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Retail technology: Harnessing opportunities in omnichannel and multichannel retailing

22 August 2022

Consumer habits are changing. Increasingly customers are looking to make purchases from their favourite retailers online. Retailers who can meet this demand by offering different channels for consumers to purchase their products from have the opportunity to significantly increase their customer base and brand awareness.

This is where omnichannel and multichannel retailing comes in. While multichannel means you sell your products from more than one channel (for example online and in-store), omnichannel is the process of creating a seamless experience between online, in-store and any apps you may use, so that the look, feel and experience is the same across all channels.

Whether you use multichannel or integrate into omnichannel will depend on your size and resources. Large retailers (for example supermarkets) often invest in omnichannel – providing a seamless experience across various channels so that if a customer starts shopping online they can then pick it up again later in the app or in-store.

Even smaller retailers, however, will want to consider some sort of online offering so that they can maximise their potential customer base, many of whom are not engaging in bricks and mortar in the same way anymore. “This is especially the case with younger consumers who are increasingly making almost all of their purchases online,” says Justin Martin, BDO Retail Sector National Lead. “Going online also means your customer base is no longer geographically constrained to places near your bricks-and-mortar store.”

The type of multi or omnichannel retailing you explore will often depend on your business size.

Where to start with your multichannel and omnichannel journey

No matter your size, it’s important to start from a good foundation when you move to other channels. Some key questions to think about include:

  • How do I get my brand across to create a reasonably consistent feel across various channels?
  • How does your new channel tie into your strategy and what your brand is trying to sell? If your new website is not aligned with your strategy then how is it serving your business?
  • Are your back-end systems able to support a shift to multi/omnichannel retailing?
  • If you’re already online, how can you find other ways to reach your customers?

“Most customers aren’t expecting a glossy or highly polished experience, but they do want a website that’s easy to use and provides correct information about your stock,” explains Divya Pahwa, BDO Retail Advisory Associate. “You may have omnichannel in place, but if you don’t have the right systems to back it up then the customer experience will fall apart. For example, are you able to accurately track stock, inventory and shipments? You want to try and avoid situations where your inventory management system is not up to date and a customer buys something online that you don’t actually have in stock. This is especially important given the current supply chain crisis.”

When it comes to online-only retail, you may wish to consider other ways to reach your customers. “Particularly with clothes, many consumers are reluctant to buy unless they’ve had the opportunity to try something on first. This is difficult with online-only retailing, but pop-up stores are a good way to show consumers the quality of your products without having to take out permanent bricks-and-mortar premises,” says Anna Kuzmich, Retail Advisory Associate.

Likewise when using online shopping it’s essential to ensure an easy returns process – if a consumer feels like it is too much trouble to return then they may stop purchasing from you altogether.

For more technologically-advanced retailers, apps are a great way to create more cohesion between online and in-store. Some retailers have the option for customers to scan bar codes in-store to get more information, and then they can finish their purchase online when they get home if they wish to.

Chat bots are also becoming increasingly popular as a way for retail businesses to quickly and instantly answer customer queries.

Learning from the insights provided by consumer data

“The advent of online retailing means retail businesses now have access to a lot of information about their customers,” explains Greg Harford, Chief Executive, Retail NZ. “This presents many opportunities for retailers, who can more fully understand their target markets’ shopping habits, as well as provide personalised recommendations and offerings based on these trends. Loyalty schemes are also an option to provide a strong customer experience while also gathering important business insights about consumer habits. It’s important to note, however, that with more data comes more responsibility, and retailers must ensure they have strong privacy policies and processes in place to manage this data correctly.”

Retail technology is so important for providing a great customer experience. It can also be a cause for stress among retailers – business systems and technology challenges was rated second as the key stressor negatively impacting wellbeing among retail business owners in our recent BDO Wellbeing in Retail report.

While investing in retail technology, including e-commerce and new channels for customers, can seem like a significant undertaking, the opportunities are well worth it. If you’re looking to upgrade your systems or invest in a new channel, BDO’s retail advisory team can help. We have specialist retail information systems advisers who can make the transition to your new channel or system seamless. Our retail team also provides a range of business advice, including strategy, business planning, financial management, performance improvement, risk management, corporate finance, process review and tax services. Reach out to your local office today to learn more.

 

This is the third article in our retail thrive series. Read our other articles:

Supply chain

Staffing