The Omnichannel

Playbook
Leveraging Composable Commerce for Omnichannel Experiences

commercetools.com
Table of contents
The Omnichannel Playbook

Executive summary ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 3

CHAPTER 1 - Omnichannel commerce 101 ��������������������������������������������������������������������������������������������������������������������������������������������������� 4
A brief evolution: From multichannel to omnichannel ��������������������������������������������������������������������������������������������������������� 5
Top benefits of omnichannel commerce ����������������������������������������������������������������������������������������������������������������������������������������������7
Common pitfalls ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 8
How to identify what journeys to start your omnichannel strategy? ����������������������������������������������������������������� 9
CHAPTER 2 - 4 trends shaping omnichannel commerce ����������������������������������������������������������������������������������������������������� 10
1. A new role for brick-and-mortar stores ���������������������������������������������������������������������������������������������������������������������������������������������11
2. BOPIS and co. continue to grow ����������������������������������������������������������������������������������������������������������������������������������������������������������� 12
3. The rise of phygital ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 13
4. A renewed focus on data ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 14
What emerging digital channels make sense to evaluate for your business? ������������������������������������� 15
CHAPTER 3 - Principles for a successful omnichannel strategy ������������������������������������������������������������������������������� 16
Customer data & analytics ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 17
Real-time inventory visibility ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 17
Channel-agnostic orchestration with APIs ������������������������������������������������������������������������������������������������������������������������������������� 18
One commerce system for all journeys ����������������������������������������������������������������������������������������������������������������������������������������������� 18
Customer-centric organization ����������������������������������������������������������������������������������������������������������������������������������������������������������������������� 19
Adaptability ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 19
CHAPTER 4 - The omnichannel-ready engine: Composable commerce ����������������������������������������������������� 20
What’s composable commerce? ������������������������������������������������������������������������������������������������������������������������������������������������������������������� 21
Why is composable commerce the engine behind omnichannel? ������������������������������������������������������������������ 22
Marrying physical and digital at Harry Rosen ������������������������������������������������������������������������������������������������������������������������������ 23
Using data, AI and AR at Ulta Beauty ���������������������������������������������������������������������������������������������������������������������������������������������������� 24
CHAPTER 5 - Actionable insights ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������25
Key takeaways ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 26
Omnichannel strategy checklist ������������������������������������������������������������������������������������������������������������������������������������������������������������������ 27
Next steps ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������29
Continue exploring ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 30
About commercetools ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 31

The Omnichannel Playbook 2

Executive Summary
Although the concept of omnichannel experiences has been around for some time, it continues
to be a compelling approach. In a nutshell, omnichannel comprises two elements: One, customers
use the channels they’re comfortable with. And two, they seamlessly switch channels without
disruption across the user journey. As a result, brands would capitalize on fluid shopping
experiences, convert more sales and increase revenue streams.

However, while omnichannel remains one of the most promising strategies in commerce, only a
handful of companies have mastered this art — and derived value from it.

Missing the mark in implementing omnichannel seems to be a never-ending issue, as 89% of

senior executives believe customer expectations are constantly resetting to match their best
omnichannel experiences. In an environment of constant change, it’s clear that the majority of
brands are playing catch-up with customers’ ever-increasing expectations. To change this, it’s
time to reimagine omnichannel commerce.

This white paper explores exactly that. Here, we show how you can drop misconceptions and
pitfalls to design an omnichannel strategy that drives value for your business. With an overview
of emerging trends, core principles, success stories, and more, you can get your omnichannel
strategy right to weather times of uncertainty, differentiate and grow.

We also see real omnichannel commerce actually happening for the very first time. It used
to be that everybody had a digital channel and then a physical channel. And those are two
pretty separate channels. Now, we’re seeing them collapse. And folks are using their commerce
platform or commerce APIs as the point of sale system. We actually see real omnichannel
commerce, which is amazing. So we’ve been talking about it for 20 years, and it’s finally here.
KELLY GOETSCH,
CHIEF STRATEGY OFFICER, COMMERCETOOLS

The Omnichannel Playbook 3

CHAPTER 1

Omnichannel
commerce 101
Get to know the basics of omnichannel commerce
with nuggets of insight on how to shape your strategy.

• A brief evolution: From multichannel to omnichannel

• Top benefits of omnichannel
• Pitfalls to avoid
• Identifying customer journeys to start your omnichannel strategy.

The Omnichannel Playbook 4

 Omnichannel commerce 101

A brief evolution:
From multichannel to omnichannel
First defined in 2011 at Harvard Business Review, omnichannel was originally described as the
way "that retailers will be able to interact with customers through countless channels — websites,
physical stores, kiosks, direct mail and catalogs, call centers, social media, mobile devices, gaming
consoles, televisions, networked appliances, home services, and more.” This definition introduced
a new approach to commerce for brands that remains relevant.

Note that the focus at the time, however, was only on connecting multiple channels and devices
to customer journeys — a classic multichannel approach, as we know it today. In this channel-
centric model, the customer experience is often different for each touchpoint. When customers
switch from one channel to another, there’s no link or data exchanged between them.

Fast forward to today and omnichannel has been redefined; this time, with the customer as the
center of gravity. With an omnichannel strategy in place, customers can interact with a brand
through various touchpoints and switch between different channels during their buying journey.
As consumer expectations evolve, customer-centric omnichannel commerce seeks to create a
holistic and seamless experience that revolves around the customer's needs and preferences.

Multichannel Omnichannel

The Omnichannel Playbook 5

 Omnichannel commerce 101

Indeed, with consumers’ expectations in perpetual metamorphosis, brands face immense

pressure to deliver cohesive customer experiences. The digital shift accelerated by COVID-19 is
also likely to persist with customers continuing to shop online due to their positive experiences
during the pandemic. And yes, consumers now use more channels on their buying journey: More
than half of the customers engage with three to five channels during each journey, increasingly
switching between digital and physical channels.

80%
of US adults want personalization from
retailers with multiple, personalized
touchpoints, including a mobile app,
digital displays and more.
McKinsey
69%
of consumers expect a personal and
consistent customer experience across
multiple physical and digital channels.
Twilio

When customers can easily navigate between channels and receive consistent information and
service, it leads to a positive experience that increases customer loyalty and drives revenue
growth. Omnichannel, in a nutshell, plays a crucial role in shaping your customer experiences and
boosting revenue at the same time.

The million-dollar question is,

how to turn the omnichannel
concept into practice?
And how to leverage the
undeniable benefits omnichannel
can bring to your business?

The Omnichannel Playbook 6

 Omnichannel commerce 101

Top benefits of omnichannel

commerce
Personalization + Improved CX = Loyalty
Customers who switch seamlessly across channels are loyal and spend more. According to
a study by Harvard Business Review, within six months after an omnichannel experience,
customers logged 23% more repeat shopping trips to the retailer’s stores.

With customer data across purchase history, preferred channels and demographics, companies
can shape an omnichannel loyalty program that keeps customers hooked. For instance, Target’s
Circle*, an omnichannel loyalty program, unleashes personalization at scale to tailor promotions,
services and benefits based on individual needs and preferences.

Higher AOV + LTV = Boosted Revenue

Omnichannel commerce is proven to increase AOV (average order value) by 10% and LTV
(lifetime value) by 30% compared to single-channel commerce. These figures demonstrate
the significant impact that omnichannel commerce can have on a business's revenue and
profitability. According to McKinsey, omnichannel customers shop 1.7 times more than shoppers
who use a single channel.

Adaptability = Business Resilience

An omnichannel commerce strategy allows companies to adapt to changing market conditions
and customer needs. Businesses can pivot their operations to meet changing demands, like
offering curbside pickup or same-day delivery. Additionally, omnichannel commerce enables
businesses to leverage data and analytics to gain insights into customer behavior, make data-
driven decisions, optimize operations and anticipate customer needs.

The Omnichannel Playbook 7

 Omnichannel commerce 101

Common pitfalls
You may fall victim to certain pitfalls that prevent you from realizing the full potential of
omnichannel commerce. Here are the most common ones to avoid.

Meeting every customer at every possible touchpoint

“Be where your customers are” is a common omnichannel mantra, but that’s only partly true.
Businesses that try to meet the needs of every customer and every possible touchpoint
are likely to fail due to a lack of focus, competing priorities, siloed initiatives, slow progress
and a hefty price tag. Instead of being everywhere, prioritize and design the omnichannel
experiences for your most important journeys that reach the majority of your customer base.

Focusing on technology/channel rather than customer value

The advancement of technology is behind retail’s most exciting experiences. But sometimes,
brands jump on the hype bandwagon without connecting to customer needs and value. Flashy
innovations make great headlines, but they might bloat costs unnecessarily without delivering
value. If you consider technologies that may work for you, start small with a “crawl, walk, run” (a
methodology approach) and prove the customer value proposition.

Focusing on channel attribution and missing out on the journey

Many companies still fall into the trap of adding new channels without a clear picture of how
they should work together or if they matter to their customers. This siloed approach often leads
organizations to solve channel-level pain points, like a call to customer care or a marketing
email, instead of seeing the big picture.

Moreover, omnichannel is usually blocked by in-store compensation and success metrics,

especially when an online order is fulfilled with store inventory, because the store staff is
compensated or measured on that sale. This classic fight over channel attribution is a roadblock
for companies with ambitious omnichannel goals.

Focusing on digital and underinvesting in other customer-facing channels

While a digital-first approach is often a priority investment, many brands tend to underinvest
in stores and contact centers, which, in turn, ends up hurting their investments in digital. As
physical and digital often interact, brands should up their investments across all channels,
specifically stores.

The Omnichannel Playbook 8

 Omnichannel commerce 101

How to identify what journeys to start

your omnichannel strategy?
Finding suitable cross-channel journeys and prioritizing them is the key to success in your
strategy. According to McKinsey, you can map your journeys and categorize them according to
“propensity to use multiple channels” and “the journey’s importance to customers.”

Journeys that score high in both accounts should be the priority for your business in terms of
omnichannel investments and focus.

Source: McKinsey

The Omnichannel Playbook 9

CHAPTER 2

4 trends shaping
omnichannel
commerce
As businesses expand omnichannel strategies in pursuit of
frictionless customer experiences, here are the top market trends.

• A new role for brick-and-mortar stores

• BOPIS and co. will continue to grow
• The rise of phygital
• A renewed focus on data
• Emerging digital channels to evaluate for your business.

The Omnichannel Playbook 10

 4 trends shaping omnichannel commerce

1. A new role for

brick-and-mortar stores
The exponential increase in digital-first customer journeys doesn’t mean the demise of in-store
shopping. On the contrary, brick-and-mortar stores are going through a renaissance, enabling
customer engagement, experiential retail, hubs for endless aisle and omnichannel fulfillment.

75% 76%
of shoppers want to see, touch, feel and in-store as share of total global retail
try out items in-store. sales by 2026.
Qualtrics Statista

That means in-store shopping won’t go away anytime soon, but it will change and evolve. Stores
are being redesigned as spaces for customers to interact with products and experience the brand
in a unique way.

One such example is the idea of an “endless aisle.” Like a continuum of products stocked across
in-store, online and distribution centers, the customer can access and purchase a product from
any touchpoint, combining mobile point-of-sale technology connected with real-time inventory
data and innovative fulfillment options.

#Trending
American retailers such as Abercrombie & Fitch* have started to use eCommerce transactions
and location data to pinpoint where their most active customers are as a part of their strategy for
opening new stores. That way, brands expect an increase in customer loyalty that can be better
achieved with a local store instead of a digital-only approach.

The Omnichannel Playbook 11

 4 trends shaping omnichannel commerce

2. BOPIS and co. continue to grow

Omnichannel fulfillment strategies such as buy online, pick up in-store (BOPIS), click and collect,
same-day delivery, and curbside pickup, continue to grow even after the pandemic. Customers
benefit from a faster and more flexible shopping experience while reducing the cost of
home delivery.

67% 61%
of US shoppers used BOPIS of customers prefer to return online
shopping in 2022. purchases at a retail location.
Invesp Nosto

For retailers, these strategies help to leverage their store network, reduce inventory costs and
increase sales by encouraging impulse purchases. To achieve this, retailers must have a robust
technology infrastructure and inventory management system.

#Trending
Omnichannel fulfillment models continue to evolve; for example, the American department
store Target* allows customers to return a purchase without leaving their car. Meanwhile, beauty
retailers like Sephora are boosting delivery and pickup options after enormous success during the
COVID-19 pandemic.

The Omnichannel Playbook 12

 4 trends shaping omnichannel commerce

3. The rise of phygital

Phygital, a portmanteau of physical and digital, refers to integrating digital technology into
physical retail spaces to create fluid customer experiences that may include:

Self-checkout Immersive experiences

This technology has grown significantly in
recent years due to increasing customer
demand for contactless transactions, fewer
lines and less waiting time. Brands have
usually implemented self-checkout via
in-store POS devices and mobile apps.
Retailers are experimenting with
interactive displays, virtual try-ons with
augmented reality (AR) and smart mirrors.
Additionally, digital displays and interactive
touchscreens can provide customers with
product information and personalized
recommendations.

Using mobile apps in-store Digital wallets

Customers use retail apps in-store to The use of Apple Pay, Google Pay and
redeem discounts, compare prices, and Paypal is becoming a popular way for
view product ratings and reviews, as well as consumers to pay and are increasingly
find products. playing a role in boosting conversions.

70% 68% 138.7%

of people who first tried
self-checkout during the
pandemic say they’ll
use it again.
McKinsey
of US consumers use their
mobile devices to research
products while shopping in
physical stores.
Klarna
Compound growth rate
(CAGR) of AR/VR use
worldwide from 2018-2023.
Statista

#Trending
At Decathlon*, an automated system powered by RFID (radio frequency identification) identifies
each item and calculates the total amount — without barcode scanning. Customers can simply
drop in the items, pay, pick them up and leave. “Just walk out” tech has also been implemented
at Uniqlo* in the UK, as well as Amazon Go* convenience stores.

The Omnichannel Playbook 13

 4 trends shaping omnichannel commerce

4. A renewed focus on data

Data is at the heart of successful omnichannel commerce. Yet, most businesses aren’t
equipped to collect, organize, govern and use customer insights to drive personalized customer
experiences. In fact, only 61% of leading companies and 37% of laggard organizations have the
real-time data they need to understand the customer at an individual level. The same study shows
that even among leading organizations, almost two-thirds admit they do not excel in designing
"wow" experiences.

60% 43%
of consumers say they will likely become of organizations see accurate, real-time
repeat buyers after a personalized customer data as the biggest challenge to
shopping experience with a retailer. their personalization efforts.
Twilio Twilio

Companies are investing in sophisticated analytics, artificial intelligence and machine learning
tools to gain insights into customer behavior, preferences and purchase patterns. That way, they
can personalize experiences and optimize operations.

#Trending
By managing an incredible amount of data (such as member preferences and purchases), the
American beauty retailer Ulta Beauty leverages data across channels and customer moments
successfully. The company can recommend products and categories that fit individual tastes,
dynamically price goods based on market conditions, and even reduce product catalog updates
from hours to minutes.

*Please note that these brands are mentioned to illustrate emerging trends in 2023 for omnichannel and not necessarily are
commercetools customers.

The Omnichannel Playbook 14

 4 trends shaping omnichannel commerce
What emerging digital channels make
sense to evaluate for your business?
Before investing in particular channels, evaluate the value they should bring to your customer
experiences and how it connects to your omnichannel strategy. While webshops and mobile apps
have become a permanent fixture of eCommerce, other emerging channels are in distinct phases
of adoption.
Social commerce
In-store devices
Voice VR/AR BOPIS
In-car
Innovators Early Early
Adopters Majority
The Chasm
Technology Adoption Lifecycle
Social commerce
While global sales via social media are
forecasted to reach 2.9 trillion USD by
2026, Instagram continues to lead social-
based commerce globally. At the same
time, TikTok has started to partner with
recognized brands, such as Lululemon,
with a series of wellness videos featuring
popular Tiktokers.
Virtual/augmented reality (VR/AR)
VR/AR content saw a 94% higher
conversion rate than products without
that content. More than 90% of Americans
currently use or would consider using
visual search for shopping. Moreover, 79%
of consumers active on the metaverse have
made a purchase. While still in the early
stages, VR/AR is a promising channel for
makeup try-ons, luxury fashion as well
as interior design.
Mobile Webshops
apps
Late Laggards
Majority
Area under the curve
represents number
of customers
Livestreaming shopping
While it’s undoubtedly popular in Asian
markets, it’s in its early stages in the rest
of the world. Nonetheless, it’s expected to
gain traction among consumers globally as
an alternative avenue for discovering and
purchasing new products. In the US alone,
the top 10 livestreaming shopping apps like
Whatnot reached 2.3 million installs in the
first five months of 2022.
Voice assistants
Only 9% of adults in the US ever shopped
via voice in 2020 and 20.8% of consumers
cited "no visual browsing" as a drawback
of voice tech. Despite the initial hype (and
how revolutionary the tech is for visually-
impaired consumers), up to now, voice
commerce hasn’t lived up to its promise.
The Omnichannel Playbook 15
CHAPTER 3

Principles for a
successful
omnichannel
strategy
To amplify seamless customer experiences across channels,
focus on six core principles.

• Customer data & analytics: 360-degree customer view for personalization.

• Real-time inventory visibility: Accurate inventory data available.
• Channel orchestration: Achieve a channel-agnostic journey with APIs.
• One commerce system for all journeys: Seamless experiences stem
from integrated systems.
• Customer-centric organization: people and processes.
• Adaptability: The ability for incremental innovation over time.

The Omnichannel Playbook 16

 Principles for a successful omnichannel strategy

Customer data & analytics

Achieving your omnichannel vision is intrinsically connected with customer data and analytics in
order to personalize and optimize customer experiences. To achieve this, consider the following:

A single view of customer data

Sync what your customers see and how they behave across channels in one customer profile.
Customer profiling involves collecting and analyzing customer data such as demographics,
behavior, purchase history, engagement, preferences and feedback. This helps to create personas
and/or profiles down to the individual level. For example, a retailer can use customer profiling to
send targeted promotions to customers who browse online but prefer to make purchases in-store,
based on their proximity to a store location. Armed with real-time analytics, you can create the
journeys your customers wish to engage with the brand. Also important: Offer similar capabilities
to customer-facing employees in order to optimize customer interactions.

Artificial intelligence and machine learning

Leverage AI and ML algorithms to collect and analyze real-time data from various channels.
Identify patterns, trends, and correlations that would be difficult to identify manually. Best
practices for using AI and ML in omnichannel commerce include investing in a robust data
management infrastructure, ensuring data quality and consistency, and automating processes.

Real-time inventory visibility

Real-time inventory visibility provides customers with a more convenient and personalized
shopping experience — an essential element to build brand loyalty and repeat business.
Retailers also benefit from reducing stockouts and overstocking, which can lead to significant
cost savings and improved inventory accuracy. Additionally, retailers can leverage physical stores
as fulfillment centers, reducing the cost and time of shipping products from a central warehouse.

Despite the obvious benefits, inventory visibility remains one of the biggest challenges in
omnichannel, as incorrect inventory data negatively affects both physical and digital experiences
and reduces customer confidence in omnichannel fulfillment offerings like BOPIS. Inaccurate
inventory stems from siloed data stored across multiple systems in the organization, preventing
companies from pushing the data out to all channels without inconsistencies. And with 66% of
customers in the US and UK, 68% in Germany and 71% in Australia checking inventory before
going to the store, it’s clear that real-time inventory visibility across channels is vital.

The Omnichannel Playbook 17

 Principles for a successful omnichannel strategy

Channel-agnostic orchestration
with APIs
Perhaps the most common FAQ in the omnichannel space is: How can businesses orchestrate
a seamless experience? Clearly, omnichannel experiences require each component to work
in harmony — much like an orchestra playing a symphony. At the heart of omnichannel is
coordinating data to create a single stream of information for customers — aka, an API.

Without getting too technical about it, an API (application programming interface) is basically how
systems exchange information and communicate with one another. Achieving this orchestration is
possible when all channels are connected to one centralized commerce system where all data is
stored, consuming a single information stream instead of disparate flows.

One commerce system for all journeys

Still today, many businesses rely on POS (point of sale) systems to manage and process
transactions in physical stores, and an eCommerce platform to handle online sales. This
fragmented IT landscape increases the risk of brands running into inconsistencies in product,
pricing, customer and inventory data management, as well as making it difficult to gain a holistic
view of their customers. Avoiding this is possible by using one commerce system for all journeys,
whether online, mobile or in-store.

The Omnichannel Playbook 18

 Principles for a successful omnichannel strategy

The advantages of a single commerce system

• Customer data, purchase history and preferences can be accessed and used to
personalize interactions both online and in-store.
• Simplify inventory management, as a single system can track stock levels and update
them in real-time, reducing the risk of overselling or underselling products.
• Establish a company-wide point of reference for product information.
• Eliminate inconsistencies between systems.
• Eliminate redundant integrations and channel-specific systems.

Customer-centric organization
Delivering exceptional customer experiences is more than crunching data in order to establish
what customers want and how. After all, customer experience is not solely driven by the CX team.
Rather, it encompasses the entire organization, from top to bottom. This “customer centricity” can
be achieved by a mix of investments and initiatives in training, upskilling, tools and incentives.
Also, organizing teams around customer journeys may prove beneficial, so companies can break
down silos and promote an agile mindset that can quickly address customer needs.

When businesses don’t invest in customer centricity, investments in omnichannel may easily
backfire. For example, numerous retailers swiftly adopted BOPIS but failed to adjust their staffing
and incentives accordingly. The result for many was long queues of discontented customers
waiting for overburdened employees to retrieve items from the stockroom. Achieving a customer-
centric mindset is only possible when employees are empowered to do so.

Adaptability
Companies must be agile and flexible to keep pace with a rapidly changing landscape, being able
to personalize customer experiences across channels, and taking into account customer data and
feedback. To achieve this, companies must also focus on incremental innovation by continuously
testing and refining their strategies to stay ahead of the curve.

Becoming adaptable in omnichannel is possible by incorporating constant change as a tool

instead of a threat with a shift to a “composable business.” Gartner® states that embracing
composability is when “everything is designed to change, and change is considered often, to
achieve large and small outcomes, eyeing both growth and resilience.” That means everything is
modular and changeable, so companies are faster and more adaptable over time.

With composable commerce, you can set your sights on an adaptable omnichannel
implementation that moves along with your customer and business needs.

The Omnichannel Playbook 19

CHAPTER 4

The
omnichannel-ready
engine: Composable
commerce
Instead of disjointed platforms that aren’t in sync,
composable commerce provides a modern approach
that perfectly fits the needs of customer-centric
omnichannel experiences.

• What’s composable commerce?

• Why is composable commerce the engine
behind omnichannel?
• Best practices: Using composable commerce
to scale omnichannel experiences at
Harry Rosen and Ulta Beauty.

The Omnichannel Playbook 20

 The omnichannel-ready engine: Composable commerce

What’s composable commerce?

Composable commerce is a modular development approach that enables brands to leverage
best-of-breed building blocks such as search, cart or checkout (also known as packaged
business capabilities or PBCs) and “compose” them according to their needs. Think of it
as LEGO bricks that provide infinite combinations, offering custom and unique ways to
differentiate your business.

Instead of restricting you to the standardized features from all-in-one platforms that may or may
not suit your needs, composable commerce provides interchangeable building blocks (basically, a
library of commerce APIs) that allow you to create a customized technology stack.

The 4 pillars of composable commerce

Modular: Select best-of-breed building blocks for unique business needs,

assembling a customized technology stack. Plug, scale and swap components at any
moment without affecting other applications or your infrastructure.

Flexible: Create, update and customize solutions with your chosen components
whenever you want, however you want.

Open: With a modular and flexible architecture, you have the freedom to select
vendors that offer the commerce solutions required for your specific business needs.
You can say goodbye to vendor lock-in!

Future-proof: Being able to tailor the tech stack with swappable components
means staying ahead of new market opportunities and changing customer needs.

The Omnichannel Playbook 21

 The omnichannel-ready engine: Composable commerce

Why is composable commerce the

engine behind omnichannel?
Businesses can orchestrate their omnichannel strategies more effectively with composable
commerce due to the following elements:

• A single commerce backend: Instead of disparate systems that don’t communicate

with each other, have one commerce system as the single source of truth for your data —
customer, product, inventory and more. That way, you can collect, view and analyze data
from multiple sources, such as purchase history and inventory, in one place.
• Flexibility and agility: By decoupling the frontends (the customer-facing touchpoints)
from the commerce backend, businesses can easily add, manage and even drop
touchpoints. Also, companies can modify user interface design to fit specific contexts,
language and channels, without reconfiguring everything on the tech side.
• Faster time to market: A modular architecture enables businesses to develop and update
some features at speed, achieving higher scalability and lower costs.
• Real-time data exchange: Using API-driven integration to connect different applications
enables real-time and consistent data exchange and channel orchestration.
• Flexible data modeling: Because of the diverse data sets from various channels, the ability
to consume and store relevant data together is essential to achieve real-time reactions,
as well as avoid data duplication and silos. With flexible data modeling, businesses can
structure their data in a way that accommodates unique requirements.

Experimenting with generative AI with composable commerce

The rise of generative AI such as ChatGPT is transforming digital commerce with its capability
to create new content. Composable commerce enables companies to take advantage of rising
technologies like generative AI right off the bat, so you can embrace new trends and experiment
at ease without risk to daily operations.

By using an API-first architecture, you can leverage the capabilities of AI to enrich product
catalogs by integrating a product description generator able to create compelling product
descriptions and publish them across touchpoints.

No one has a crystal ball that predicts what the future will bring — all we know is that change is
constant and brands must be ready to adapt at all times. Today, it’s generative AI. Tomorrow, it
will be something completely different. The beauty of composable commerce is that no matter
what comes next, you’ll be ready.
MIKE SHARP,
CHIEF PRODUCT OFFICER, COMMERCETOOLS

The Omnichannel Playbook 22

 The omnichannel-ready engine: Composable commerce

Marrying physical and digital

at Harry Rosen

Do we choose to reclaim our destiny and finally do things digitally the way we believe
Harry Rosen should be doing it?
TOVI HEILBRONN,
DIRECTOR DIGITAL PRODUCT & EXPERIENCE, HARRY ROSEN

Like many companies during COVID-19, the Canadian luxury menswear retailer Harry Rosen
was caught off guard by strict lockdowns. A part of the company’s DNA is in-store personalized
consultations, so its concierge-like service became severely disrupted as stores closed for
months. The brand was able to create omnichannel journeys that include:

“Get the look”

The brand turned the images of its quarterly fashion magazine into shoppable moments. Every
head-to-toe image online has a "Get the Look" button and print images have QR codes; both
take the customer directly to a shopping list prepopulated with the exact items in the photo.
Customers select the right sizes, add to their cart and check out. If the customer doesn’t want
that exact item or price point, there’s even a "Shop similar styles” button. This feature is delivering
a 300% lift in content page value.

Digitized style consultations

Traditionally, advisors would prepare for appointments by pulling outfits and laying them out on
a countertop for their clients to review. Today, advisors create the same experience digitally, by
putting together curated looks on a personalized webpage based on the client’s needs and size.
All the client has to do is hit "add to cart" and "checkout." These "lay down" looks account for 10%
of all digital sales and have a 3x lower return rate than when customers make their own choices.

The Omnichannel Playbook 23

 The omnichannel-ready engine: Composable commerce

Using data, AI and AR at Ulta Beauty

We’re really excited about taking the virtual and using the camera, and instead of turning it
towards your face, you’re turning it towards the store and really augmenting our physical store
experience. The store is already buzzing with energy, but how awesome if you can also use your
phone to bring other content and digital experiences to life?
PRAMA BHATT,
CHIEF DIGITAL OFFICER, ULTA BEAUTY

While brick-and-mortar retailers were particularly hard hit by the pandemic, Ulta Beauty took it
as a chance to learn from its data insights and doubled down on using mobile devices and digital
capabilities to enhance omnichannel shopping experiences.

With this in mind, Ulta Beauty is creating

fun, functional and personalized shopping
experiences that can be used regardless
if the shopper is at home, on the go or in
a store, such as its Virtual Beauty Advisor
for personalized recommendations and
GLAMLab for virtual makeup try-ons
powered by augmented reality (AR) and
AI. Machine learning algorithms detect
a shopper’s face in the camera lens and
computer vision applies a final 3D makeup
look that moves with their expressions.

By managing an incredible amount of data — such as member preferences and purchases — with
ultra-low latency data processing even during volume upticks, the company can leverage data
across channels and customer moments successfully. With a scalable composable commerce
infrastructure behind the scenes, Ulta Beauty can recommend products and categories that fit
individual tastes, dynamically price goods based on market conditions, and even reduce product
catalog updates from hours to minutes.

Pivoting to the cloud was also paramount to implementing an omnichannel strategy that is
responsive, no matter how much traffic is hitting the system. Auto-scaling has enabled Ulta
Beauty to leverage data at warp speed no matter the channel while saving costs.

The Omnichannel Playbook 24

CHAPTER 5

Actionable
insights
Here’s how you can put insights into action.

• Key takeaways
• Omnichannel strategy checklist
• Next steps with commercetools Composable Commerce
• Keep exploring our vast resources and expand your knowledge.

The Omnichannel Playbook 25

 Actionable insights

Key takeaways
Omnichannel commerce is the foundation for brands of any industry or size to create fluid and
personalized customer experiences. Here’s an overview of how you can unlock this potential.

#1 The secret of omnichannel is a mix of many factors

Getting omnichannel right needs to balance technology and data, company culture, and a
change-friendly mindset for long-term success.

#2 Implementation is not a one-off project

Customer expectations and journeys are always changing. Being adaptable in an environment of
constant change is crucial.

#3 Focus, focus, focus

Don’t try to fix everything at once. Setting priorities will help you leverage the most important
journeys for your customers — and the channels that are more important for them.

#4 Switch the paradigm from channel to journey

Instead of putting your focus on channel attribution, take the view from the customer journey
perspective. This approach will help you understand how customers interact with the channels,
the pain points they face and the outcome they’re looking for.

#5 Go composable
The modularity and flexibility of composable commerce are true advantages to getting
omnichannel right, enabling you to address all the six omnichannel pillars appropriately.

The Omnichannel Playbook 26

 Actionable insights

Omnichannel strategy checklist

What are the steps required to implement an omnichannel commerce strategy? Here’s a
comprehensive checklist to help you in this journey.

1. Define your goals and strategy

■   Define the vision and goals for your customer experience, as well as the positioning
relative to competitors.
■   Define the Northstar of your omnichannel strategy, e.g., focusing on in-store/online
experiences, personalization at scale, etc.
■   Analyze your competitors, identifying the strengths and weaknesses of their
omnichannel strategies.
■   Define hard and soft KPIs to track successes and failures.
■   Get organizational buy-in.

2. Boost customer-centricity goals across the organization

■   Define how customer centricity fits your people strategy.
■   Restructure the company’s organizational structure based on key customer journeys.
■   Provide appropriate tooling, e.g., in-store mobility devices and data access
to employees as the baseline to interact with customers.
■   Create training and upskilling programs.
■   Boost employee incentives, rewards and performance metrics in connection
with customer centricity.

3. Determine your technology strategy

■   Identify the technologies and platforms involved in your omnichannel strategy with a
composable approach. That may include a centralized commerce platform, inventory
management/order management systems, CRM tools and data management
and analytics systems.
■   Implement a single source of truth in commerce across digital and in-store channels,
connecting it with a centralized order management system (OMS) and product management
information (PIM) to achieve real-time inventory visibility across touchpoints.
■   Connect the POS (point of sale) system with the centralized commerce platform.

4. Determine a customer data strategy and implementation

■   Create a single view of customer data with centralized profiling accessible
across channels (central data pool).
■   Implement analytics for real-time insights into customer behavior and preferences.
■   Leverage artificial intelligence and machine learning to collect andanalyze large amounts
of data to identify patterns, trends and correlations across channels.
■   Create a personalization strategy.

The Omnichannel Playbook 27

 Actionable insights

5. Listen to the customer and map the journeys

■   Use customer surveys, interviews and baseline data analysis to understand customers’ goals,
behaviors and frustrations.
■   Map customer pain points within channels and in the hand-offs between them.
■   Map all the customer journeys, touchpoints and channels.
■   Identify areas that cause frustration for both staff and customers.
■   Collect and analyze customer insights on their experiences with the technology used.
■   Identify potential new services desired by customers and understand why
they want those experiences.
■   Identify areas that can be further personalized and the data required.

6. Determine the most valuable customer journeys and the channels that matter
■   Use customer data and mapping to discover the most important journeys from the customer's
POV and their propensity to use multiple channels.
■   Determine the journeys that drive the highest value creation, aligning with strategic
and customer priorities.
■   Prioritize the most relevant journeys and the channels the customers currently use,
as well as desired ones.
■   Deprioritize less valuable journeys and/or that don’t require a strong omnichannel focus.
■   Track engagement behaviors, such as activity on the company’s website and app, chats,
inbound calls, visits to the brick-and-mortar store and fulfillment.
■   Design each journey from the customer's POV. Take into account how each step leads to
another, the required data, the channels that can be implemented or optimized,
and personalization tactics.
■   Boost performance by optimizing mobile and device responsiveness, fast loading times
and providing an intuitive user interface.

7. Rollout, measure and adapt

■   Test one journey as a starting point, measuring what worked and what didn’t.
■   Incorporate improvements, including customer feedback, into the final journey design.
■   Roll out the journey, monitoring performance according to defined KPIs.
■   Identify improvement points, adapting features and touchpoints over time.
■   Roll out additional journeys identified as crucial for your business.

The Omnichannel Playbook 28

 Actionable insights

Next steps
Regardless if you’re just starting to explore omnichannel or already knee-deep into your strategy,
a composable approach powered by commercetools can help bring your omnichannel initiative
to life successfully as you can:

• Connect your multiple channels to a centralized commerce system.

• Orchestrate suppliers, marketplaces, customers and back-office through one commerce
engine.
• Enable a true omnichannel experience for your staff, customers, suppliers and partners.
• Enable B2B, B2C, marketplace andsocial channels.
• Connect unlimited digital touchpoints and orchestrate them via an API-first approach.

Are you ready to start your omnichannel strategy with commercetools Composable Commerce?
Learn more about composable commerce and get in touch with us.

The Omnichannel Playbook 29

 Actionable insights

Continue exploring
If you’d like to learn more about omnichannel experiences and composable commerce, keep
reading the vast resources made available for you.

Blogs
• What is composable commerce and why does it matter?
• 3 customer journeys at Harry Rosen with composable commerce
• Hey Google, what do shoppers want and how do I deliver it?
• Behind digital commerce is an ocean of data. Are you ready to navigate it?
• How commercetools APIs make it easy for brands to experiment with new innovations like
AI-generated product descriptions

White papers
• How to Compose Your Commerce in 2023
• Reimagining Retail Commerce in 2023
• Demystifying digital marketplaces

Webinars
• MARS: Driving M&M’s CX and growth with a build & buy approach
• Pret A Manger: Digital & Business Transformation
• Treat any day like Black Friday

The Omnichannel Playbook 30

About commercetools
The inventor of headless commerce, commercetools is an innovative technology
disruptor that has established itself as an industry-leading eCommerce software provider.
Today, some of the world’s most iconic brands and growth-focused businesses trust
commercetools’ powerful, flexible, scalable solutions to support their ever-evolving digital
commerce needs. As the visionaries leading the modern MACH (Microservices-based,
API-first, Cloud-native and Headless) architecture movement, commercetools provides
customers with the agility to innovate and iterate on the fly, merge on and off-line channels,
drive higher revenue, and future-proof their eCommerce business.

Based in Munich, Germany, with offices in Europe, Asia and the United States,
commercetools is singularly focused on leading a future of limitless commerce possibilities.

More information at commercetools.com.

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The Omnichannel Playbook 31