Omni-Channel Strategy in the Digital Retail Environment

Abstract

The evolution of technology has impacted how businesses structure their channels. Companies must adapt to integrated channels, both offline and online, to effectively connect with customers. This strategic approach, commonly referred to as the omni-channel for all the entire pages strategy, is particularly pertinent in the retail sector, where its implementation promises to revolutionize the customer experience. Multi-channel integration is a key characteristic of omni-channel retailing aimed at achieving consistency across various channels. Ultimately, the adoption of an omni-channel strategy represents a strategic imperative for retail companies seeking to thrive in the digital era, where customer experience reigns supreme. This chapter describes explore the channel evolution, the implementation omni-channel strategy in the retail, and how to integrate the multi-channel to embrace a uniform customer-centric model. Therefore, the objective of employing omni-channel strategies is to achieve consistency of experience for customers across all channels owned by retailers. When executed effectively, this approach ensures that customers satisfaction and fosters loyalty.

1. Introduction

In an era defined by rapid technological advancements and shifting customer preferences, the retail landscape has undergone a profound transformation. With the proliferation of digital technologies and the rise of online shopping platforms, customers now have unprecedented access to a wide array of products and services, often spanning multi-channels and touchpoints. In response to these evolving customer behaviors, retailers have increasingly turned to omni-channel strategies to navigate the complexities of the digital retail environment.

Retail omni-channel enables customers to benefit from the integration of various retail channels and provides better customer service, leading to increased sales and higher loyalty [1, 2]. Omni-channel retailers are those who operate a retail business model across various online and physical channels with synergistic integration to provide a seamless and boundary-less shopping process across all channels [3, 4]. Nowadays, customers traverse multi-channel during their purchasing process [4, 5]. Customers may seek information on online channels or websites, check prices on mobile apps, and make purchases in physical stores. Pricing information, promotional offers, product details, shipping details, customer transaction details, and even company logos, images, and service features are updated simultaneously across all channels to deliver a uniform experience [6].

The changing behavior and expectations of customers necessitate retailers to integrate all their channel activities across information exchange, collaborative operations, logistics, pricing, promotions, inventory, order fulfillment, and even after-sales service through their omni-channel strategies [7, 8]. Thus, it can be said that channel integration enhances customer satisfaction and loyalty [9] and that technology can be leveraged for data collection in the omni-channel environment [10].

The relationship between retail and its developmental phases is closely tied to the advancements in digital technology. This chapter will delve into the evolution of retail, comparing the phases of multi-channel and cross-channel to the adoption of omni-channel retailing. Subsequently, a more detailed explanation of omni-channel retailing will be provided, drawing upon various concepts explored in academic literature and outlining several characteristics of omni-channel retail. As an embodiment of omni-channel retailing, multi-channel integration is a prerequisite for achieving a consistent customer experience, which will be elaborated upon in the following section. Several dimensions have been developed by experts regarding how to measure effective multi-channel integration for application across various industries. In this regard, the author’s study has focused on department store retail in Indonesia, which has implemented multi-channel integration in aspects such as integrated promotion, integrated product and price, integrated transaction information, integrated information access, integrated order fulfillment, and integrated customer service. These findings will be discussed in more detail in the discussion section, where the research conducted by the author will intricately explore the relationship between multi-channel integration in omni-channel retailing to enhance customer satisfaction and loyalty. This chapter has also reviewed scholarly studies from reputable journals to supplement the author’s research.

This chapter is structured as follows. The research methodology is briefly discussed in the next section, which will provide a descriptive explanation of the evolution of retail, omni-channel retailing, and multi-channel integration. Subsequently, the discussion section will explore the relationship between multi-channel integration and its impact on customer satisfaction and loyalty, as previously investigated by the author. Several pieces of literature will be linked based on the findings of the researcher’s studies. Furthermore, limitations of the research conducted will be outlined.

2. Research methodology

This chapter delves into the dynamic landscape of retail, which has undergone significant transformations propelled by the emergence of digital technologies. These changes have reshaped the way businesses interact with customers and operate across multiple channels, signifying a notable evolution in the realm of retail. The research presented here represents an ongoing perspective that necessitates adaptation of substantial resources, particularly in the realm of customer behavior. It embodies a qualitative exploratory approach drawing insights from various academic research sources. Utilizing a review of academic literature, including published online articles, this research seeks to contribute to the scholarly discourse surrounding omni-channel strategy and its relevance in the digital retail landscape.

In this chapter, the research also delves into the previous studies conducted by the author, examining the role of multi-channel integration in implementing omni-channel strategies within the department store retail environment in Indonesia. Furthermore, it comprehensively discusses the relationship between multi-channel integration and customer loyalty through satisfaction, as well as research previously conducted by the author.

3. Digital retail environment

3.1 Channel evolution

Traditional retail is no longer the sole choice for customers seeking products. Research indicates a shift in customer channel preferences, with 55% of customers browsing and inspecting products in-store before making purchases online [11]. This trend has prompted companies to adapt by making changes or additions to their marketing channels. Previously reliant solely on traditional brick-and-mortar, companies are now incorporating online channels into their strategies.

In today’s rapidly evolving retail landscape, the convergence of digital technologies and customer behavior has reshaped the way businesses engage with their customers. As shoppers increasingly demand seamless and integrated experiences across various channels, retailers are compelled to adopt innovative strategies to stay competitive. One such strategy that has gained prominence is the implementation of an omni-channel approach within the digital retail environment. This approach emphasizes the seamless integration of physical and digital channels to create a unified and cohesive shopping experience for customers.

Channels are defined as distinct touchpoints where companies and customers interact [12, 13]. Customers have a multitude of channel options at their disposal, encompassing sales force interactions, physical outlets (such as retail branches, stores, depots, and kiosks), telephone services (both traditional and call center), direct marketing avenues (including direct mail, radio, and traditional TV), e-commerce platforms (accessible through email, internet browsing, and interactive digital TV), and m-commerce platforms (via mobile phones, SMS, and text messages, as well as 3G services) [14]. However, according to Liu et al. [15], broadly speaking, channels can be divided into four categories: offline channels (like physical stores and catalogs), online channels (including email and websites), mobile channels (through applications), and other touchpoints (such as social media).

Indeed, the retail sector is experiencing a significant evolution in channel forms. This movement reflects the changing preferences and behaviors of customers, driven largely by advancements in technology and shifts in lifestyle. Traditional brick-and-mortar stores remain a vital component of the retail landscape, but alongside them, there has been a proliferation of digital channels such as e-commerce websites, mobile apps, and social media platforms.

The rise of e-commerce has been particularly transformative, offering customers the convenience of shopping anytime, anywhere, and often at lower prices. Mobile commerce, facilitated by smartphones and tablets, has further accelerated this trend, allowing customers to make purchases on the go. Social commerce, where customers discover and purchase products through social media platforms, has also gained traction, blurring the lines between social interaction and shopping.

Moreover, the concept of omni-channel retailing has emerged as a strategic imperative for retailers, aiming to provide customers with a seamless and integrated shopping experience across multi-channels. This approach acknowledges that customers expect consistency and convenience, whether they are shopping online, in-store, or through mobile devices. Retailers are thus investing in technologies and infrastructure to unify their digital and physical channels, enabling features such as click-and-collect, in-store pickups for online orders, and personalized recommendations based on past purchase history.

Omni-channel retailing is an evolution of multi-channel and cross-channel retailing, requiring seamless and comprehensive channel integration. Below is an overview of the evolution of channel forms (Table 1).

	Multi-channel	Cross-channel	Omni-channel
Definition	Operating multi-channels as independent entities to align channels with specific target customer segments.	Cross-channel integration enables multi-channels and customer touchpoints to synergize.	Customers are free to choose from all parallel channels, seamlessly switching between different channels throughout their shopping journey.
Channel scope	Stores, websites, and mobile channels	Multi-channels, but not all channels are widely spread.	Stores, websites, mobile channels, social media, and all other customer touchpoints (including mass communication channels like TV, radio) serve as information and transactional touchpoints.
Channel integration	No channel switching.; Using channels in parallel	Allow cross-channel customers.; Synergy across channels.	Seamless switching between all channels and touchpoints.; Using channels simultaneously.
Customer interaction	No possibility of triggering interaction.; Customer–channel interaction.	Partial interaction can be triggered.; Customer–channel interaction.	Full interaction can be triggered.; Customer–brand–channel interaction.
Channel goals	Channel-specific goals such as sales per channel. Channel-specific experience	Synergy between channels.	Overall customer experience, total sales through channels.
Channel management	Maximizing performance of each channel—physical, telephone, web, and mobile.	Channel conflict management, emphasizing channel boundaries and minimizing potential shifts during cross-channel occurrences.	Synergistic channel and touchpoint management optimizing customers toward a holistic shopping experience.

Table 1.

Channel evolution.

Source: Nguyen [16].

The evolution of retail can be understood through the progression from multi-channel to cross-channel and finally to omni-channel retailing:

1. Multi-channel retailing: Multi-channel retailing refers to the practice of selling products through multi-channels, such as physical stores, catalogs, websites, and call centers, among others. Each channel operates independently, with its own inventory, pricing, and promotions. Customers may interact with the retailer through different channels, but there is limited integration between them. Multi-channel retailing allows retailers to reach customers through various touchpoints, but it may result in inconsistencies in the shopping experience across channels.

2. Cross-channel retailing: Cross-channel retailing involves integrating different channels to provide customers with a more cohesive shopping experience. In cross-channel retailing, customers may research products online, visit a physical store to make a purchase, and then return or exchange items through the retailer’s website. While there is some level of integration between channels, it may not be seamless, and there may still be gaps in the customer experience. Cross-channel retailing aims to provide customers with more options and flexibility in how they shop, but it may still fall short of delivering a truly integrated experience.

3. Omni-channel retailing: Omni-channel retailing represents the most advanced stage of retail evolution, where all channels are seamlessly integrated to provide customers with a unified and consistent shopping experience. In omni-channel retailing, customers can move seamlessly between channels, with their preferences, shopping history, and cart contents synced across all touchpoints. Retailers use data and analytics to personalize the shopping experience for individual customers, offering targeted promotions and recommendations based on their behavior and preferences. Omni-channel retailing aims to provide customers with maximum convenience and flexibility while driving engagement, loyalty, and sales for retailers.

In summary, the evolution of retail from multi-channel to cross-channel and finally to omni-channel represents a progression toward greater integration, personalization, and seamlessness in the shopping experience. Omni-channel retailing represents the pinnacle of this evolution, offering customers a truly integrated and cohesive shopping experience across all channels.

This is illustrated as follows [17].

Likewise, as Figure 1 shows how customers use channel usage behavior in each different form of retail. This image shows the methods used by customers when combining shopping channels.

Figure 1.

Evolution of customer channel usage behavior.

3.2 Omni-channel retailing

Current customers expect a seamless shopping experience that integrates various channels based on to customers’ preferences, and omni-channel retailing is the way retailers meet these expectations. Omni-channel retailing provides customers with the ability to order online for in-store pickup, utilize in-store kiosks for online ordering, access a wider range of products, receive in-store assistance conveniently, and access websites that provide information on product availability in-store and locations.

Omnis is a Latin word meaning “all” or “universal,” so omni-channel refers to “all channels together” [18]. Here are some definitions of the omni-channel retailing concept (Table 2).

Authors	Omni-channel retail concept definition
Rigby ([19], p. 4)	Omni-channel retailing is a sales experience that blends the benefits of physical stores with the rich information available online.
Levy et al. ([20], p. 67)	Omni-channel retailing is a coordinated multi-channel offering that provides a seamless experience when utilizing all retail channels.
Lazaris and Vrechopoulos ([21], p. 2)	Omni-channel retailing is the utilization of both physical and online channels combined to create a seamless shopping experience.
Beck and Rygl [22]; Sealey [23]	Omni-channel retailing refers to the activities involved in selling goods or services across all channels, where customers can initiate full-channel interactions and/or retailers control the full integration mix of all physical and digital channels to create an innovative and integrated customer experience.
Verhoef et al. ([24], p. 176)	Omni-channel management is the synergistic management of various available channels and customer touchpoints, ensuring that the customer experience across channels and performance through channels are optimized.
Cummins et al. ([25], p. 5)	Omni-channel marketing (in the context of sales) is the synergistic integration of customer touchpoints and communication opportunities to create a unified brand experience regardless of channels, platforms, or stages in the sales process.
Blom et al. ([26]. p. 287)	Omni-channel management is a way to create a consistent retail experience across all channels and touchpoints.
Huré et al. ([27], p. 315)	Omni-channel shopping refers to the comprehensive synchronization of diverse channels and touchpoints, culminating in an optimal brand customer experience.
Shen et al. ([28], pp. 62, 63)	Omni-channel service encompasses a service model enabling customers to flexibly select from various concurrent channels and transition seamlessly between them, ensuring continuity of information and minimizing redundancy. This concept advances from multi-channel approaches, emphasizing the integration and harmonization of distinct channels to cater to customers’ preferences for smooth channel transitions.

Table 2.

Omni-channel retail concept.

Source: Rodríguez-Torrico et al. [29].

In broad terms, it can be summarized that omni-channel retailing represents the integration of channel services offered by companies to ensure a smooth experience across all channels.

According to Cummins et al. [25], omni-channel retail has the following characteristics:

1. Customers choice: Customers have the freedom to choose their preferred shopping journey, allowing flexibility in their shopping experience.

2. Synergistic channel development: Retail channels are developed synergistically, integrating them from start to finish rather than developing them separately.

3. Incorporation of digital channels: Digital channels are integrated into the retail offering as a natural extension of online services, creating a holistic shopping experience for customers.

4. Advanced customers segmentation: There is sophisticated customers segmentation, with no assumption that each customers is locked into a single channel but rather segmentation based on individual preferences and behaviors.

5. Single universal brand image: Omni-channel retail develops a single brand image and product portfolio that encompasses all channels, contrasting with approaches that separate brands and offerings across different channels.

6. Enhanced service modulation: Services in omni-channel retail are modulated to facilitate smooth transitions between channels, eliminating the requirement for customers to be locked into individual channels.

7. Online complementary development: There is development of online services that complement physical services, creating continuity between online and offline experiences for customers.

In an omni-channel approach, customers have the flexibility to start their shopping journey in one channel and continue or complete it in another without any disruption. For example, a customer may browse products online, add items to their cart via a mobile app, and then choose to pick up the items in-store or have them delivered to their home. This strategy requires businesses to synchronize their inventory, customer data, marketing efforts, and overall branding across all channels. By doing so, they can offer personalized recommendations, targeted promotions, and a unified brand experience to customers, regardless of how they choose to engage with the brand.

Ultimately, the goal of omni-channel is to enhance customer satisfaction, loyalty, and engagement by providing a convenient, consistent, and cohesive shopping experience across all channels. It allows businesses to meet customers wherever they are and cater to their preferences, ultimately driving sales and fostering long-term relationships with customers.

3.3 Multi-channel integration

Multi-channel integration is a comprehensive approach to channel management that focuses on delivering a seamless experience for customers across all channels of a retail [30, 31]. Multi-channel integration involves the challenge of aligning various channels owned by a company, often managed by different managers. This presents a challenge for a company to synchronize its channels effectively. Integration stands as a crucial strategy for optimizing all channels to achieve the desired level of profitability. The integration of channels involves the capability, skills, and competence of retailers in managing the infrastructure they possess, including physical stores, hardware and software technologies, systems, warehouses, and others, which are prerequisites for an omni-channel system. Physical stores serve as a significant operational resource, and companies are expected to enhance their appeal to remain competitive. Additionally, online stores offer an alternative avenue for customers, providing convenience in terms of time, energy, and operational cost savings. Customers have the flexibility to choose the channel that best suits their preferences from those provided by the company. Multi-channel integration is described as having several dimensions as follows (Table 3).

No	Study	Multi-channel integration dimension
1	Gao et al. [32]	Integrated promotion, integrated product and price, integrated transaction information, integrated information access, integrated order fulfilment, and integrated customer service
2	W. Lee [33]	Integrated promotion, integrated product and price, integrated transaction information, integrated order fulfilment, and integrated customer service; integrated information access
3	Iftikhar et al. [34]	Integrated promotion, integrated product and price, integrated transaction information, integrated order fulfilment, and integrated customer service
4	M. Zhang et al. [5]	Integrated promotion, integrated product and price, integrated transaction information, integrated order fulfilment, and integrated information access
5	Jiang et al. [35]	Integrated information access, integrated customer service, and integrated channel access
6	Dennis Herhausen et al. [36]	Integrated information access and physical integrated
7	Oh et al. [37]	Integrated promotion, integrated product and pricing, integrated transaction information management, information management, integrated order fulfilment, integrated customer service and integrated information access
8	Schramm-Klein [38]; Schramm-Klein et al. [39]	Integrated marketing communication and integrated product fulfilment
9	Oh and Teo [40]	Integrated product information, integrated transaction information, integrated order fulfilment, integrated marketing communication, integrated product fulfilment, and integrated customer service
10	Bendoly [41]	Integrated information and physical integrated
11	Goersch [31]	Integrated promotion, integrated branding, consistency, integrated logistics, mci integration and its implications for retail websites, and integrated information management

Table 3.

Multi-channel integration dimension.

3.3.1 Integrated promotion

Promotional data should be shared and available across all channels, ensuring consistency in product/brand names, logos, and slogans. Promotions should utilize different channels simultaneously [34, 37]. Multi-channel retailers provide promotions on specific channels only, whereas omni-channel retailers offer special promotions that can be accessed and used across all channels [31]. For example, customers can use discount coupons or SMS vouchers in offline stores, receive shopping coupons in offline stores, and use them for purchases on the retailer’s mobile app or website.

Integrated promotions entail the connection and synchronization of sources and channels, linking market data and promotions. Ideally, all promotional data sources should be shared across different channels and agents. Consistency in product/brand names, logos, and slogans is crucial, and publicity from one channel should be leveraged in another for cohesive brand messaging. Each channel should actively promote cross-channel promotions to create a consistent brand identity across all touchpoints [42].

Integrated promotion in the context of omni-channel marketing refers to the coordinated and cohesive approach to promotional activities across various channels used by a company. It involves synchronizing promotional messages, offers, and campaigns across online and offline channels to provide a unified and seamless customer experience.

Some key aspects of integrated promotion omni-channel include:

1. Consistent messaging: Ensuring that promotional messages and branding elements are consistent across all channels, including traditional advertising, digital marketing, social media, email campaigns, and in-store promotions.

2. Coordinated campaigns: Planning and executing marketing campaigns that span multi-channels and touchpoints, ensuring that the messaging and timing are aligned to create a cohesive brand experience for customers.

3. Cross-promotion: Leveraging different channels to cross-promote products, services, and promotional offers, allowing customers to engage with the brand across various touchpoints and channels.

4. Personalization: Using customer data and insights to personalize promotional offers and messages, delivering relevant and targeted promotions based on customer preferences, behavior, and purchase history.

5. Seamless experience: Providing a seamless and integrated experience for customers as they interact with the brand across different channels, ensuring that they can easily access promotions, redeem offers, and make purchases regardless of the channel they choose.

6. Data integration: Integrating data from various sources and channels to track the effectiveness of promotional activities, analyze customer behavior, and optimize marketing strategies across the omni-channel landscape.

7. Omni-channel loyalty programs: Implementing loyalty programs that are integrated across all channels, allowing customers to earn and redeem rewards seamlessly whether they shop online, in-store, or through other channels.

By adopting an integrated promotion approach in an omni-channel environment, companies can create a cohesive brand experience, maximize the impact of their promotional efforts, and drive customer engagement and loyalty across all touchpoints.

3.3.2 Integrated product and price

Integrated pricing and product information involves harmonizing product descriptions, stock status, prices, and promptly reflecting any changes within them (such as discounts, availability) to customers and other participants of the omni-channel system in real time [37]. Ensuring integrated product information across all channels requires consistent dissemination of identical product information to all stakeholders within the omni-channel system, including customers. Product information may include product descriptions, technical data, as well as stock status. This integration should also detect errors, mismatches, or the absence of product data anywhere in the omni-channel system and initiate necessary corrective actions.

Price consistency means there is consistent price information across all channels. Integrated pricing synchronizes product prices, making changes within them (such as discounts) visible to customers and other members of the omni-channel system. Integrated pricing is key to managing pricing strategies across channels [43].

3.3.3 Integrated transaction information

Integrated transactions involve ensuring secure access for customers to complete transactions through all available channels [37]. Integrated transaction information management pertains to how omni-channel retailers handle extensive centralized data collected from diverse channels to offer additional services. These retailers enable customers to review their transactions across different channels [44]. Moreover, they can provide future purchase recommendations based on past transaction records. Transaction integration also entails secure access to customer transaction data across various channels.

3.3.4 Integrated information access

Integrated information access refers to the capability for customers to access information that is available across various channels and seamlessly transition between these channels [37]. Based on Gao et al. [32], within an omni-channel system featuring highly integrated information access, customers can peruse products in physical stores while simultaneously checking inventory status via the online store. Additionally, customers have the ability to access online store information through internet kiosks situated in the company’s brick-and-mortar stores. This integrated approach empowers customers to retrieve information from and about any available channel.

3.3.5 Integrated order fulfillment

Integrated order fulfillment refers to a system where customers have the capability to finalize the entire transaction process, encompassing ordering, payment, shipping, and returns, utilizing one or multi-channels [37]. Buying online and picking up in-store is an example of order fulfillment integration. Customers opt for this to avail free delivery and speedy shipping. Omni-channel retailers focus on designing websites where customers can easily find options for in-store pickup and select the store where they want their items delivered. Customers expect to be able to choose any store to obtain the desired items from the retailer.

3.3.6 Integrated customer service

Integrated customer service emphasizing the provision of standardized and consistent services across all channels, and providing after-sales service for one another [37]. Integrated customer service implies the same or compatible service standards delivered by all omni-channel members, whether the service is provided before purchase, during purchase, during product delivery, or during the product return service. Therefore, all service providers must be cognizant of and effectively communicate customer expectations and service standards well. Integrated services across diverse channels streamline and enhance the shopping experience for customers, underscoring the essentiality for retailers to offer such integration [45].

4. Discussion

In Indonesia, traditional retail is no longer the primary choice for consumers to shop. The presence of digital media and online stores has caused traditional retail businesses to lose their appeal [46]. This has led to a decline in foot traffic due to changing consumer shopping patterns and lifestyles. Customers are now shifting their shopping process across various channels, from research and selection to making purchasing decisions. According to Yongki Susilo, the Board Director of Aprindo (Indonesian Retail Entrepreneurs Association), since 2016, the growth of the retail industry has experienced a slowdown, including department store.

Omni-channel retailers are increasingly intensifying their business by implementing multi-channel integration as a competitive advantage over retailers relying solely on traditional channels. All channels must be well-integrated to maximize results. Integrating channels effectively is not easy for retailers. One of the department stores in Indonesia has implemented a form of multi-channel integration by adopting an omni-channel strategy. This department store has built capabilities to fulfill orders from its various outlets through fully operational omni-channel operations. Therefore, it is important to understand how multi-channel integration is applied in omni-channel retail from the consumer’s perspective and contributes to the development of retail. Based on the phenomenon described, the author conducted research to understand consumer perceptions of multi-channel integration.

In a study conducted by Yunita et al. [47] on consumer perceptions of department stores in Indonesia regarding multi-channel integration, a descriptive method was employed to provide as accurate a depiction as possible of individuals, situations, phenomena, or specific groups. The primary data used consisted of responses gathered through the distribution of questionnaires to 212 retail customers who had made purchases through two or more channels. The research focused on retail establishments implementing an omni-channel strategy in Department Store. The findings indicate that the average respondent rated multi-channel integration items (integrated promotion, integrated product and price, integrated transaction information, integrated access information, integrated order fulfillment, and integrated customer service) in the high category, exceeding 80%. This suggests that respondents have a positive perception of the multi-channel integration implemented by retailers.

Based on the results of this study, adopting an omni-channel strategy in retail, especially within department stores in Indonesia, leads to a uniform experience across all available channels. Customers perceive no difference when shopping in-store versus online; they encounter uniformity in products and pricing across all channels, consistent promotional offerings, the ability to purchase online and collect products in-store, seamless transactions, the option to search for products unavailable in-store online, the utilization of vouchers in-store for online purchases, and access to after-sales guarantees for purchased products. These aspects collectively make omni-channel a favorable strategy for adoption in department stores especially in Indonesia.

The conclusion that can be drawn, multi-channel integration is a fundamental aspect of operating within an omni-channel framework. An effective omni-channel retailer excels in coordinating and overseeing all available channels, ensuring that no single channel predominates and that each channel contributes to a unified experience for customers across all retail channels. This seamless integration allows customers to enjoy access to a diverse range of brands, products, and services, as well as flexibility in their purchasing, payment, and delivery options. Freed from constraints related to time, location, or destination, customers can fully benefit from the offerings available through various channels.

The author’s further research delves into examining the influence of multi-channel integration on customer loyalty with satisfaction as a mediating variable [48]. Based on research conducted by Bendoly et al. [41] and Wallace et al. [49], multi-channel integration enhances the value of service output provided to customers, stating that customer loyalty stems from enhanced and focused satisfaction Buyers will experience satisfaction when they have a good shopping experience across every channel of the company. Customers provided with a seamless experience across various channels tend to become loyal [50].

This research still focuses on department stores, with a total of 200 respondents who have made purchases through at least two channels within the scope of the study. The findings indicate that multi-channel integration through satisfaction significantly influences customer loyalty. This suggests that customer loyalty can be enhanced through improved multi-channel integration, thereby fostering higher satisfaction levels. Companies, particularly those in the omni-channel retail sector implementing this strategy, can maximize the implementation of multi-channel integration. Effective multi-channel integration is believed to be a hallmark of successful omni-channel retailing. Based on the research findings, it is known that the direct impact of multi-channel integration on customer loyalty is smaller than its indirect impact. This means that customer loyalty will increase as satisfaction grows from enhanced multi-channel integration.

The benefits of omni-channel retailing include providing customers with an integrated shopping experience seamlessly from initial needs recognition to final product acceptance [1]. Customers should be able to combine the use of different channels in any way they deem suitable for their purchases. When customers experience better integration between online and mobile channels, they may expect retailers to have more capabilities and skills to deliver quality service output, thus leading to increased customer satisfaction [51].

Retailers should be aware that adding additional channels can have negative impacts on existing channels if the service levels of the new channel do not meet the expectations of existing channels [52]. If retailers fail to ensure accuracy, reliability, and personalized service in their marketing channels, customers may doubt their ability and skills to provide quality service output, which would decrease customer satisfaction [51].

Omni-channel customers expect retailers to provide them with the information they seek about products through highly convenient methods anytime, anywhere [50] and further offer quality products and/or services to them [53]. Disruptions across channels can diminish the positive impact of omni-channel shopping on sales and customer satisfaction [27]. According to [54], customers seek to use channels according to their convenience, thus expecting to find a higher level of coordination between omni-channel retailers with consistent interfaces to provide the same information across all channels; with such seamless experiences, customers are more likely to rate the retailer’s omni-channel system positively and consider it valuable.

Previous studies have found that the effectiveness of channel integration leads to increased customer satisfaction [9, 49, 55]. The basic demands and expectations are to ensure satisfaction and retain it [56]. It may be true that customer expectations have increased along with their demands for integrated experiences post-digitization [57, 58], but perhaps, customers are not as demanding of this integrated experience across all industries [56]. If retailers fail to ensure accuracy, reliability, and personalized service in their marketing channels to customers, customers may doubt the retailer’s ability and skills to provide quality service output to them, which would decrease customer satisfaction [51]. When customers experience better integration between online and mobile channels, they may expect retailers to have more capabilities and skills to deliver quality service output, thus leading to increased customer satisfaction [51].

When managing multi-channels, it is crucial to allow customers to choose when, where, and how they will interact with the retailer, as this is associated with positive outcomes such as higher customer satisfaction [59, 60]. This has a positive impact on companies through increased purchases, loyalty, and customer retention [21, 30, 61].

5. Conclusion

Omni-channel represents the evolution of retail driven by technological advancements. Customers can utilize all available channels, both in-store and online, to make purchases. What sets this type of retail apart from its predecessors is its multi-channel integration. Consistency in the customer experience is achieved when multi-channel integration is implemented effectively. It is crucial for modern retailers to invest in achieving consistency across all channels of the company. Based on research findings, customers expect effective multi-channel integration, and there is an impact on customer loyalty through satisfaction. This can serve as a strategy for other companies employing similar business concepts. Improved customer loyalty will affect the company’s performance; thus, identifying factors that influence this becomes fundamental in determining the success of its implementation.

This study solely relies on the research conducted by the author and references related to the research variables from various academic sources. It focuses only on one type of retail, namely, department stores, with a limited number of respondents. However, this research can provide insights for retailers in Indonesia and other industries that implement omni-channel strategy.

Further research could engage in customer clustering to map the varying levels of customer knowledge regarding the multi-channel integration undertaken, which may not be entirely uniform. Consequently, companies need to provide notifications in the form of information about the various channels owned by the company that will or have implemented an omni-channel strategy. Customers should receive consistent information across channels whenever they engage in activities such as searching, transacting, and post-sales services.