Omnichannel is a cross-channel business model that companies use to increase customer experience. The approach has verticals in healthcare, government, financial services, retail and telecommunications industries, including channels such as physical locations, FAQ webpages, social media, live web chats, mobile applications and telephone communication. Companies that use omnichannel contend that a customer values the ability to be in constant contact with a company through multiple avenues at the same time.
"Omnis" is Latin for "every/all" and is considered the integration of all physical channels (offline) and digital channels (online) to offer a seamless and unified customer experience. According to Frost & Sullivan, omnichannel is defined as "seamless and effortless, high-quality customer experiences that occur within and between contact channels".
Until the early 1990s, retail was either a physical brick and mortar store or catalog sales where an order was placed by mail or via telephone. Sale by mail order dates back to when British entrepreneur Pryce Pryce-Jones set up the first modern mail order in 1861, selling Welsh flannel. Catalog sales for an assortment of general goods started in the late 1800s when Sears & Roebuck issued its first catalog in 1896. In the early 1900s, L.L. Bean started its catalog business in United States.
AOL, CompuServe and Prodigy experimented with selling through their proprietary online services in the early 1990s. These companies started sales channel expansion, while general merchants had evolved to department stores and Big-box store electronic ordering. In August 1994, NetMarket processed the first Internet sale where the credit card was encrypted. Shortly thereafter, Amazon.com was founded and the eCommerce sales channel was established. Mobile commerce arrived in 1997, and multichannel retailing really took off.
Omnichannel's origins date back to Best Buy's use of customer centricity to compete with Walmart's electronic department in 2003. The company created an approach that centered around the customer both in-store and online, while providing post-sales support. Omnichannel was coined as a form of "assembled commerce" and spread into the healthcare and financial services industries.
Omnichannel banking developed in response to the popularity of digital banking transactions through ATMs, the web, and mobile applications. The most popular parts of omnichannel banking include 'zero drop rate' channel integration, individualizing channels for customers and marketing other channel options. Banks receive in-depth research about customers to build relationships and increase profitability.
In 2009, the omnichannel platform started to be used in governments through Twitter interaction. Governments are developing web and mobile-enabled interfaces to improve and personalize the citizen experience. The United States government digital strategy includes information and customer-centric shared platforms that provide security and privacy. Omnichannel is used to communicate with citizens through the platform of their choice at their convenience and use feedback to analyze the citizen experience to better serve.
Due to fragmentation between health providers, hospitals, pharmaceutical companies and patients, omnichannel is developing to improve the customer experience in the healthcare industry. Omnichannel healthcare centers around integrating data, technology, content and communication, while coordinating patient's results through digital channels. In September 2015, the University of Pittsburgh Medical Center received media attention for its customer service technology, which was integrated in 2009. The UPMC Health Plan uses an omnichannel system to improve customer engagement and contact resolution.
Omnichannel retailing uses a variety of channels in a customer's shopping experience including research before a purchase. Such channels include retail stores, online stores, mobile stores, mobile app stores, telephone sales and any other method of transacting with a customer. Transacting includes browsing, buying, returning as well as pre-sale and after-sale service.
Although omnichannel is said to be dictated by systems and processes, it is the customer that dictates how a transaction occurs. Systems and processes facilitate the customer journey to transact and be served. Omnichannel is moving toward increased personalization based on analytics to make the customer experience more seamless. According to an MIT report, omnichannel "is the central force shaping the future of e-commerce and brick-and-mortar stores alike."
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