Explore - Experience - Excel

Understanding Omnichannel

Understanding Omnichannel
Prof. (Dr) S. Shyam Prasad
The internet along with smart phones is changing the retail business. The technology has enabled the consumers to shop at their will and pleasure. This has given rise to new shopping experiences to the customers. These emerging experiences have forced the retailers to reach the customers in newer ways. A new way of retailing by seamless integration for stores, e-commerce, mobile apps and social media is known as ‘Omnichannel’. This article discusses the features of omnichannel by bringing out the differences with multi- channel retailing.
When something is new, we often see it being spelt in different ways as was the case with Ecommerce, eCommerce, or e-commerce. We are in a similar situation with “Omnichannel”. One can see it being spelt in different ways – Omni Channel, Omni-Channel, Omnichannel etc., which goes to show that the concept is new and we are yet to decide on the correct way to spell it. In this article, we move away from the spelling controversy which soon will resolve by itself and try to understand the concept. “We hold the belief that omnichannel is something new and notable, even revolutionary, not just a marginal evolution of existing thinking” (The creators of CloudTags, 2014).
With the increasing proficiency in the newer technology, the consumers are able to compare prices of the products and buy them through different channels. These connected consumers are empowered to shop any time from any place of their choice. Here comes the concept of omnichannel. Omni comes from the Latin word “Omnis” which means “all”. Omnichannel is the seamless integration of different channels to provide true continuity of shopping experience. For this reason, many say that omnichannel is: ‘cross channel being done well’. However, omnichannel goes beyond multichannel in that it goes beyond a single brand’s universe. An ideal omnichannel should allow a customer to perceive everything and “allow them to own their data and experience, then give them the ability to use it to guide creation and context of every future experience”. (The creators of CloudTags, 2014)
As mentioned earlier, omnichannel is the seamless integration of different channels to provide true continuity of shopping experience. One would have come across many instances wherein the online and offline experiences are divided. This is because, many people start their purchasing by going online to browse and see what is available and compare them sitting in the comfort and privacy of their place and go to a physical store to make the purchase. Thus emerges the need to have a continuous experience, not only with a single brand but across brands, across different channels and across various devices and all these completely personalized. This is omnichannel. The systematic integration of various channels provides unmatched buying convenience irrespective of whether the customer is in a real or a virtual world.
Omnichannel is a potent tool for both the customer and the retailer. The problems such as showrooming and webrooming are nearly non-existent in omnichannel. It also provides the retailers with vast opportunities to increase the sales and create brand awareness and store loyalty. “Up to 25% of recent online or mobile purchases in the UK and Germany involved products which customers could not have purchased locally (Deloitte, 2014). A consumers survey conducted by Deloitte has shown that ‘frequent shoppers and those planning high-value purchases are more likely to use a range of channels for their purchases, so a presence across channels allows retailers to capture this market segment’.  The impact of omnichannel is shown in the figure 1.

The retailers with presence across varied channels have succeeded in increasing the awareness of their products and have captured up to 195 million pounds sales in UK and 380 million euro in Germany which is 8% and 3% of total sales in the respective markets[1]
Retail marketing departments across the United States are in the midst of a turning point, where old ways of reaching the consumers are giving way to a more modern, digital approach (Retail Me Not Inc, June 2014). At the same time, these Retailers appear to be challenged in their ability take full advantage of digital marketing opportunities.[2]The scenario in India is also not very different. In fact, Kishore Biyani, who pioneered modern retail in India and chief executive of the Future Group, told Reuters in an interview that he can’t keep up with web sites like Snapdeal and Flipkart when it comes to spending money to entice shoppers to buy online. Traditional retailers, in order to keep up with the trend are opting for the tie-ups with websites such as, Inc (AMZN.O) and Snapdeal to avoid huge investments. However, this strategy would not be good in the long run as internet penetration is increasing in India. This necessities and leads to omnichannel. “Change before you have to.” – Jack Welch, former chairman and CEO, General Electric. Omnichannel retailing is at a nascent stage in India and retailers have to work harder towards achieving their goals of maximizing revenues through this model (Vashishta & Balaji, 2014 Vol 3, No 1).
Two important challenges are in omnichannel are:
1. Data Management – if the data across different channels are not properly synchronized it will lead poor efficiency. It could jeopardize customer satisfaction and poor inventory control.
2. Supply Chain Management – creating cost-effective supply chain. Living up to the promise of delivery has to be managed well. No wonder then Amazon is experimenting with drone delivery system in India.
In order to overcome the challenges of omnichannel the retailers need to keep the following in mind:
1. The retailers need to develop an integrated IT platform to provide seamless experience to the customers.
2.  Information across channels should be consistent.
3. Retailers need to monitor the consumers comfort level of with the technology that is being used.
Devangshu Datta, founder of a marketing and retail research firm, Third Eyesight, wondered whether retailers have the necessary expertise to meet customer demands and go omnichannel. Different retail functions will need to undergo changes. Retailers who are not adapting to the changing environment will be left behind. Shoppers Stop Managing Director Govind Srikhande said, “Globally, several departmental stores, such as Macy’s, John Lewis or Sacks have come back strongly through omnichannel retailing. About 9-20 per cent of their overall sales come through this channel.” He said this trend would slowly catch up with Indian retailers, too. The Mumbai-based retailer that got into e-commerce three years ago recently revamped its online channel.
A research by Microsoft Azure and MartJack Enterprises has found that 62% of the retailers consider Omni-channel to be very important for their business and 45% of the retailers surveyed are looking to start their eCommerce operations within the coming year and 39% of retailers expect 6- 10% of their sales to be driven by online Omni-channel avenues. As per a newspaper report Indians are now spending more time online than on reading newspapers or watching television and this offers a vast potential for retailers to go omni and the click and mortar have the power and the reach of omnichannel interaction.
Digitization is changing the playing field and the rules of the game. Analytical and processing capabilities have grown in leaps and bounds. Smart mobile phones have made the access to information very easy. With the increasing level of computer knowledge among the Indians, omnichannel retailing as reported by newspapers, is catching up.
Deloitte. (2014). Deloitte Omnichannel Consumer Survey 2013. London: Deloitte LLP.
Jean-Marc Bellaiche, T. C. (2013). The Omnichannel Opportunity for Retailers. Boston Consulting Group Inc.
Retail Me Not Inc. (June 2014). Are Retailers Shifting Fast Enough. RMN Inc.
The creators of CloudTags. (2014). November 17, 2014, from
Vashishta, D. S., & Balaji. (2014 Vol 3, No 1). Brick Meets Click –Omni Channel Retailing in India: A Sustainable Strategy. SRM Management Digest , Retrieved from
World Business Research. (2014). Technology Trends in Retail – The 2014/2015 Retailer Benchmarking Report. Philadelphia: World Business Research.

Our Website:

[1]Estimates from the Deloitte econometric analysis, applied to market size data from Mintel, 2013.
[2](Retail Me Not Inc, June 2014)