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How the Pandemic Has Supercharged Omnichannel Growth

How the Pandemic Has Supercharged Omnichannel Growth

The ongoing COVID-19 crisis has changed the way consumers interact with retailers: Engagement has decentralized from brick-and-mortar storefronts to a constellation of in-person and online touchpoints. A new survey shows that brands who added new channels to their businesses during the pandemic benefited—and plan to keep them.

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Illustrations by Daniel Triendl

Illustrations by Daniel Triendl

The word omnichannel might not have been in many businesses’ vocabularies pre-pandemic, but retailers, coffee shops, and restaurants alike are emerging from the past year and a half with a deep understanding of its importance—and its staying power. The various shutdowns of brick-and-mortar retail, indoor dining, and in-person services at businesses like gyms and beauty salons accelerated trends that were already present in the retail world and revealed the absolute necessity of leveraging a variety of channels to reach customers.

Forty-five percent of respondents to a new survey of independent businesses, conducted by Square and Atlantic Brand Partners—an interdisciplinary business services group within The Atlantic—said that they added new channels to their businesses during the pandemic. But simply adding new avenues to reach your customers is one thing—maintaining them is another. And of the companies who launched new channels during the COVID-19 outbreak, 80 percent said they plan to keep them.

The majority of businesses surveyed across industries said that they are sticking with their new omnichannel strategies:
75%Health & Fitness
95.2%Full-Service Restaurant
62.5%Coffee Shop
82.4%Home & Repair
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Companies that embraced omnichannel strategies were not merely responding to a singular issue or a passing fad. After all, businesses used multiple channels to reach their customers before the pandemic began. But this unprecedented time has accelerated omnichannel adoption, as leveraging multiple customer touchpoints has become critical in connecting with consumers through shutdowns and social distancing measures. The coronavirus pandemic has not only impacted how companies operate; it has permanently altered customer habits and expectations.

However, it’s important to note that omnichannel strategies will not remain static. They will continue to evolve as businesses and markets do. This shift will be especially prominent as the economy moves from the desperation of the early pandemic into the “next normal.” “The interesting thing to follow is how many of the things that companies did in stress mode, trying to survive or react to what customers were doing, are going to be sustained going forward,” says Santiago Gallino, a professor at the Wharton School of the University of Pennsylvania who studies omnichannel integration in retail.

To quickly pivot and meet the evolving needs of their businesses and customers, companies can benefit from a central system through which they can manage their various channels. Because while sometimes adding channels can be as simple as adopting a new social media platform (which 48 percent of survey respondents did during the pandemic), that is just the low-hanging fruit. Making structural changes to the business—for example, rolling out a mobile app (27 percent of respondents) or pop-up space (18 percent of respondents)—requires a solid foundation to work from.

Gallino cited the restaurant industry in particular, where companies put a lot more emphasis on delivery during the pandemic. For instance, 75 percent of coffee shops that added channels during the pandemic implemented alternative ordering and delivery options. Maintaining those options may necessitate not just technological shifts but physical ones: how kitchens are laid out, entry and exit points for delivery drivers, and so on.

This is a good reminder that no one channel exists in a vacuum. A successful omnichannel strategy is not cumulative, in which you simply layer on channels, but holistic. It’s about having synergy between, say, social media and pop-up events. It’s about using QR codes not just to quickly share menus but to understand customers’ ordering behavior and gather email addresses—and then using that data and contact information to pull customers back to your restaurant. In short, it’s about the various channels reinforcing each other and your business strategy. Only 35 percent of those surveyed who augmented their omnichannel strategies during the pandemic said they did so to replace in-person channels.

Businesses said that they added new channels to:
Reach out to customer communities in new ways.
Respond to customer demand.
Expand the offerings and services that they provide.

The businesses that added channels during the pandemic understood that they were not merely making up for something lost but rather extending their brand. It wasn’t about replacing, but expanding: finding new avenues to reach their community and deliver their products and services, and even offering new products and services altogether. The nature of the channels added could depend on the nature of the business. For instance, home and repair companies were more likely to add a website or online store, while bars and breweries were more likely to open pop-up or temporary spaces to meet their customers in person.

The choices made by each business are based on its own understanding of its assets and customers. Gallino warns that getting this element right is deeply important.

Imagine a salon with a great ambience and loyal, happy customers. If that salon adds an email newsletter, it needs to feel like the in-person experience. “You need to be careful that you’re going to provide an equally good experience through every channel,” says Gallino. If not, you start to dilute your product and endanger your relationship with your customers. In other words, a poorly executed omnichannel strategy is worse than no omnichannel strategy at all.

“I think that as customers and as individuals, we are ready to handle limitations of something that we know is not offered,” says Gallino. “So, it’s totally fine if a particular store is not offering certain features. You know ahead of time that that’s not an option, and you decide whether to engage or not.”

You don’t have to be everything to everybody. But the companies that were able to be something to somebody, to expand their omnichannel repertoires during the pandemic, saw immediate benefits.

New channels benefited customers and businesses.
(HoverTap to see statistic.)
59% said …
I was able to expand my products or services to meet the needs of the moment.
57% said …
I offered support to my customers during a difficult time.
50% said …
I was able to maintain my business’s profitability.
43% said …
I was able to grow my business’s profitability.

The companies that expanded their omnichannel repertoires were able to succeed in ways that went beyond mere survival—but, considering the circumstances, even surviving during the pandemic is no small feat. According to a study by the Federal Reserve, more than 200,000 businesses, which otherwise would not have closed permanently, shuttered during the first year of the coronavirus pandemic. That includes more than 10 percent of restaurants in the United States.

The businesses that weathered the storm and diversified their outreach to customers have now set themselves up to move forward from a strong position. The pandemic has been a gauntlet for businesses everywhere, forcing them into hard choices and creative thinking. It has also positioned thoughtful, strategically executed omnichannel growth as a key to getting the most out of the present and building your brand into the future.