Key Omnichannel Strategies for your Retail Business
In today’s world, typical shopping experience looks a lot different than it used to 10 years ago. Customer begins shopping in a store, than checks some information on the mobile phone, and in the end decides to finish the purchase online, using a laptop. This is referred to as omnichannel retail, and it’s supposed to provide unified shopping experience to customers across different selling channels. These channels include branded online stores, brick-and-mortar stores, marketplaces (like Amazon), social media, and etc. Which means that implementing omnichannel strategy is possible for companies that have both physical and digital presence.
Why is omnichannel essential for today’s business?
Well, the answer is simple, because shopping experience isn’t linear any more, most of the customers engage with brands using more than one channel. They do their research on the Internet, check social media channels, buy in-store or online. They have many options. Which is why omnichannel is a good strategy; due to the fact that it can help you make contact point a conversion point.
Before deciding on the omnichannel strategy, retailers first need to know and understand their target audience. Who are they, where do they shop (offline or online), and etc. Once retailers answer those questions and find their target audience, they’ll be able to create a better offer for them. Moreover, it will also help them to define better strategies and save time and money, because they won’t be investing in a channel that their customers aren’t using. For example, targeting Instagram can be irrelevant for certain retailers, so there is no need to invest any resources in it; for the other ones, however, it might be the most important channel.
Omnichannel allows retailers to focus on personalized shopping experience for each customer, and personalization is one of the most important things in e-commerce today. Therefore omnichannel retail has an important role in the e-commerce. When it comes to pricing in omnichannel retailing, there are three approaches that retailers can take into consideration. They can focus on each channel individually, have omniprice or have mix of the first two.
1. Channel-specific pricing
First, we have channel-specific pricing approach. Here, every channel is treated differently. The prices in brick-and-mortar store aren’t going to match the ones in the online store. One of the reasons for this is that not all channels have the same operational costs. Therefore, retailers may be able to offer a lower price online and still have the desired profit (or vice versa). Other reason is that some specific channel might be used by the customers, but not in a great extent.
Problem with channel-specific pricing is that customers can grow frustration when they see the inconsistencies in pricing. But on the other hand, this might lead to increase in profit for certain channels.
2. Omnichannel (uniform) pricing
Next one is omnichannel (uniform) pricing approach. When using this approach, retailers decide to have the same prices on each channel, meaning the prices will be the same in brick-and-mortar stores or in online stores, worldwide. This really does lead to unified shopping experience across all channels and eliminates the research customers need to conduct to see which price works best for them, if there are any special offers, etc.
Omnichannel pricing approach is good for retailers who want to build a strong connection with their customers and keep them for a long time. Of course, there are certain hardships when it comes to implementing the right strategy. Therefore, retailers first need to consider how to keep track of competitive prices and adjust their own prices if any changes happen. Also, keeping the prices on the same level across the globe is important – it’s hard to give discounts in one part of the world, and not in the other. However, the northern and southern hemisphere don’t match when it comes to season, which is when this problem becomes relevant. For example, if you are selling seasonal wear (like coats or swimsuits) you can’t give discount all over the world, because you’d be killing your own sales in some parts of the world.
3. Hybrid pricing
Last approach is hybrid pricing approach. Basically, it’s omnichannel pricing with exceptions. As for the certain channels, you’ll add something that gives them more value; like a loyalty card for in store purchases or some special deals for online ones. The easiest way to explain how hybrid pricing works would be with an example. One of the best ones is ‘My Starbucks Rewards’ system that offered by Starbucks. Customer can download the app, which will allow them to access certain benefits that non users won’t have. Like birthday reward or ordering coffee via app and picking it up in store.
Implementing omnichannel strategy takes a lot of time, effort and resources. It’s not just simply putting the same price on your product across all channels. You have to think about all the operational cost, and make sure to include them in the price. When you choose to price your product differently across different channels, huge discrepancies can appear. And when using hybrid approach, you need to think about which channel should be differentiated. To apply omnichannel in retail isn’t a simple task, but it’s one worth doing – because, customers are everywhere, and they must be satisfied regardless of the channel they’re using.
Which one of these three omnichannel pricing strategies is most suitable for your business? Please let us know – we’d love to hear your thoughts on this.