By Indiana Lee
This article explores how retailers can use business intelligence (BI) to optimize omnichannel retail strategies. Using data from various BI insights allows businesses to make more effective decisions, streamline operations, and enhance customer experiences. By harnessing data-driven approaches, retailers create personalized, seamless shopping journeys, maximizing efficiency and sustainable growth through omnichannel retail.
The retail industry is experiencing significant changes, and the emergence of omnichannel strategies is changing the face of the European sector. Today, customers transition between offline and online channels seamlessly. For retailers, success lies in optimizing omnichannel retail through business intelligence (BI) insights, including data mining, business analytics, and data tools and infrastructure. This information allows retailers to analyze past customer behavior to improve future shopping experiences and business performance.
Let’s examine the business intelligence tactics that European retailers can use to leverage the power of data analytics, ensuring improved customer satisfaction, streamlining supply chain management, and driving sales across multiple channels.
Understanding Omnichannel Retail
Omnichannel retail refers to an e-commerce and retail strategy that strives to provide customers with an engaging and smooth shopping experience across all channels — in a retail store, online, and mobile. It can encompass push notifications, email, social media platforms, and SMS texts. The process ensures all customer experiences include pricing, inventory, and promotions across all channels.
This strategy is a form of enterprise intelligence for retailers as the customer shopping journey evolves. Verizon’s 2022 Connected Retail Experience Study found many retailers recognize that the future of retail is a fully connected online and physical store model, with 45% of department stores and specialty shops offering mobile apps with in-store promotions. Operational efficiency technologies, such as mobile point of sale (POS), AR/VR assistants, and digital shelf labels, are other options retailers are considering to become more data-driven and connected.
Customers no longer separate online shopping from in-store shopping and spend the same time in either space. They expect a unified shopping experience where they can switch between channels without any roadblocks; for example, a customer may shop online and pick up the item in-store. While there, an associate may suggest additional items to complement the online purchase to increase sales.
A successful omnichannel approach requires businesses to understand their customer’s behaviors and needs and the technology to support multiple channels and track critical data. Having a team to manage all aspects of the omnichannel strategy and a willingness to change that strategy constantly is necessary for retail success.
Innovative business intelligence (BI) technology also plays a critical role in this success by providing insights that assist retailers in understanding consumer behavior and preferences across different channels.
Data-Driven Decision Making
Business intelligence tools enable retailers to assess their business performance and utilize insights to shape future strategies, operations, and customer interactions. An advantage of BI tools for retailers is their ability to identify emerging retail trends, evaluate pricing strategies, or make inventory adjustments based on demand forecasts. There are five data-driven and measurable metrics to focus on for omnichannel success:
1. Brand Awareness
Omnichannel marketing is all about being present wherever customers are browsing or shopping. To determine the success of brand awareness, retailers can rely on tracking ads’ cost-per-impression across various channels and measuring social media engagement metrics like shares, likes, and comments. Website traffic patterns are critical metrics for an omnichannel for measuring channel success, number of website visitors, activity duration, unique visitor numbers, and bounce rates.
2. Conversion Rate
The rate at which a retailer turns visitors into paying customers is a conversion rate, one of the most important and accurate metrics in omnichannel marketing. Retailers need to determine this rate across all their channels to understand individual consumer behavioral patterns and the reasons for their purchasing decisions.
A 2022 Omnisend study found that retailers using three or more channels in marketing earned 494% higher order rates over single-channel campaigns. Understanding the conversion rate for each channel is necessary for a successful omnichannel program.
3. Retention Rate
Retailers need data on the number of existing customers who return within a particular period to make another purchase. The number of customers a retailer retains over a given time indicates how successful the retailer is at maintaining engagement with consumers. This data is also a reflection of the overall success of the retailer’s omnichannel solution.
Communication is a critical aspect of consumer engagement, as the sooner retailers connect with a buying customer, the more likely they will be to place another order. Retention rate data reveals customer loyalty and the efficacy of a retailer’s omnichannel strategy.
4. Customer Satisfaction Rate
Customer feedback is another piece of critical data retailers should analyze. Measuring customer satisfaction with products, services, and support is a retailer’s most reliable metric.
Retailers can use the Net Promotor Score (NPS) for this process. The NPS is a 0 to 10 scale that provides simple feedback questions to customers. Retailers can use email marketing campaigns, including polls and surveys, to gather more customer information to adjust the business’s approach to consumer care and engagement.
5. Brand Advocacy
The power of brand advocacy must be recognized, especially as so many people are likely to buy products or services based on family or friend recommendations or online reviews.
Retailers can set key performance indicators (KPIs) for brand advocacy, allowing them to examine and evaluate their brand reputation amongst competitors. This data also will enable retailers to improve their omnichannel marketing strategies and make their marketing efforts more customer-centric.
6. Risk Intelligence
Risk intelligence complements BI technology by providing information on potential omnichannel risks by identifying, evaluating, and mitigating the channel’s issues. Through operational risk management, retailers can collect data from external research, internal data, or website audits that help all employees understand the retailer’s business risks and develop an effective risk management strategy when assessed through BI tools.
Retailers who foster a culture of data-driven decision-making can harness the full potential of their omnichannel strategy. Operational efficiency is improved, and retailers can change quickly to adopt consumer preferences and market conditions.
Personalized Marketing and Targeted Campaigns
Business intelligence insights and data empower retailers to create marketing campaigns that foster customer engagement and drive sales. Retailers can identify consumer segments based on demographics, buying behaviors, and specific preferences. This invaluable information allows sellers to tailor marketing messages that resonate with targeted audiences.
For example, suppose data reveals that a particular consumer segment responds well to social media promotions. In that case, retailers can allocate their marketing resources accordingly to maximize the impact of their marketing efforts. BI tools also allow retailers to track the performance of marketing campaigns in real time, allowing for optimizations and adjustments to improve overall effectiveness.
Enhancing Customer Experience
Customer satisfaction is key to the success of multichannel operations, and the insights provided by BI tools are invaluable in crafting personalized, smooth customer interactions. By examining customer data from various touchpoints, retailers can view individual preferences, browsing behavior, and purchase history thoroughly. This information allows retailers to create targeted marketing campaigns, offering personalized promotions and product recommendations, all contributing to an enhanced customer shopping experience.
Additionally, BI tools track customer sales journeys across all channels, focusing on obstacles, pain points, and areas for improvement. If a customer experiences difficulty going from one channel to another, the retailer can use that incident to improve future experiences across all touchpoints.
Customer experience is the responsibility of a retail marketing team, and everyone should be involved in improving customer experiences through omnichannel solutions. Methods of communication with customers, playing to the team’s strengths, and establishing the business’s identity can assist marketers and retailers in working together to create an ideal customer journey. Other ways of improving customer experience include:
- Offering a range of consistent customer service options such as phone, social media, email, website, and live chat or chatbots;
- Using customer journey maps to improve consumer services like personalized greetings, self-service solutions, follow-up emails, and tailored problem-solving or suggestions;
- Valuing existing customers as much as potential customers by offering or simplifying 24/7 contact solutions, adding visible customer feedback to social media or websites, and streamlining complaint policies.
Retailers should be prepared for anything, as omnichannel customer experience revolves around the business’s ability to provide customers with uninterrupted, seamless, on-demand options.
Integration of Online and Offline Data
Omnichannel success hinges on the smooth integration of offline and online data. European retailers can use BI tools to create a single, clear view of customer engagement and interactions across all channels. Retailers that use this meta-channel view can provide customers with a consistent experience, whether shopping online, interacting through a mobile app, or shopping in-store.
Retailers can also use the information they glean from online and offline data to gain valuable insights into the intricacies of the customer journey. This understanding is crucial for retailers to use for improving inventory management, optimizing marketing strategies, and upgrading any operations that need to meet the evolving expectations of modern consumers.
Streamlining Supply Chain Management
A successful omnichannel retail strategy must have effective supply chain management, and BI insights can play a transformative role in this stage. By consolidating data from suppliers, manufacturers, warehouses, and distribution centers, retailers have real-time visibility into demand patterns, inventory levels, and supply chain performance.
BI tools assist retailers in anticipating demand fluctuations, enabling improved, efficient inventory management. These tools prevent stockouts and minimize overstock situations, reducing carrying costs and optimizing inventory levels. BI also offers insights to enable retailers to pinpoint bottlenecks in the supply chain, allowing for enhanced efficiency and strategic improvements.
Use Omnichannel Retail for Consumer Insights
Optimizing omnichannel operations using business intelligence insights is vital in the European retail industry. Retailers can use these tools to improve customer experiences and boost sales by analyzing data and improving supply chain management. As technology evolves, retailers must embrace a data-centric approach to stay relevant in the industry and provide accessible, personalized shopping experiences across every touchpoint.
About the Author
Indiana Lee is a writer, reader, and jigsaw puzzle enthusiast from the Pacific Northwest. An expert on business operations, leadership, marketing, and lifestyle.
