The What, Why and How of Omnichannel Retailing

‘The glory days of physical stores are gone and online shopping is taking over’. You hear that a lot, right, but could it be that neither statement is really true? The fact is, shoppers want to have it both ways and that’s why we need to talk about omnichannel retailing.

Let’s imagine that you’re looking for a pair of white sneakers and you start by searching online. Later you’re scrolling through your Instagram feed and an ad pops up with – surprise – a pair of white sneakers that you like. You click on the ad to go to the webstore, where another pop-up offers you 10 percent off your first purchase if you sign up with your email. You sign up to get the discount, but end up deciding to try the shoes in their physical store to make sure they fit perfectly. The shoes are great, but you still have that discount code for an online purchase, so you go back to their online store to complete the order.

Do you recognize that behavior? For one purchase, you’ve just used five different channels, without even thinking about it. This way of shopping, called omnichannel, is becoming increasingly popular. And thanks to this, the need for physical stores is very much alive.

Omnichannel retailing is about having an integrated approach that lets your customers get inspired, browse, shop and finally purchase through different channels – including brick-and-mortar stores, social media, websites and mobile devices.

This shouldn’t be confused with a similar term, multichannel retailing. Multichannel retailing can include all the same channels, but there’s no integration between them. For example, with a multichannel approach, customers can buy items online or in-store, but may only return them in the same way that they bought them. However, an omnichannel approach provides the flexibility of integrated shopping: buy online and return in-store if it suits you.

Is it worth it?

It might sound like a lot of work to be all over the place, and as a retailer you might ask yourself ‘Is it worth it?’. But omnichannel retailing is not about being everywhere, just about being everywhere your customers are. And having a look at some numbers, the short answer to the question is ‘Yes, it’s worth it’.

A study of over 46,000 consumers showed that only 7 percent shopped exclusively online and 20 percent exclusively in-store; in other words, these were the people who didn’t go through multiple channels before purchasing. The remaining 73 percent are the consumers we call omnichannel shoppers.

And there’s a big value in those remaining consumers. A recent study from Harvard Business Review shows that purchases from shoppers that used several channels, the omnichannel approach in other words, had 64 percent larger baskets. That’s a lot.

You don’t want to miss out on 73 percent of your potential customer base and an increase in transaction size, do you? Here are three simple things to have in mind when going for an omnichannel approach.

1. Customize the experience
Don’t assume that consumers don’t like ads when browsing online. In actual fact, what they don’t like is ads that are not properly customized for their needs and interests. Start by figuring out who your customers are and getting to know your customer base, then adapt your online store, brick-and-mortar stores, and advertising accordingly. It’s about adding a personal feeling, without being intrusive.

2. Create a seamless experience
As many as 85 percent of online shoppers start their purchasing journey on one device, and finish on another, according to Google. With this in mind, it’s crucial to have a friction-free checkout system in place for every channel. It also adds value to the experience to have a common thread throughout the omnichannel journey.

Having a smoooth payment solution that applies both online and offline can solve for this. Klarna is a ‘buy now, pay later’ payments company that gives customers more freedom in when and how they pay, both online and offline.

For example, Klarna’s personalized, one-click shopping experience is available everywhere you have a presence. If a customer completes a purchase with Klarna in your physical store then visits your website, you are still able to offer the same choice in payment flexibility and remember their details such as address and payment method to provide a speedy checkout experience.

“Everything in our life is on-demand. Entertainment is on-demand, car servicing is too. So why shouldn’t shopping also be on-demand? Whether your customers end up shopping online or in-store, our goal is to give them the convenience they deserve and save them time.” Sarah Hardin, Product Marketing Manager at Klarna, says.

Overall, it’s important to ensure a smoooth transition between online and offline and make it recognizable for customers. It feels safe for the shopper if it looks and works the same way across all channels. Having Klarna both online and in-store gives your customers that consistency and ensures a hassle-free experience throughout the shopping journey.

A smoooth omnichannel shopping journey doesn’t end at the checkout; customers also want the option to make returns both in-store and online, regardless of where the purchase was made. So-called BOPIS behavior, Buy Online Pick up In Store, is another example of adapting to omnichannel retailing.

3. Be data-driven
For your omnichannel approach to be as seamless and customized as possible, be sure to collect and standardize all the data you get from all your channels. This will enable you to get to know your customers even better so that you can create that personalized experience they want, and deserve.

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How Klarna adds value to your omnichannel approach

Klarna offer shoppers convenience and payment flexibility everywhere you as a merchant have a presence. Whether they shop in your store, online, or in your app – through one integration, you’ll be able to offer a seamless checkout experience.

Other than the overall smoooth approach, Klarna has a few features that makes omnichannel shopping even more convenient.

On-site messaging
The on-site messaging service gives retailers the opportunity to optimize the shopping journey early on. Messages like personalized credit promotions and suggestions on which payment method they can use, will let shoppers know how much they can afford and give them a hassle-free experience. For you as a merchant, on-site messaging has proven to increase average order values and conversion rates.

Instant shopping
With Klarna’s one-click shop anywhere experience, you can make every impression actionable. This button turns any page into a checkout, allowing shoppers to buy the moment they feel inspired. Place the user-friendly button on any physical or digital content to create an express lane to higher sales.

Smoooth payments

Why Klarna?

  • 28% of shoppers say that a long checkout process online is one of the top drivers of disloyalty
  • 27% say flexible payments would make them more likely to buy more with a brand
  • 35% say it would make them more likely to shop again

A lot of the overall experience seems to come down to one thing: Flexible payment options. To add that personal touch – and to provide a smooth checkout to your customers – Klarna is the answer to your needs.

Klarna is Europe’s leading payments provider and a newly-licensed bank. Klarna works with over 130,000 merchants, including ASOS, Topshop, H&M and JD Sports in the UK, to offer payment solutions to users across Europe and North America. Klarna has over 2,500 employees and is active in 14 countries.

Having Klarna in your checkout gives your customers three options:

  • Pay in 30 days
    To put it simply: You give your consumers the opportunity to try it before they buy it, for no extra fee.You as a merchant receive payment upfront, leaving all the risk to Klarna.
  • Installments
    This option allows customers to split their purchase into four equal payments. And guess what – it doesn’t cost them anything extra.
  • Financing
    This is for larger purchases that customers want to pay for over a longer time period. Klarna’s flexible financing options range from 3-36 month plans.
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