WHAT IS OMNICHANNEL RETAIL?

Although “omnichannel” is the latest retail buzzword, there remains confusion about what exactly it means. Very simply, omnichannel refers to retailers and consumers combining multiple channels to market, sell, buy and deliver goods. Less simply, however, omnichannel can take various forms for both the shopper and the retailer.

Omnichannel shopping 

For consumers, the omnichannel shopping journey can take many forms but all involve a combination of online (computer or mobile device) and offline (brick-and-mortar) channels. Figure 1 compares several single-channel and omnichannel shopping journeys.

Figure 1: Omnichannel Scenarios 

_{Source: CBRE Research, 2018.} 

Omnichannel retailing 

Omnichannel retailers differ from single-channel operators in that they leverage both online and offline space to sell and deliver goods. As with customer journeys, omnichannel retailers can use different formats. While some may focus primarily on digital channels to sell goods, others may rely more heavily on their brick-and-mortar network. For example, an omnichannel retailer might generate most of its revenue online, but leverage a select number of brick-and-mortar showrooms for their products to be viewed and tested. An alternate example is a mall-based retailer that derives most of its revenue from store sales, but uses mobile and online channels to market and sell goods. 

Figure 2: Single Channel vs. Omnichannel Retailing 

_{Source: CBRE Research, 2018.} 

Before the term “omnichannel” came to the fore, many used the term “multichannel” to describe the scenarios above. Though the two have very similar meanings, “omnichannel” has become more popular because it places emphasis on the need for integration between channels. For consumers, it means a “seamless” experience moving between online and offline channels; for retailers, it means a single platform that offers coordinated digital and physical options that allow channels to complement one another rather than compete.

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