’ popularity may disrupt sales if a merchant relies on one channel predominantly.
Conversely, merchants, who began the omnichannel approach with phase implementation, have dissent year-over-year growth.
Here are some steps to reduce your risk:
- Diversify your marketing and sales channels.
- Integrate marketing and sales data across all channels in easy-to-understand dashboards and reports.
- Tune your marketing strategy and adjust tactics accordingly to the changing trends.
2. Establish a basis for your future growth
By transforming your commerce business to omnichannel operations, you build a foundation to sustain and accelerate your sales growth.
- Reach a broader customer base when you market and advertise in multiple channels.
- Increase your sales conversion rates with cross-channel retargeting.
- Improve customer loyalty and repeat sales with seamlessly integrated purchasing and service experience.
- Increase inventory turnover – The higher the inventory turnover rate, the lower the holding costs—thus, boosting your profit. The right omnichannel process makes distributing the inventory for each channel much more manageable.
3. Increase the exit valuation of your business
As a small business owner, you may consider an exit and selling your ecommerce business at some point. In such circumstances, you want to preserve and increase your business’s valuation.
Here is s typical formula used to assess the value of a small ecommerce business:
VALUATION OF BUSINESS = Earnings x Earning Multiple
Depending on the business size and shareholder structure, accountants may calculate earnings using the Seller’s Discretionary Earnings or EBITDA methods.
The eCommerce business Earning Multiple usually is between 2 and 4.5, and it depends on many factors, including the maturity of omnichannel operations. A business operating a sophisticated marketing and sales omnichannel strategy would have a much higher multiplier than a company working with a single sales channel and only Google advertising, email marketing, and organic search.
Steps to level up your omnichannel maturity score
Review the current state of data sharing across sales and marketing channels.
Here is a typical list of channels across business functions:
- In-store sales
- Video chat
- Online store
- Mobile app
- Buy buttons – blog, email, social media posts
- In-store self-checkout
- Google Ads (Search, Display, Shopping)
- You Tube
- Social media platforms
- Organic Search and SEO
- eMail marketing
- Traditional media (print, TV, Radio)
- Direct marketing
- IVR and voice recognition
- Messengers (Facebook and others)
- Video chat
Find broken links in customer experience scenarios and identify gaps in the existing data integration processes. Provide higher priority to data that affect customer experiences, such as customer profile, order, and service history. Check if customers who started a shopping journey, for instance, in the mobile app, may complete the purchase in another self-service or interactive channel.
Examine your current tools and technology platforms to determine if they can support omnichannel practices. If your legacy ecommerce system is a barrier to moving forward, now is the time to upgrade it to a modern omnichannel-ready platform such as BigCommerce, Shopify, Salesforce Commerce Cloud, or others.
Prioritize projects and investments
Give priority to projects that affect customer experience and create necessary data and technology foundation for the subsequent phases.
Expand your marketing and sales channels incrementally, and measure the return on media spent. Don’t follow common media trends blindly. Use data and analytics to align your strategy with your target market and customer segments.
Select the right partners to help
Partnering with expert consultants and services would save you time and money by avoiding costly mistakes.
Omnichannel operations have more complexity and sophistication than traditional multichannel commerce. An expert partner would help you prepare a roadmap, technology implementations, and knowledge transfer necessary to continue your operation at a new level successfully.
- The commerce transition to the omnichannel model is not a trendy hype but a fundamental industry shift to the new way of conducting commerce. Multiple factors drive this transition, including generational changes in customer expectations, new commerce and marketing platforms, accelerated development of AI and big data technologies.
- Don’t let your fear of unfamiliar omnichannel territory stop you from moving forward. It is not as complex as you might think. With the right tools and partner guidance, you will thrive.
- The organization’s level of omnichannel maturity affects your survival risk, sales growth potential, and future value of your business.
- There is no excuse to delay the execution of your omnichannel strategy in 2023. There are technologies and services available to start implementing omnichannel practices by businesses of any size.
- Those that adopt omnichannel practices and create the necessary foundation for the new era in commerce will be rewarded; those that don’t will face a steep challenge and risk their business survival.
- Engage with expert partners to avoid costly mistakes if your in-house resources are insufficient.