Ask the Expert: What Is Omnichannel

Our “Ask the Expert” column taps into the knowledge of digital commerce gurus to provide insights into commonly asked questions surrounding the industry’s trending topics.

In the last two years, the lines between the worlds of eCommerce, social selling and physical storefronts have become increasingly blurred. Customers now have endless choices when it comes to where and how they make their purchases. Against this complex landscape, omnichannel has become a buzzword on every retailer’s mind. But before they rush to upgrade their omnichannel capabilities, it’s important to understand what the term means, especially for their specific business.

We hear from Chong Hin Ng, co-founder and CEO of award-winning market research firm Asia Insight, to learn more about omnichannel and how businesses can harness the opportunities that it brings. 

Let’s start with the basics – what is omnichannel and why has it become so popular recently?

Omnichannel, as the name suggests, refers to a multi-touchpoint approach to retail that creates a seamless experience for consumers, spanning physical storefronts, eCommerce, social commerce and more.

Omnichannel in itself is not a new concept. Ever since digital commerce was introduced, consumers have been presented with many ways to make a transaction, whether it is browsing online and eventually making an in-store purchase or vice versa. Today, most young consumers have grown to expect a seamless omnichannel experience when they purchase from any brand. The accelerated digitization of brands in recent years has also increased the ease of switching between different channels.

How has COVID-19 impacted consumers’ omnichannel behaviors?

The pandemic has created what we call a stay-at-home economy, which has greatly propelled omnichannel behaviors among consumers. What this means is that consumers are increasingly utilizing both online and offline channels in their purchases instead of sticking to just one type of channel. One of our recent studies confirmed this trend. Over half of purchases by Southeast Asian customers in the last year involved both an online and an offline touchpoint as part of the purchase journey – a significant increase compared to how it was three years ago. Unsurprisingly, there has also been a decrease in customers who are shopping only offline or only online.

What’s more, according to the latest e-Conomy Southeast Asia 2021 report by Google, Temasek and Bain, the digital economy has seen increased spend and frequency of use among existing consumers in the last year compared to the pre-COVID period. This trend has been especially striking for basic essentials like groceries and food delivery and is likely to continue in subsequent years.

What are some other trends that have arisen as a result of omnichannel shopping?

One trend that we are seeing is how brands are rethinking and redesigning their physical retail space. Some have made the move from large flagship stores to decentralized and smaller stores that are closer to residential areas, as these spaces can serve as both delivery hubs and collection centers to reduce delivery times and increase convenience for customers.

Brands are also adopting more technology to bridge online and offline experiences. For example, many cosmetics brands are leveraging augmented reality to show customers how certain makeup products would look like on them. Not only does this technology enhance customers’ shopping experience, it is also an avenue for brands to recommend other products in their portfolios and cross-sell to customers.

Brands are also emphasizing the importance of building emotional connections with their customers in an increasingly digital world. This is reflected in the popularity of livestreaming, where customers can engage with the host in real time and watch product demonstrations. There’s also been an increased focus on the unboxing and post-purchase experience for certain product categories.

Will omnichannel habits change in the post-COVID-19 era?

COVID-19 has brought about irreversible changes to the way we live, work and play, especially with regard to the increased use of technology in our daily lives. In the same way that people have adapted to hybrid work models across many industries, consumers are likely to continue with their blended approach to shopping across offline and online channels.

In fact, consumer expectations are only going to grow when it comes to the seamlessness of experiences that brands can offer across the entire purchase journey, whether it’s regarding easier product discovery both offline and online or faster delivery and more comprehensive post-purchase care. For example, a customer who wants to buy an air-fryer can easily go to a physical store to see how a product looks in real life while at the same time comparing discounts and promotions from that particular brand’s digital channels on their phones. More importantly, they will expect the same service and information across the brand’s online and offline platforms in order to make the best purchase decision.

Chong Hin Ng is the co-founder and CEO of Asia Insight. He has consulted for numerous Fortune 500 companies, including Daimler Chrysler, Hewlett Packard, Samsung, Philips and many others. With over 20 years of research and strategic marketing experience, he has been instrumental in providing customer-inspired breakthroughs to many of his clients.

Want to hear more insights on this topic? Tune into Lazada Insider’s chat with Chong Hin Ng and Adrian Tan, managing director of Asia Insight, on YouTube or listen to the episode on Spotify.