From multichannel to omnibusiness, 10 years of retail evolution

Stéphaine Bernat has always been fascinated by the relationship between employees and their company, and worked in marketing and communications in international retail environments before turning her attention to the SaaS world. She is now working on the adoption of on-screen digital communication at Cenareo , exploring another aspect of the dialogue between a brand and its audience, whether internal or external.

The retail sector has evolved at record speed in recent years. With the explosion of digital, industry players adopted a multi-channel strategy that seemed to place e-commerce in competition with the physical point of sale. But this supposed opposition has finally given rise to a new approach that favors omnichannelity and the total complementarity of online and offline.

The 2010s: from single-channel to multi-channel

For a long time, going to the store to buy a product was the norm. But the digitalization of the economy has prompted retailers to reach out to their targets on the Internet too. The development of a multi-channel strategy symbolizes the desire of retailers to effectively multiply their points of contact. After the early days of e-shops, the Internet has become a preferred purchasing space. In 2010, online sales accounted for 3% of total retail sales (excluding fuel, pharmacy and medical goods). It has gradually climbed to represent 9% in 2019. A year later, thanks to successive confinements, its share jumped to 13% (Source: Fevad).

And yet, the rapid, steady growth of online sales has also revealed a real threat to retailers: the risk of cannibalization between different distribution channels, or even the death of the point of sale. A physical store has no interest in having a customer come to the store for advice before buying online. Another adverse effect of multi-channel marketing is higher costs and more complex logistics, as communication, advertising, distribution and sales have to be managed in parallel. The transition to omnichannel is underway: how to think of physical and digital purchasing spaces in terms of their complementarity, rather than their opposition.

Focus on the customer journey

Omnichannelity also owes its emergence to another factor: consumers, now confronted with different distribution channels, have changed their habits. By giving them the option of buying online or in-store, we thought we were giving them a "choice of weapons". But in the end, they have chosen to integrate digital technology into their in-store shopping experience. And conversely, they use points of sale in their online shopping experience... 

With the new customer expectations inherent in multi-channel retailing, brands are now focusing more on the buying behavior of their targets. But retailers need to go even further in integrating online and offline to offer consumers a more fluid, unified purchasing experience.

Multichannel is dead, long live omnichannel

The 2.0 consumer wants to obtain information about a product on social networks, try it out at the point of sale, have it delivered to his home... They want to take advantage of the benefits of digital technology as well as those of in-store purchasing. Omnichannelity is therefore a response to changing consumer behavior. 

This trend has led to the digitalization of stores, but it's also prompting online pure players to open their own physical outlets! Online is challenging offline, but physical retail is also pushing e-commerce to its limits. Jeff Bezos is said to be on the verge of launching several large Amazon stores with a surface area of 2,500 square metres. In parallel, Amazon's "Prime" option exists to satisfy the consumer's need to own a product at the time of purchase.

Online and offline: the best of enemies?     

The quest for convergence between online and offline is now impacting every aspect of retailing. The growing use of chatbots and social networks shows that even customer relations are going digital.

In 2011, The Retail's Big Show presented a wall of twelve intelligent touch screens capable of displaying several thousand products in 3D. Ten years on, it's clear that this virtual wall has not invaded the market. A "flesh-and-blood" sales assistant is still on hand to advise customers, but in reality he or she is part of a more global strategy in which screens and tablets are also used to streamline the customer experience.

Phygital, the big winner in the wake of the health crisis?

Of course, the health crisis, with the closure of "non-essential" stores, has greatly disrupted a sector already weakened by the yellow vest crisis. It has also accelerated the digitalization of the sector, with the development of click & collect, the drive and payment without contact. In the early 2010s, the retail sector could still see a threat in the development of online. Today, it's e-commerce that has helped limit the impact of store closures. 

It's clear that digital is also being used as a powerful drive-to-store lever, at service , where stores are still seen as the best place for potential purchases. Social networks, digital signage - and in particular location-based digital advertising - are used to generate more traffic in-store. Digital "plays the card" of the physical store. And the use of an application like Yuka demonstrates that cell phones can be used for web-in-store purposes. More than ever, brands are looking for phygital strategies that aim for omnichannelity as the best of the two worlds of digital and physical retail.

Retail with a human face

The health crisis has considerably boosted the digitalization of retail, but at the same time seems to be reconnecting it to its origins, rehumanizing it. From a place of sale, the store is becoming a place of life, entertainment and, above all, experiences. Orange had already understood this with the development of the "Smart Stores" concept, which aimed to create greater serenity and confidence in stores designed as an extension of the home. Consumers are invited to try out products in their own environment, and become part of a unique experience.  

Ikea's new store concept, opened in downtown Vienna, is also an ultra-digital shopping destination: touch screens on every floor, omnichannel purchasing solution via app, checkouts replaced by automatic kiosks...More than 100 screens are integrated on every floor and are designed to provide both inspiration and additional product information.

When experience returns to the heart of the in-store customer journey... even at Ikea, a forerunner in this field.

What does the future hold for retail in 2030?

In just ten years, brands have moved from a multi-channel strategy to a cross-channel approach, culminating in omnichannelity. For the time being, brands must ensure that the strengths of each sales channel serve the performance of all. Gone are the days of compartmentalizing physical retailing on the one hand, and digital distribution on the other. Retailers need to organize a permanent ping-pong between the two, which will serve omnibusiness and therefore their performance.

The quest for a unified business has begun!