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July 30, 2014

The Rise of the Omni-channel Retail Experience

woman shopping

While several notable ecommerce companies are making forays into the physical world – Bonobos, Warby Parker, and BaubleBar to name a few – there’s a lot of buzz around a new and exciting trend: the rise of the omni-channel retailer.

So what’s omni-channel retailing?

Today’s connected consumers will shop when and where it is most convenient for them — whether that’s while strolling through Nordstrom, surfing the Internet at 1am, at a Junior League fundraiser, or at a company store. They might use a tablet, smart phone, or computer to conduct research or complete their sale. In response, omni-channel retailing puts a concentration on providing a seamless, multi-channel shopping experience that reaches consumers wherever and however they choose to do their shopping.

IDC Retail Insights concurs that omni-channel shopping “requires providing an immersive and superior customer experience regardless of channel”. It’s important to present one consistent brand, across all channels, and provide a seamless customer experience as people cross these channels.

Further, a physical retail experience of the brand could drive an online purchase, repeat shopping, gifting to friends, and the opportunity to seed new markets. This virtuous cycle allows the retailer to cross benefit as each channel builds upon the other.

To be considered a true omni-channel retailer, you must simultaneously leverage and manage all channels so that customers are managed across each. Ramping up omni-channel retail tactics will result in attracting a more knowledgeable consumer, so store employees need to become equally savvy and knowledgeable about merchandise carried across all channels. And for maximum impact, the marketing function must leverage all the latest digital and data mining tools in order to provide data-driven offers that are relevant to a specific consumer determined by their purchase patterns, social network affinities, website visits, and loyalty programs.

So as more consumers research products online before buying them in-store, cross-channel consistency will become critical to the experience a retailer provides. Other omni-channel brands like Apple and Nordstrom have succeeded in prioritizing a seamless consumer experience between the online and offline retail worlds, but in many other cases, there’s a long way to go before a truly frictionless customer experience is the norm.

Kendra Scott Design

Up-and-coming jewelry designer Kendra Scott Design (a recent NVP investment) is a great example of a company that is enjoying tremendous customer loyalty due to its omni-channel customer acquisition strategy.

Kendra Scott Design sees 50% of its revenue from company-owned retail locations, 25% from direct ecommerce sales, and 25% from a mix of wholesale accounts including specialty boutiques and high-end department stores like Nordstrom, Neiman Marcus, and Bloomingdale’s.

When Kendra Scott Design enters a new geographic market (often initially via wholesale push in boutiques as well as high-end stores such as Nordstrom), they’ll launch a local trunk show and provide extensive training for the sales team. Entry into a high-end wholesale account provides the necessary credibility as the company continues to build brand awareness in new markets.

After gaining traction in a new metro area, Kendra Scott Design will then focus on ecommerce with local online advertising and online events like the popular Wednesday Night Girl’s Night Out promotions (which mimic promotional in-store events each week that have become a destination event in many cities).

Ecommerce sales momentum becomes a trigger to look at potential new retail locations. As the company opens a retail store, the local storefront serves as a large billboard, providing an amazing location for hosting all sorts of events – from bridal and birthday parties to fundraisers where women can make custom and personalized jewelry at Kendra Scott’s ColorBar. The Kendra Scott team has truly embraced physical retail for what it does best: engaging consumers with opportunities to experience the brand, to be entertained, and to touch, feel and create custom product.