Omnichannel customer retention is critical as in-store traffic returns

Retailers must keep customers happy across channels.

During the COVID-19 pandemic, shoppers flocked to e-commerce amid lockdowns and concerns of exposure.

However, they then stayed in these buying habits for the enjoyment and convenience that e-commerce provides. And according to a recent report from the IBM Institute for Business Value, these massive waves of e-commerce shoppers are already adopting a more hybrid shopping approach as desires shift the further we distance ourselves from the pandemic.

The report shows how hybrid shopping is already the primary buying method for 27% of all consumers and 36% of Gen Z—more than any other generation. For retailers, this return to store as part of a hybrid shopping approach may come as a bit of a surprise, and you may be feeling like you’re a bit flat-footed in your strategy to bridge together your audiences across digital and physical settings. 

As a recession or economic downturn looms, every customer journey takes on more significance in times like these – there’s much less margin for error. This makes it critical to leverage a cohesive omnichannel strategy to retain customers who are utilizing this new approach. 

So, how can retailers deliver seamless experiences for customers online and in-store, be proactive in a down economy, and keep tabs on loyal customers throughout their journey, whether in-store or online? 

Implement the latest in omnichannel shopping features

All retailers should prioritize having an option for buy online, pick up in-store (BOPIS). 

This was adopted early on by retailers during the pandemic but is now a critical part of retaining customers as in-store traffic returns. According to McKinsey & Company, more than half of those who used a new channel or service such as “buy online, pickup in-store,” during the pandemic said they would continue the practice post-COVID-19. 

The ease of ordering groceries, gifts, or even doing errands online and taking a quick drive to pick them up in-store is often more appealing than ordering online and waiting for things to ship. BOPIS drives customers to the physical location, so implementing this highly-desired offering can be a massive revenue booster.

McKinsey & Company research also notes how the omnichannel shopper makes purchases 70% more often and spends about 34% more than people who shop exclusively in stores. 

Similarly, buy online return in-store is another similar offering that customers are looking to take advantage of. For retailers, this can help reduce shipping expenses for returns and also boost in-store traffic. 

Ensure accurate omnichannel inventory

Up-to-date inventory that’s available in-store and viewed online is another integral piece of a seamless omnichannel experience from online to in-person, but also important to acquiring a customer before they even arrive in-store. 

The ability to check inventory online before shopping in person is important to customers. If this is done incorrectly, it’s often an operational and logistical issue that can critically impact sales. Studies have shown that consumers lack patience if they find themselves in an "out of stock" situation: more than 40% opt to substitute the brand or item, 31% substitute the retail store, 15% postpone, and 9% give up on the purchase.

This can also have detrimental effects on store and brand loyalty, customer dissatisfaction, and even negative financial consequences, according to the study. Having up-to-date inventory data will keep customers informed before they get to the store, and increase trust and loyalty when they shop in person and are met with what they anticipated from doing their research online first. 

Connect the data dots across all channels, then see the big picture

Personalization at the point of sale opens up some interesting opportunities for retailers if they can stitch together predictive insights from prior customer experiences and purchases. This all starts by seeing value delivery as an asset in customer data.

Collecting datasets starting with pairing transactional data with emails and phone numbers is the first step towards then gathering behavioral first-party data like specific shopper preferences and eventually acquiring highly-coveted and effective zero-party data such as quiz responses and specific messages from the customer. All these strategies can be woven together to help boost bottom-line revenue and customer satisfaction. 

Tied to the above will be loyalty and recognizing your highest value customers onsite and in-store by leveraging an e-commerce Data Platform (EDP) that connects all these digital and inventory variables in real-time. Tying cross-over behaviors based on lifetime value from physical to online will be a big piece of the puzzle for retailers heading into 2023 and beyond.

Shifting demographics and the emerging buying power of Gen Z being up for grabs as a result of this downturn means that the winners of next year’s retail environment will invest in the technology and data to build remarkable and profitable omnichannel assets. 

Don’t succumb to copycat strategies

Running promos that acquire flash-in-the-pan customers could lead to inventory issues and a lack of customer loyalty down the line, not to mention massive margin erosion at a time when every profit dollar counts. Knowing the lifetime value of each customer, or customer lifetime value (CLV), and how that impacts how said customer was acquired and retained will be key in a recession economy. Online or off, you have to tie transactional purchase data together using a primary pivot of an email address or phone number.

From here, you can run machine learning models to predict CLV and probabilities of being an active customer going forward. If the probabilities are low, or if you’re tracking high amounts of returns, it may not be worth the effort to spend or push marketing to acquire those customers. Companies will need ways to actively segment these customers out of their mix to ensure future profitability.

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