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Omnichannel is a cross-channel business model that companies use to improve their customer experience. The approach has applications in healthcare, government, financial services, retail and telecommunications industries, and includes channels such as physical locations, FAQ webpages, social media, live web chats, mobile applications and telephone communication. Companies that use omnichannel contend that a customer values the ability to be in constant contact with a company through multiple avenues at the same time.
"Omnis" is Latin for "every/all" and here suggests the integration of all physical channels (offline) and digital channels (online) to offer a unified customer experience. According to Frost & Sullivan, omnichannel is defined as "seamless and effortless, high-quality customer experiences that occur within and between contact channels".
Until the early 1990s, retail was either a physical brick and mortar store or catalog sales where an order was placed by mail or via telephone. Sale by mail order dates back to when British entrepreneur Pryce Pryce-Jones set up the first modern mail order in 1861, selling Welsh flannel. Catalog sales for an assortment of general goods started in the late 1800s when Sears & Roebuck issued its first catalog in 1896. In the early 1900s, L.L. Bean started its catalog business in United States.
AOL, CompuServe and Prodigy experimented with selling through their proprietary online services in the early 1990s. These companies started sales channel expansion, while general merchants had evolved to department stores and Big-box store electronic ordering. In August 1994, NetMarket processed the first Internet sale where the credit card was encrypted. Shortly thereafter, Amazon.com was founded and the eCommerce sales channel was established. Mobile commerce arrived in 1997, and multichannel retailing really took off.
Omnichannel's origins date back to Best Buy's use of customer centricity to compete with Walmart's electronic department in 2003. The company created an approach that centered around the customer both in-store and online, while providing post-sales support. Omnichannel was coined as a form of "assembled commerce" and spread into the healthcare and financial services industries.
Omnichannel banking developed in response to the popularity of digital banking transactions through ATMs, the web, and mobile applications. The most popular parts of omnichannel banking include 'zero drop rate' channel integration, individualizing channels for customers and marketing other channel options. Banks receive in-depth research about customers to build relationships and increase profitability.
In 2009, the omnichannel platform started to be used in governments through Twitter interaction. Governments are developing web and mobile-enabled interfaces to improve and personalize the citizen experience. The United States government digital strategy includes information and customer-centric shared platforms that provide security and privacy. Omnichannel is used to communicate with citizens through the platform of their choice at their convenience and use feedback to analyze the citizen experience to better serve.
Due to fragmentation between health providers, hospitals, pharmaceutical companies and patients, omnichannel is developing to improve the customer experience in the healthcare industry. Omnichannel healthcare centers around integrating data, technology, content and communication, while coordinating patient's results through digital channels. In September 2015, the University of Pittsburgh Medical Center received media attention for its customer service technology, which was integrated in 2009. The UPMC Health Plan uses an omnichannel system to improve customer engagement and contact resolution.
The emergence of digital technologies, social media and mobile devices has led to the significant changes in the retail environment and provide opportunities for the retailers to redesign their marketing strategies. Nowadays, customers tend to be looking for information in the physical store and at the same time they are getting additional information from their mobile devices about offers and possibly better prices. A number of features, like size charts, easy return policy and same-day delivery, have boosted ecommerce and promoted omnichannel shopping.
Omnichannel has overtaken multichannel specifically in the contact center. Businesses that maintain contact centers have been encouraged to add an increasing number of channels with which customers can interact with the business, including email, chat, SMS, and social media. Omnichannel contact centers offer customers the same experience across all channels, while providing customer service agents a simpler interface and richer set of data.
Although omnichannel is said to be dictated by systems and processes, it is the customer who dictates how a transaction occurs. Systems and processes facilitate the customer journey to transact and be served. Omnichannel is moving toward increased personalization based on analytics to make the customer experience more seamless. According to an MIT report, omnichannel "is the central force shaping the future of e-commerce and brick-and-mortar stores alike."
Omnichannel retailing is an expansion of multi-channel retailing. The major change between the two is the level of integration. Multi-channel is usually identified as a non-integrated way to approach customers while omni-channel requires coherent and absolute integration. More and more retailers have realized the opportunities and advantages of integrating multi-channels by adopting the omni-channel approach. The boundaries between diverse channels tend to vanish in an omni-channel environment, giving the customer a completely unified experience. An omnichannel retailer has traditional methods of mass advertising integrated with emerging interactive channels. Websites, email offers, social media messaging and physical stores all show the same messages, offers, and products. The omni-channel concept not only extends the range of channels, but also incorporates the needs, communications and interactions between customer, brand and retailer.
1. Providing a seamless experience
In the omnichannel world, display advertising, search energy, social media, referral websites, e-mail and mobile marketing can be considered as the independent channels within the digital intermediate due to those methods can all promote one-way or two-way communication. The retailers should find ways to integrate the online and offline channels and avoid segregated campaigns. Therefore, no matter how the shoppers swap across channels and devices, the use of various channels and touchpoints are able to be consistent, concurrent and compatible.
2. Analysis and understanding of customer behaviours
When adapting the omnichannel concept, customer behaviours need to be fully understood by the retailers. Especially the elements that might truly drive the customers to make purchase decision; and customer's paths to purchase, which related to their lifestyle, time committed to the purchase and the distance to the retail store. Based on the customer behaviours, retailers could provide targeted incentives through digital and mobile promotions.
Omnichannel means having a uniform customer experience. A simple example is that the design of the website should remain consistent with the mobile app and should also match the physical store presence.
Shoppers can shop John Lewis the same way through in-store, website, mobile app and telephone. Regardless of the customers' location and time. The order can either be delivered to the address directly, collected at the store, or collect from one of the many John Lewis partners. John Lewis believe they are trying to meet the growing demand of customers who want to match their lifestyle with their shopping experience.
Vodafone developed mobile apps which are specifically for the interactions with audiences during the TV shows. The interactive channels have integrated advertising messages which extend the scope to reach the customers.