Omnichannel. Unified commerce. Seamless or frictionless shopper experience. Call it what you will. The reality is omnichannel is real, and it’s heightening across the globe.
What is meant by omnichannel?
Omnichannel is integrating sales, marketing and customer service in a way that provides shoppers with a seamless and unified brand experience, regardless of which format they use.
Put another way, it means delighting consumers at all touchpoints along the shopper journey—no matter how, when and where they choose to shop. Ultimately, it’s about ensuring your products are available and right-priced, with consistent messaging, when shoppers are ready to buy. They expect a seamless experience, regardless of format.
For brands, this underscores the importance of knowing exactly what your distribution, stock levels, and pricing & promotions look like, not only across different shopping formats and retailers, but on a more granular level—down to individual stores at those retailers.
- Most people still grocery shop at a physical store. Brick & mortar generates roughly 90% of U.S. grocery sales.
- More people are using grocery pickup or delivery from their local store. Brick & mortar stores fulfill the vast majority of these orders.
Consequently, line of sight on product availability on a store-by-store basis is critical. This way you can manage marketing & promotional spend, pricing, range development, etc. in a more meaningful way versus implementing broad-stroke strategies based on channel or retailer aggregates or data from only a small sample of stores. With comprehensive store-level analytics, you get the whole picture.
Increasingly omnichannel: What changed? Why now?
While the pandemic, for the most part, is in the rearview mirror, it left some lasting shifts in the way consumers shop.
- More consumers adopted online shopping during the pandemic; and for some it became a sticky habit. The acceleration of eCommerce sales in recent years is well-documented. However, the days of annual double-digit surges in eCommerce are a thing of the past. The new normal is slow growth. Many shoppers have returned to stores post Covid.
- Consumers began embracing grocery pickup (aka click & collect) and local home delivery models in a big way during Covid. More than half of U.S. grocery shoppers now use pickup on a monthly basis, according to Brick Meets Click data. This, in turn, has resulted in an uptick of local store fulfillment.
- Consumers have also turned to third-party interfaces—the likes of Instacart, Drizly, and Deliveroo—as an alternative to “convenience stores.” These services act as an intermediary, with dedicated shoppers fulfilling orders directly from retailer stores.
That’s a lot of hands—consumers, in-store pickers, third-party services—vying for products at store level. Brands with a timely and comprehensive view (full store, global, regional, local) across all retailers can stay a step ahead of availability issues.
Trend in online grocery receiving method, U.S.
(% of active monthly users of method)
Top retailers are focused on omnichannel strategies
When your key retailer partners are focused on omnichannel, it makes sense for you to be too. Brands that share reliable data-driven insights for sound decision-making make invaluable partners. It also can help elevate your JBP discussions.
Here are a few examples of major retailers focusing on omnichannel:
- Walmart is all in on its omnichannel strategy. The retailer has stated that people who buy both in-store and online at Walmart.com generally spend twice as much and shop in-store more often than people shopping in a single format. In recent years, the retailer began the process of breaking down organizational silos that existed between its offline and online businesses in order to operate in a more cohesive omnichannel way.
According to Deloitte: Walmart currently operates over 8,000 pickup and 6,000 delivery locations. [...] It maintained its investments in store refurbishments, which included a US$3.3 billion investment towards renovation of its stores in 2022, as part of a strategy to blend online and in-store shopping experiences.
“We are a people-led, tech-powered omnichannel retailer. [...] We'll continue to grow because we can serve customers and members however they want to shop. Omnichannel is the winning approach.” (Source: Doug McMillon, President and CEO of Walmart speaking at the company’s Investment Community Meeting, April 2023)
- At U.S.-based Target, digitally originated sales accounted for 17% of sales in Q1 2023. The retailer relies heavily on what it calls “same-day services”—Order Pickup (in-store pickup), Drive Up (curbside service) and Shipt (same-day delivery)—to make it happen. More than 95% of sales from these same-day services are filled at Target stores.
So what? Why CPG brands need an omnichannel lens
Staying in stock is vital to business success. The amount of revenue CPG brands lose annually because of out-of-stocks is staggering (an estimated $349 billion in North America in 2022). Going out of stock means lost sales, and puts your market share and shopper loyalty at risk. Consider this example:
The costly penalty of going out of stock and not knowing until it's too late
Everyone talks about how having location-based data can give you intel on out-of-stocks. You can identify which stores have inventory issues and plug the gaps.
The use cases and benefits of having daily store-based analytics, however, go well beyond just tracking OOS.
3 other compelling ways daily location-based insights can drive your business:
- Identify new distribution opportunities. Having this level of data granularity can pinpoint your “fast selling” locations of product interest. Knowing locations where you consistently run low on or go OOS can help you better understand your target demographics for certain products. This could, in turn, give you the data-driven insights needed to sell into additional locations with similar demographics.
- Optimize promotional budget / prioritize ad spend. Connecting the dots between promotions/ad spend and stock levels can be an insights goldmine. It helps you understand what impact your promotions have on stock levels. Think about it: If you know which stores go OOS when you run a campaign, this may call for a strategy switch-up, i.e., taking different actions that could drive even greater and continued value for your business. For example, you now know precisely when to start/ stop ad campaigns based on product availability. And now teams have the data-driven support needed to share with your retailer partners to get out in front of availability issues (i.e., order more) ahead of your next campaign.
- Mobilize teams to action quickly based on data. Diving deeper into multiple commercial elements that drive revenue, e.g., pricing, promotions, etc., can help get at the root cause of your stock issues. While you may not be able to fix an out-of-stock gap the next day, you can mobilize teams—Supply Chain, Marketing, Sales, etc.—internally to solve the underlying issues much faster. Knowledge is power. Having the power sooner puts you in control to initiate change and drive solutions that will maximize revenue growth.
Future blogs will dive deeper into use cases of daily location-based insights. Stay tuned.
Contact us to learn how our eStoreCheck Omnichannel solution can help your brand maximize sales opportunities.