Omnichannel Commerce Explained

Omnichannel Commerce Explained

As competition grows, retailers start exploring new ways such as omnichannel commerce, mobile, different channels, and social to improve sales.

However, no two channels interact with one another to provide a personalized and seamless buying experience.

According to The Future of Customer Engagement and Commerce website, this is the case with multichannel commerce which has three main pain points such as less interaction between channels, buyer experience varies between offline and online, and many large retailers having an investment in customized legacy systems.

What we will cover in this blog post:

What Problems does it Solve?

Pain Points of Multichannel Commerce
Pain Points of Multichannel Commerce

In multichannel eCommerce, there is a significant difference between online and physical. When an order is placed on the eCommerce website, the item may not be returned by visiting the physical store of that brand. In multichannel commerce, stores and eCommerce websites don’t share the same stock.

In the age of omnichannel commerce, increasing customer expectations are the main reason why brands are pushed to provide a seamless shopping and customer service experience. In multichannel commerce, the experience is not consistent across all touch-points.

For example, a buyer may see different product prices offline and online.

Retailers invest in technology to optimize their supply chain activities, make data-backed decisions, and effectively manage their business. With a significant amount already invested in customized legacy systems, retailers have to give a second-thought to invest further to buy an omnichannel commerce solution.

In addition to the above-mentioned pain points, the human factor is also responsible. Sales representatives earn commission behind each sale.

However, if a consumer wishes to know more information on a certain product and prefer to buy online, the sales representative may not provide much help.

How is the Retail Industry Evolving?

According to reports by Euromonitor International, Internet retailing is growing at a much higher rate in the Asia Pacific. While Canada and Latin America are facing certain challenges, growth in these areas depends on product assortment and political stability, respectively.

Let’s explore specific areas within the Asia Pacific with the highest growth rate in the retail industry.

Online Retailing in Asia Pacific - Key Findings
Online Retailing in Asia Pacific – Key Findings

In Asia Pacific (APAC), the presence of a mixed audience presents a unique opportunity for a retailer. In rural areas, low internet penetration remains a challenge and is actively being pursued by governments in partnership with large organizations.

In second and third-tier cities, increased spending power of the middle class is the primary reason behind why retail ecosystems and specialist online retailers are interested to expand their area of operation.

Why Should Retailers Embrace Omni-commerce?

A retailer trying to enter a new market or consolidate it’s presence in an existing market, may face a challenge from a retail ecosystem. To survive the competition, a retailer has two options to choose from, such as join an open retail ecosystem or build omnichannel commerce capability. Depending on the capital and capabilities, the retailer can choose one of the options.

According to research by Accenture, 95 percent of millennials want brands to court them actively. Evolving expectations for improved user experience and increasing competition has paved the way for retailers to embrace omnichannel commerce. Retails need to educate themselves on digital commerce trends to pivot wisely.

It’s only when the tide goes out that you discover who’s been swimming naked.
– Warren Buffett, CEO of Berkshire Hathaway

What are the Benefits?

Mini Infographic - Benefits of Embracing Omnichannel Commerce
Mini Infographic – Benefits of Embracing Omnichannel Commerce

There is a significant difference between ecommerce experience for web or mobile and offline. The buying habits of consumers are blurring the line between online and offline channels.

An ideal example is Research Online, Purchase Offline (ROPO) behavior, which emphasizes that retail brands should have a strong online and offline presence.

For a more seamless online and offline buying experience, consumers can be given access to user-generated content such as product and customer reviews while making a purchase in-store.

Making sense of data from the customer’s purchase journey can be a challenge. Omnichannel analytics uses data strategy, retail key performance indicators (KPIs), marketing, and open ecosystem to collect data from different retail touch-points. Using the insights provided by an omnichannel analytics solution, retailers can use the information and devise effective targeted marketing campaigns.

The ability to track costs associated with reverse logistics is an essential aspect of an omnichannel commerce solution. To untangle the complexity, retailers prefer omnichannel logistics to create optimum cost-to-serve metrics and establish reverse logistics infrastructure to bring ease in the lives of consumers. Omnichannel logistics management seamlessly integrates with internet-of-things (IoT) solutions to support real-time visibility of in-transit inventory using sensors to monitor temperature, location, and more.

To impart a better experience, retailers should focus on the implementation of technology for the efficient supply chain management. The omnichannel supply chain gives access to measuring key performance indicators such as inventory and order accuracy.

The omnichannel supply chain also enables a retailer to gain end-to-end visibility and devise enhanced risk management strategies with improved insights.

For the perfect digital commerce experience, omnichannel customer service plays an important role. Retailers can provide an engaging experience by blending live chat on the web and mobile app, social media, SMS, phone call, and more to enable a customer to make an informed decision on the go anywhere and anytime.

Leveraging omnichannel customer service, retailers can further open a window of opportunity to cross-sell and up-sell.

With features like instant QR code generation for product pages, consumers can visit the web-page on their mobile phones and explore more about the product or continue the purchase journey online.

In the age of digital commerce, the millennial-first world of social commerce is at the forefront of omnichannel commerce. By using an omnichannel commerce solution, retailers can know customer’s interests by considering a few basic indicators such as likes, click on URL, and more, in a quantifiable way.

Omnichannel commerce provides insights on customer-centric assortments through which a retailer can offer the right product at the right place.

Using omnichannel analytics, a retailer can further optimize the ideal product assortment by answering complex questions such as what to sell? when to sell? how to sell? which channel to sell on? and which channel to promote the product?.

Answers to such questions enable a retailer to make sense from consumer insights and allocate more resources for products that in more demand.

Omnichannel fulfillment connects distribution centers (DC), third-party logistics (3PL), manufacturers, stores, partners, and more.

Using the omnichannel order management system (OMS), a retailer can optimize the process as well as make informed decisions to cut costs and improve customer experience.

How to Create the Perfect Ecommerce Strategy?

Omnichannel Commerce Retail Strategy – Macro View

The goal of an omnichannel commerce retail strategy varies from one retailer to another. For a maximum number of retailers, the goal of an omnichannel retail strategy is to improve sales or improve ranking of ecommerce website in search results but for some, the goal is to focus on different aspects of the entire purchase journey or leverage technology such as 5G for retail.

For simplicity, we have divided the entire journey into three different phases such as before an order is placed, during the purchase, and after an order is placed.

In this phase, the retailer focuses on goals to improve product discovery and engagement. Different channels communicate seamlessly in this phase to enable the consumer to make an informed decision.

For example, if a person was about to place an order on a mobile app but couldn’t and closes the app, an SMS can be sent immediately as a gentle reminder to finish the checkout process.

A large part of the omnichannel commerce retail strategy can also be dedicated to sale festivals such as Black Friday and special discounts to boost sales.

A retailer has to offer just enough freedom to a consumer to impart the perfect omnichannel commerce experience. Imagine a prospect walking in the store and selecting a product. If the right technologies are in place, he/she can seamlessly view the reviews available online for the product.

At the same time, smart product assortments can also be included as a part of the omnichannel commerce retail strategy to offer the right product at the right time. If the retailer has a call center in place, then resources can be allocated to provide a more guided online shopping experience.

Order fulfillment is directly associated with customer experience. In this phase, many retailers prefer cutting costs without compromising customer experience by optimizing their delivery process.

This is one of the many reasons why retailers invest in an omnichannel commerce solution in the first place. Another important area of omnichannel commerce retail strategy is to return shipping and supply chain optimization. This area has a tremendous scope of improvement and remains one of the most challenging fields in supply chain management.

Different Components of a Software Solution

Components of a Basic Omnichannel Commerce Solution

A basic omnichannel commerce solution consists of eight different components such as user interface, customer management module, marketing management module, order management system (OMS), product management module, offline to online and vice-versa module (in-store), report generation module, and data module to connect different analytics and third-party applications.

Now, let’s look at each module briefly.

Different channels like web, mobile, chat, in-store, and more, should provide the same user experience (UX). Buyers shouldn’t feel the difference when shopping offline or online with a brand. Here, the focus should be to provide consistent and seamless UI and UX throughout the purchase journey.

To operate a large retail enterprise, an extensive customer management module is required. As a part of an omnichannel commerce solution, the customer management module should enable a retailer to gain a 360-degree view of the customer on each sales channel whether it is ticket generation or database import.

Introduce the best capabilities from artificial intelligence and big data to make informed marketing decisions and refine the marketing strategy.

A marketing management module enables a retailer to gain insight on the most critical aspect of omnichannel commerce such as reasons behind cart abandonment.

Important features within an order management system include routing, fraud, splitting, cancellation, return, and more. The feature set varies if the business is B2B or B2C.

Furthermore, the order management system enables a retailer to gain real-time insight into the status of inventory and fulfillment management.

Utilizing different algorithms under artificial intelligence, the product management module can assist a retailer display recommended products for better conversion rates.

This module also adds the capability of dynamic pricing for consistent price optimization across different channels such as web and in-store.

In-store management includes point-of-sale (POS) system and different omnichannel marketing techniques as key components to reduce the impact of online to offline customer journey. Data also play a key role to formulate a better assortment strategy.

Much freedom is provided to different team members to view specific and relevant key performance indicators (KPIs) using a custom report generation feature. With the right data, greater visibility can be gained in different areas, including fraud detection patterns using artificial intelligence.

Leverage integrated data management from different solutions such as CRM, ERP, POS, and more. Such a central solution is essential to scale and if a retailer is planning to start small by running a pilot, then the data module acts as a solid base for future development.


Omnichannel is no longer a buzzword used by industry professionals. For a retailer, omnichannel is the future which requires significant investment. Embracing different capabilities such as artificial intelligence, machine learning, and automation is the need of the hour for a retailer to stay relevant.

With the right omnichannel commerce solution, a retailer not only adds new capabilities but also saves time and effort in the process.

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