What is Omnichannel?


Identity for Retail

An omnichannel strategy has become a key component in creating satisfying customer experiences and building customer loyalty and trust. The strategy is particularly important for retailers, banks, insurers, and other consumer services. Omnichannel refers to a company’s ability to provide a cohesive experience whether customers are visiting a brick-and-mortar store or branch, logging onto a website, connecting through social media, using a mobile app, contacting a call center via phone or text (SMS), or visiting a kiosk in an airport or mall.

Omnichannel helps to integrate them all — whether they're digital channels or offline channels — so they can share customer data to enable a consistent and highly personalized experience based on customer behaviors, preferences, and needs. Omnichannel also allows retailers, financial services companies, and other organizations to build a single view of customer needs across their channels. 

This single view benefits the customer and the company. In retail, for example, it enables a seamless shopping experience, so that a customer browsing a mobile app can then move to a desktop system and pick up right where they left off.  

At the same time, a single view enables the retailer to push personalized and targeted messaging and offerings at the right time and through the right channel, creating opportunities for further engagement and sales. Ultimately, the single view allows providers to build an understanding of consumers’ known and unknown needs, which occurs when a customer purchases one product or service and is offered an adjacent product or service in real time. These capabilities occur within and across brands and span the end-to-end buyer’s journey. They typically include integration with third parties responsible for value-added offerings, order fulfillment, and loyalty programs.

Today's customers have many options for researching products and services, making purchases, subscribing to services, and engaging with customer support. An effective omnichannel strategy is the key to providing a consistent experience that removes friction and creates an enjoyable customer journey. At the same time, it enables retailers and service providers to build a single view that uses data and metrics to improve customer engagement and create sales opportunities.

How omnichannel differs from multichannel

Omnichannel is a little like multichannel on steroids. While most companies that engage in ecommerce employ a multichannel strategy in which they connect with customers through multiple touchpoints, such as a website and social media, as well as offline channels such as physical locations, these various channels do not tend to be interconnected. As a result, they often lack a consistent experience and are unlikely to share data about a customer's buying history, behavior, and preferences.

An omnichannel approach is highly integrated so that silos of information about a customer are shared between channels. Because each channel has the same information, the physical store, website, or the app on a mobile device can create consistent messaging and a personalized customer journey. 

By creating a very customer-centric experience, omnichannel offers compelling results in customer satisfaction, long-term customer loyalty, and profitability. A recent McKinsey & Company study reported that 71 percent of consumers expect personalization from the brands they engage with. The report concluded, “Organizations able to build and activate the capability at scale can put customer lifetime value on a new trajectory—driving double-digit revenue growth, superior retention, and richer, more nurturing long-term relationships."

Omnichannel for multi-brand enterprises 

Many companies, particularly retailers, function as part of larger groups that operate multiple brands, and for these organizations, an omnichannel retail strategy is critical. When a customer is engaging with an online store and moves to the site of a "sister" brand, that customer should have a seamless experience. There should be no need to log in to the new site and start from scratch. Information about the customer, an understanding of customer needs, and content curated for the customer are consistent from one channel to the next.

Such integration hasn’t been easy for these enterprises. The silos are one problem, but scale is another. Multinational companies that operate multiple brands struggle with their IAM infrastructure. It simply lacks the ability to deliver successful omnichannel experiences and apply intelligence to customers’ needs. For example, in the financial services sector, an insurer might want to push a personalized offering of homeowner’s insurance once a customer has applied for a mortgage. Scaling value-added offerings is made possible through an omnichannel strategy, which is enabled by enterprise-grade IAM. 

"Players who are leaders in personalization achieve outcomes by tailoring offerings and outreach to the right individual at the right moment with the right experiences."
– McKinsey & Company, “The value of getting personalization right—or wrong—is multiplying,” November 12, 2021

Why personalization matters

Online giants, Amazon for one, have shown customers what personalization can look like, and they have raised the bar for all companies that engage in ecommerce. Omnichannel is a way to meet customer expectations for a personalized experience that leads to greater customer satisfaction.

Netflix knows what its viewers prefer and uses that customer data to serve up similar types of programming. But that type of approach isn’t limited to media companies, because showing irrelevant messaging or content in any category is risky. It signifies that the company does not know or understand its customer, which leads to frustration and, often, customer abandonment. By recognizing customers across channels and sharing real-time data, companies can create user experiences that keep customers coming back.

For customer loyalty and trust, security is as important as user experience

Along with customer experience, security is essential for establishing, sustaining, and nurturing customer relationships, thereby building long-term trust and brand loyalty. Consumers share a lot of data online, and they’re aware of the potential for risk, including the exposure of their personally identifiable information (PII) through a data breach, as well as the risk of companies using and selling their customer data without permission. To build trust, companies must be able to protect customer data and privacy as customers engage in online shopping and banking, and they should allow customers to control their own privacy and consent settings through self-service and user-managed access (UMA), which gives customers choices about who their data is shared with, when, and for how long.

At the onset of the pandemic, consumers began spending less time shopping in physical stores and more time shopping in online stores over web, mobile, and social media channels. But with the acceleration in digital spending, there’s been a coinciding increase in cyberattacks, such as account takeover (ATO) and denial-of-service (DoS) attacks. Attackers have significant financial incentives to sell data on the dark web, which means there has also been a rise in data theft. According to the ForgeRock 2021 Customer Identity and Breach Report, the retail sector accounted for 16 percent of the total records compromised, a huge increase over the prior year.

Some of the strategies organizations can use to prevent and mitigate such threats and protect customer data include enforcing a Zero Trust security strategy. Zero Trust reduces the risk of unauthorized access by enforcing granular controls based on multiple factors, such as the user's location, device, security posture, and more. Adaptive authentication is another strategy that dramatically reduces risk, while eliminating unnecessary friction for the customer.

Why digital identity is key to creating a secure omnichannel experience

Digital identity is a key component of omnichannel because it enables the coordinated, seamless experience consumers have come to expect, while delivering the security needed to prevent fraud and to protect customer data.

Modern digital identity can help you deliver your own Amazon-like experience to drive your omnichannel revenue, strengthen your customer brand loyalty, and maximize ROI on your digital investments.

ForgeRock Customer Identity and Access Management (CIAM) enables personalized omnichannel experiences by integrating systems organization-wide for interoperability. With CIAM, you can unlock previously siloed customer data to inform personalized customer journeys and experiences.

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