The term omnichannel generally pertains to offering a consistent brand experience across all channels of business. Many companies – primarily retailers – are exploring the omnichannel experience to provide customers with seamless messaging at every entry point used to make a purchase. The aim is to leverage the buying experience to distribute cross-channel promotions and deliver sticky loyalty tactics to keep customers engaged, regardless of the method they use to finalize a sale.
Omnichannel retailing has been steadily making headway since Starbucks Corp. introduced its mobile payment app in January 2011. The exclusive, loyalty-based solution was an instant hit, and has risen in popularity since. The app reportedly accounted for more than 85 percent of all mobile payments at the POS in 2014, giving credence to the idea of using a smart omnichannel strategy to strengthen a company's overall market share.
It is becoming increasingly common for retailers to engage with customers across multiple channels to push promotions, answer pricing and inventory queries, and offer alternative checkout options. According to recent research commissioned by ACI Worldwide Inc., omnichannel retail sales are predicted to reach $1.8 trillion in the United States by 2017, with sales in Europe predicted to hit €920 billion ($1.02 trillion) by 2018.
However, as one trend emerges, so does its nemesis. Nikhil Joseph, Emerging Technologies Analyst at Mercator Advisory Group, cautioned retailers and their payment providers to be mindful of omnichannel pitfalls. "If you define the goal of the omnichannel strategy from a retailer's point of view, it is to capture and monetize attention," Joseph said. "Customers are already looking at their smartphones to check prices, read reviews and ask for advice while standing in a brick-and-mortar store, yet the statistics show over half of them aren't purchasing."
Joseph reminded omnichannel retailers that, "People are using their phones in the stores, and if you're not the one they are connected to, you've lost the sale because online competitors have already captured their attention with a more attractive pricing and shipping offer."
Nevertheless, as the shift to Europay, MasterCard and Visa (EMV) chip cards continues in the United States, new uses for old technologies, including radio frequency, near field communication (NFC), quick response, Bluetooth low energy, and Wi-Fi, are emerging that will help omnichannel merchants prevail.
Joseph pointed to companies like Apple Inc., which is using Bluetooth beacons in stores to prompt customers to make on-the-spot mobile purchases, and restaurants that give customers NFC-enabled touch pads to find open tables, place orders and pay while a cashier remotely monitors.
The mounting convergence of payment, communication and marketing technologies has inspired omnichannel payment veterans and newcomers alike to align with the growing number of retailers that are seeking expert omnichannel guidance.
"As more small-to-medium-sized businesses expand, they will need to accept payments across more than one channel," said Kristen Gramigna, Chief Marketing Officer at BluePay Processing LLC, "This will become more and more important to the retail sector as consumers continue to frequent different channels to finalize purchases.
"Omnichannel has worked out well as a differentiator for us because we can integrate with the POS, shopping cart or accounting applications, and can even commerce-enable a merchant's ERP system."
Other payment providers aren't as eager to put so many eggs into the omnichannel basket; they are standing by while companies like BluePay ride the first omnichannel wave. But if Fortune 500 companies like Starbucks, Apple and Wal-Mart Stores Inc. are all reporting omnichannel success it's only a matter of time before a host of other retailers will follow.
This trend is supported by recent Boston Retail Partners research indicating five years from now, almost two thirds of the world's retailers will be able to identify customers via their smartphones when they walk through the retailers' doors.
Joseph's advice to payments industry trendsetters who want to help omnichannel retailers thrive is that "each merchant's omnichannel needs are different, but think about tools you can provide a retailer to make their customer buying experience intuitive and seamless, such as card-on-file services, intelligent inventory applications or a payment solution that solves a particular pain point."
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