The common challenges of omnichannel retailing highlight something very important to acknowledge—omnichannel isn’t easy to get right.
The rich benefits of adopting an omnichannel strategy can blind retailers to the numerous pain points that can cause omnichannel strategies to go wrong. With so many moving parts and critical considerations, it can be difficult to connect the dots.
Chaotic, disconnected customer experiences; stockouts and overstock; pricing inconsistencies. These challenges in omnichannel retailing might be hazardous, but they’re easy to spot and—with the right solutions—easy to overcome.
Understanding the importance of omnichannel retailing
The digital shift has changed the way that we shop forever.
Omnichannel retailing taps into the modern customer demand for intricately connected, seamless shopping experiences in a way that its predecessors, single and multi-channel retail, can’t do. In fact, retailers using omnichannel strategies can generate a 494% higher order rate than businesses using single-channel models.
The traditional single-channel retail model was replaced in popularity by multi-channel retail some time ago. Multichannel retailing gives customers more than one channel to shop with a brand. This could be a combination of online and offline channels such as a website, a brick-and-mortar store, a mobile app, a social channel, etc.
But there’s still a serious problem with multi-channel retail: all of these sales channels exist in silos.
Omnichannel retailing uses technology to unite your online and offline touchpoints, ultimately creating the unified shopping experiences that customers desire. Customers can seamlessly bounce between devices or channels, enjoying consistent, cohesive experiences across your ever-expanding offline, social, and ecommerce channel mixes.
From increased revenue to customer retention, omnichannel drives considerable benefits in comparison to single and multi-channel retail models. That said, if you’re not careful, the challenges of omnichannel retailing can thwart your ability to achieve these benefits.
Overcoming the challenges of omnichannel retailing
Here are some tips to help you overcome the main challenges of retail omnichannel strategies.
Providing consistent customer experiences in multiple channels
Customers don’t care if they’re shopping in-store, on your website, or via your Instagram channel. They expect high-quality customer experiences at every touchpoint. They also expect the product information that they view on every channel to be consistent.
If any of your channels fail to meet expectations, you risk losing high-value customers. So, what can you do?
Many businesses with omnichannel objectives adopt a headless CMS (as opposed to ecommerce website builders) as they offer a greater degree of flexibility. Content can be re-modeled and optimized to suit different platforms, improving brand consistency.
But to create truly immersive, integrated customer experiences, just take a look at the brands using augmented reality.
IKEA, for example, enables customers to visualize how products will actually look in their homes using an augmented reality “Place in Your Room” feature.
On the other hand, Sephora uses AR-enhanced mobile devices to allow in-store customers to virtually “try on” various products. Plus, if they like a shade that isn’t currently in stock, they can simply order it then and there for collection or delivery.
Preventing stockouts and siloed inventory management
Inventory management is a high-priority pain point of omnichannel retailing. Poor inventory synchronization across your different channels skews the integrity of your inventory data, leading to stockouts, overstock, poor demand visibility, and other issues.
Of all these problems, stockouts are not only the most common but also the most crippling, leading to lost revenue and poor customer experiences. It’s for these reasons that reducing the likelihood of stockouts is the number one inventory optimization objective for 62% of businesses.
To overcome this challenge, use order management software to centralize inventory management into one system. With the ability to automate order fulfillment and track inventory levels in real time, you can increase the visibility of data across channels to provide customers with the most up-to-date inventory information.
Achieving a unified view for customer insights and pain points
To create a truly omnichannel experience—one that seems to intuitively know what your customers' needs, preferences, and pain points are at every touchpoint—you need access to customer data. That said, the more channels you have, the more siloed data you accrue from different sources.
The data you collect from your website, customer service chatbots, social media analytics, email campaigns, etc., needs to be centralized into a single location. This is to maximize its accessibility and real-time value.
A customer relationship management (CRM) system will do this. Every piece of customer data you collect is stored in a singular platform, regardless of where this data originated from. So, you can build comprehensive customer profiles that you can use to tailor experiences.
Gain immediate insights into where your customers are in the sales funnel. Intimately understand their buying intentions and pain points, and use this knowledge to build comprehensive customer profiles, curate personalized, consistent shopping experiences, and continuously re-engage customers after purchase.
Integrating various systems and technologies
Siloed systems and technologies create channel conflicts. For example, if your offline point-of-sale (POS) system can’t communicate in real-time with your online POS, your customer experiences will be ruined by inventory and sales data inaccuracies.
The same goes for your back-end systems and technologies. A disconnect between online and offline purchase orders can result in poor financial and resource visibility, leading to poor budgeting decisions.
Omnichannel integrations aim to synchronize data flow within and between online and offline channels. So, everything from purchasing and inventory to transactions, fulfillment, and reverse logistics should be unified to deliver seamless communication.
One way to achieve this is by adopting cloud-based systems. Cloud-based purchase order software, for example, centralizes your disparate purchase order documents into one electronic system and automates the creation, sending, and tracking of purchase orders.
So, there’s no need to use paper-based processes—even for your offline stores—and you can enjoy improved data accuracy thanks to the reduction of manual data entry.
Implementing smooth deliveries, returns, and exchanges
Omnichannel customers expect smooth checkout, shipping, and delivery processes. And they also want to be able to return and exchange products with ease, regardless of the channel they purchased them from. One of the biggest challenges of omnichannel retailing is making these processes as painless as possible.
Order management software is the solution, here. As well as centralizing fulfillment across channels, order management software can automate and track the fulfillment process from order processing right through to shipping, delivery, and returns. So, you can not only provide reliable shipping and delivery estimates but actually come through on your promises.
Allocating balanced resources to various channels
It’s a common phenomenon—once a store adopts an omnichannel strategy, they drive more resources into their online channels and relinquish stock, employees, and budget from their physical store. This has the tendency to backfire, leaving physical stores unable to meet product demands and customer service expectations.
Allocating the right balance of resources and budget across your channels requires intricate planning, observation, and data analysis. Map your customer journey to establish where customers interact with your brand and what their reasons are for doing so. This will enable you to align the resources granted to each channel with the needs of your customers.
Maintaining consistent pricing and promotions across channels
Failing to coordinate and communicate pricing and promotions across your different channels will almost certainly result in unhappy customers. And not to mention unhappy customer service employees, too, as it’s them who will bear the brunt of customer dissatisfaction.
The solution? Use a product feed platform, such as GoDataFeed, to automatically feed product prices to all of your sales channels—marketplaces, social commerce platforms, search engines, your website, and mobile apps. So, customers will always get the most updated price.
Screenshot taken from godatafeed.com
As for your promotions, these need to be clearly communicated across your channels. Even channel-specific promotions (such as an exclusive in-store promotion) should still be advertised on your online channels to give all of your customers a fair chance to take advantage.
Ensuring consistent staff training and service quality
Omnichannel customer service can be particularly difficult to streamline if employees don’t have the right training or resources. But in a climate where 48% of customers in the last year left a brand because of poor customer service, this isn’t something that you can afford to let slide.
Aim to maintain high customer service quality across your customer service channels (telephone, email, social media, etc). Train agents on how to use omnichannel-enabling technologies, such as IVR systems and CRMs. And don’t forget to provide customer service training to boost interpersonal skills and guarantee that both online and in-store customers receive friendly, fast, and sufficient customer service.
Maintaining data privacy compliance and security
Data privacy and cybersecurity become harder to maintain when you adopt an omnichannel retail strategy. To provide customers with tailored, unified experiences, omnichannel strategies require you to obtain more endpoints and data than ever before, increasing the threat of data breaches.
Maintain strict data security best practices throughout your company. You can do this by:
- Applying point-to-point data encryption.
- Using AI and machine learning to automate threat detection and fraud prevention.
- Implementing strict authentication methods (e.g., single sign-on, biometrics, or multi-factor authentication).
- Restricting user access privileges and permissions.
- Providing company-wide cybersecurity training to help employees spot phishing attacks, social engineering, and other malicious threats.
Tackle omnichannel challenges head-on
With the right technologies, systems, and strategies, overcoming the challenges of omnichannel retailing should be relatively painless. Saying that omnichannel strategies grow significantly more complex as your business grows and adopts more siloed channels and data.
So, adopt the right technologies and tackle omnichannel retail challenges sooner rather than later.