A guide to understanding what is an omnichannel in retail

Omnichannel in retail is a strategy used by retailers to attract, engage, and retain customers across all physical and digital channels. When a customer moves between these channels, online or offline, every interaction they have with the retailer should be consistent to deliver a seamless buying experience.

30 years ago, who would have thought we’d have an entire global marketplace at our fingertips? As retailers, our ability to reach customers and convince them that our products and services will meet their needs is critical. For an omnichannel retail strategy to work, it should engage in a way that is convenient, consistent, and impactful at every point and every channel. Personalizing customer journeys goes a long way towards enhancing this experience—and many of today’s customers agree. Recent studies have shown that 71% of consumers expect companies to deliver personalized experiences, but even more—76%—get frustrated when companies don’t.¹

What that tells us is that customers have high expectations that we as retailers must meet or exceed if we want their business. Innovations in technology and connectivity have opened a host of channels that enable us to connect with consumers and get them to buy. Where customers once shopped only in stores, now they can research, purchase, and get items delivered from almost anywhere. And that’s changing how they shop.

The line between these physical and digital interactions has blurred, evolving into a single, connected omnichannel retail experience called “phygital.” But no matter where or how customer shop, two things are clear. Number one, customers expect the experience to be ultra convenient in a way that caters to their needs. And two, they expect that experience to be the same wherever they go.

Understanding these customer preferences in an omnichannel retail strategy means knowing all you can about them, from customer shopping and browsing histories, to personal interests and preferred channels and devices. All that knowledge requires having the right data and the right connectivity highway to move it where and when it’s needed. Only then can you give your customers exactly what they want at the exact moment they need it.

While data is a critical part of your omnichannel in retail strategy, knowing how to use it will impact the success of your strategy.

Before the digital revolution, companies didn’t have the tools to track customer habits the way we do now. Direct marketing and direct mail campaigns in the 1980s allowed retailers to target customers using data from sources like the U.S. Census and private mailing lists. But the results were less than spectacular.

However, once the internet took off in the 1990s, advertisers learned they could track consumers based on ad clicks, coupon codes, and online purchases. Third-party cookies further enabled e-retailers to gather valuable data, like how long a customer looked at a product, pages they visited, and whether they made a purchase.

But with all that data came growing pains. Many companies lacked security to protect sensitive info from cyberattacks, angering customers in the process. Companies also found it difficult to combine data between on and offline sources so they could have a more accurate view of their customers. 

Fast forward 30 years. We now have better security, better connectivity, and advanced data analytics processing tools that can gather and analyze data from multiple sources quickly.

Through the power of retail technology, high-speed connectivity, and machine learning (ML) and artificial intelligence (AI) tools, retailers can create personalized profiles to address the needs of their customers in near-real time and deploy online strategies to win them over.

But customers have caught on as well. They compare prices, reviews, and features across different sites or apps to find the best deal. A recent survey found that 87% of shoppers use their smartphone to do research while in store.² And although we enjoy the convenience of online shopping, as recently as 2023 less than 16% of U.S. retail sales happened online—proving the in-store experience to be just as critical to your omnichannel retail strategy.³

When you create an optimal experience for your customers, they feel seen and understood. Adopting a customer-centric philosophy means seeing things from your customer’s point-of-view so you can solve the pain points they’re experiencing and win them over.

Even though it seems like omnichannel retail strategies are all about pleasing the consumer, retailers who invest in omnichannel retail strategies typically benefit from higher sales and greater customer retention than those that don’t.⁴ That’s because a happy, satisfied customer is more likely to buy again, even more so if you make it easy and rewarding. Loyalty programs give retailers detailed insight into the customer habits they can use in future campaigns, as well as offer deals and discounts to keep customers coming back. Starbucks Rewards members earn points towards future purchases every time they order and can keep track of their points using the Starbucks app. They can also order ahead to skip the line and conveniently reload gift card balances instantly with the app, website, in store, or over the phone.

Companies that deploy omnichannel retail strategies effectively also do so by thinking holistically about their customers. Outdoor retailer REI employs a highly successful SEO and social media strategy to connect with its audience using Expert Advice blogs and videos. This strategy positions REI as a trusted source of information and establishes them as a go-to outdoor retailer even if customers aren’t actively shopping.

As retailers, we love it when customers reward the experience we give them by buying from us. But all customers are not created equal, which is why personalizing customer experiences is so critical.

As you’ve probably learned by now, personalizing these experiences starts with data. Customers already know they’re sharing data when they engage with us. However, the more data they’re asked to provide, the better experience they expect.⁵ That means finding a balance between what’s needed without being greedy. In any case, the customer data you collect needs to be secure, not just during payments and communications, but across the entire journey. That’s a business must.

Enhancing experiences with next-gen tools

We’ve talked about how the line between physical and digital interactions has blurred to form a single, connected experience.

To better optimize these experiences, technology is helping retailers solve customer issues more quickly with Gen AI-powered chatbots, natural language processing, and customer service voice assistants. Augmented reality (AR) smart mirrors let customer try on clothes virtually in the same way AR-enabled apps let customers preview furniture in their home, as Wayfair has done. And ML technology furthers data intelligence by analyzing data to predict customer behavior faster than rules-based data analytics platforms can do alone.

As retailers seeks new ways to manage inventory, Internet of Things (IoT) smart shelves create seamless connections between online and physical stores, so customers know where to get the items they need, and retailers know when to re-stock. But the possibilities don’t end there. IoT services and solutions enable businesses to keep track of customer and retail assets like packages and fleet vehicles, streamline deliveries and make operations more efficient.

In-store app experiences and store as media

As we’ve said, the in-store experience is as important as it’s ever been. However, customers are using stores in different ways, often with smartphone in hand. Finding ways to engage customers while they’re in the store creates opportunities to strength the phygital relationship you have with them.

You’ve probably used QR codes to learn about a product or service in-store, or in place of a paper menu at a restaurant. When Amazon members shop at Amazon Fresh grocery stores, they scan a QR code using the Amazon app at the entrance. Cameras and IoT sensors log the items to their account as they shop. When it’s time to leave, they simply scan the QR code again at checkout and the transaction is completed, delivering a completely cashless and frictionless experience.

Retailers are also changing store layouts to reflect how customers use their stores, such as putting buy online, pick up in-store (BOPIS) areas in the back. This enables retailers to add sight, sound, and interactive displays strategically along this route. Cameras and motion tracking IoT devices measure customer engagement, logging whether a customer stopped, turned their head, and how long they watched. This data can then be combined with other sources like in-store revenue to track its effectiveness.

One of the most challenging parts of any retail strategy is figuring out if the methods you’re using are catching on with customers. However, one of the many benefits of data analytics and retail marketing tools is that we can now measure the results quickly.

To get there, you’re going to need to pull in data from all your channels, from point-of-sale (POS) systems to e-commerce to digital ads, search engine results, social media, and more. But doing that requires a high bandwidth, low latency network that’s capable of connecting to every channel and transporting data quickly. Business fiber internet and 5G solutions meet the demands of modern retail because they’re fast and reliable, which is ideal for businesses with multiple locations, end points, and hardware all operating at once. But it also gives you room to grow as technology evolves and solutions become even more data intensive.

Naturally, your omnichannel retail campaigns will only be as good as the data you have to work with, and the freshest data always works best. When customers reveal interest, you’ll want to act quickly. Besides having a capable customer relationship management (CRM) platform or data analytics software to capture trends and interests, edge computing solutions enable you to respond to shopper interests as they happen. When data is processed near the source—like when a smart mirror offers up clothing recommendations based on what the shopper “trying on” in store—instead of routing to a data center, you can capture the shopper’s attention when interest is highest.

Another benefit of edge solutions is that it keeps sensitive customer information off a public network. Customers trust retailers to protect their data at all costs. When combined with a low latency, high-speed network, edge cloud services use private connections to store and analyze customer data quickly, reducing the risk of a data breach or hack.

Every channel moment is a chance to build on your customer relationship. By applying key performance indicators (KPIs), you can measure and analyze engagement to see if your strategies are meeting expectations.

The business you’re in and the channels you use will help determine which KPIs to track. If your business uses social ads, you’ll want to know the number of impressions, length of engagement, whether they clicked through to your website, or converted to a sale. Web KPIs may include data like how long a customer spent on your site, what pages they visited, what purchases they made, and lifetime value.

When you track the customer journey across these channels, you’ll see where customers are having trouble so you can adapt your strategies. Methods like A/B testing can help measure existing campaign assets against new ones. In A/B testing, companies deploy and measure two different versions of a channel asset—like a web page, social ad, or mobile app—to see which version performs better. Because customer attitudes are always evolving, evaluating channels on a regular basis will keep you in-step with customer interests so your channel strategies continue to perform at their best.

Data is changing how we connect with our audiences, online and off. Optimizing your network to make the most from this data helps deliver a rich, seamless omnichannel retail experience that boosts satisfaction and creates loyalty for your brand.

To learn more about how our high speed connectivity and edge services and solutions can help you power and scale your omnichannel initiatives, visit AT&T Business retail solutions or contact an AT&T Business representative to speak with an expert who knows business.

See how ultra-fast, reliable fiber and 5G connectivity protected by built-in security give you a new level of confidence in the possibilities of your network. Let our experts work with you to solve your challenges and accelerate outcomes. Your business deserves the AT&T Business difference—a new standard for networking.

¹ “What is personalization?” McKinsey & Company, May 30, 2023, https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-personalization.

² “2023 Consumer Product Content Benchmark Report,” 1WorldSync, 2023, https://1worldsync.com/2023-consumer-product-content-benchmark/.

³ “Quarterly Retail E-Commerce Sales 4th Quarter 2023,” U.S. Census Bureau, February 20, 2024, https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf.

⁴ “Omnichannel Statistics,” Capital One Shopping Research, April 22, 2024, https://capitaloneshopping.com/research/omnichannel-statistics/.

⁵ “State of the Connected Consumer 2023,” Salesforce, 2023, https://www.salesforce.com/content/dam/web/en_us/www/documents/research/State-of-the-Connected-Customer.pdf.