Bridging the Omnichannel Gap in Retail with Dynamics 365

Do you know as per Microsoft Study, 97% of consumers have backed out of a purchase because it was inconvenient emphasizing how critical seamless omnichannel experiences are today. Ever wondered why do some retail businesses thrive while others struggle? Retail is changing. We live in an era of digital disruption, one that is transforming our behaviors and how we interact with the world around us.

Omnichannel has been around for more than a decade now, so it might be surprising to realize that there are still gaps in a strategy that has become table stakes for most retailers. The gap that does exist presents a lack of clarity about what omnichannel retail is and the inability of organizations to deliver on the strategy. With retail in the midst of one the largest transformations we have seen in decades, many organizations are trying to understand where to start bridging the gap between traditional and modern retail experiences. Microsoft Dynamics 365 brings together a unique set of capabilities and services that allow retailers to streamline buying experiences for customers across channels while empowering organizations to gain a deeper understanding and ownership of their sales, operations, and customer data. 

Dynamics 365 Commerce (previously known as Dynamics 365 Retail), now called unifies innovative capabilities and tools that allow retailers to streamline buying experiences for customers across channels while empowering enterprises to gain an insightful view of their customer data, along with operations and sales.

By bringing together solutions such as Dynamics 365 Commerce and Dynamics 365 Marketing, businesses can more effectively target and deliver engaging, intuitive, and user-friendly digital commerce buying experiences. Microsoft Dynamics 365 for Retail is uniquely positioned to provide retailers with the specific capabilities, resources, flexibility and security they need to create success Today and into the future. Firstly, let’s have a look at the main challenges in retail sector.

Customer Journey Mapping: Understanding Pain Points

Are you truly seeing your retail business from your customer’s perspective? Mapping the customer journey is about understanding every step they take, from discovering your brand to post-purchase interactions and uncovering where friction occurs.

Common Pain Points of a Retail Business

Inconsistent Omnichannel Experience: Customers expect seamless transitions between online and offline platforms. Is your website syncing inventory with your stores?

Complex Checkout Processes: Are customers abandoning carts because of long or confusing checkouts?

Limited Personalisation: Without tailored recommendations, are you missing chances to create meaningful interactions?

Post-Purchase Disconnect: Do customers struggle to track orders or make returns?

With Dynamics 365 Commerce, you can identify and address these pain points through unified data and intelligent tools:

• Real-Time Insights: Track behaviours and preferences across channels for a connected view.
• Streamlined Processes: Simplify checkout and returns with centralised systems.
• Enhanced Personalisation: Use AI-driven recommendations to deliver products and services that match customer needs.

By proactively addressing challenges, you retain customers and transform them into advocates for your brand.

Personalisation Strategies

Did you know that 80% of customers are more likely to purchase when brands offer personalised experiences? Personalisation isn’t just a trend—it’s a necessity in today’s retail landscape.

Effective Personalisation Tactics

• Dynamic Product Recommendations: Are you effectively leveraging customer data to upsell or cross-sell?
• Custom Loyalty Programs: Do your rewards reflect individual preferences and shopping habits?
• Tailored Promotions: Are your campaigns aligned with customers’ locations, past purchases, or browsing history?

Dynamics 365 Commerce empowers retail businesses to offer personalised offerings. By delivering bespoke experiences, retailers can build trust, drive sales, and foster lasting loyalty:

• AI Insights: Use predictive analytics to anticipate customer needs.
• Unified Data: Build a single customer view from all touchpoints, enabling deeper personalisation.
• Seamless Integration: Personalise across platforms—from digital storefronts to in-store engagements.

Integration with Emerging Technologies

Are you ready to future-proof your retail operations? Staying competitive means embracing technologies like AI, IoT, and augmented reality.

Emerging Technologies in Retail

• AI for Predictive Analytics: Can you anticipate what customers want before they ask?
• IoT for Smart Shelving: Do you have visibility into inventory at the granular level?
• AR for Immersive Shopping: Are you giving customers virtual try-ons or 3D product views?

Dynamics 365 Commerce enables these innovations to foster a seamless retail experience:

• AI-Powered Decisions: Leverage Dynamics 365’s intelligent analytics for actionable insights.
• Connected Operations: IoT integration provides real-time updates on inventory and store conditions.
• Seamless AR Integration: Enrich product pages with interactive content to enhance online experiences.

By aligning with emerging tech, retailers improve efficiency and redefine customer engagement.

Sustainability Practices

Is your retail business aligned with the growing demand for sustainability? Beyond a trend, eco-conscious operations are a competitive edge.

Sustainability Challenges in Retail

• Inventory Waste: Are you overproducing or carrying excess stock?
• Energy Consumption: Are your stores and warehouses optimised for efficiency?
• Ethical Sourcing: Can customers trace the origins of your products?

Dynamics 365 Commerce supports sustainability in retail by enabling:

• Optimised Inventory: Use real-time insights to reduce overstocking and waste.
• Sustainable Supply Chains: Gain visibility into your sourcing and suppliers.
• Energy Monitoring: Leverage IoT to track and reduce energy usage across locations.

Disconnected Data and Disrupting Modern Buying Scenarios

While ensuring omnichannel experiences to the consumers, retailers face many roadblocks, primarily due to the lack of unified data in the existing systems. The disconnected customer data affects customer communications and restricts retailers from gaining meaningful business insights, including customer preferences and inventory.

The best solution for modern retailers is to deploy Microsoft Dynamics 365 for Retail that connects company- wide customer data and automatically updates relevant customer insights in real-time. Moreover, integrated Artificial Intelligence (or AI) capabilities define customer segments seamlessly and ensure smooth customer communications.

Dynamics 365 Commerce enables enterprises to improve and enhance customer engagements through various smart tools, including an e-commerce site builder that targets specific customer segments with diverse experiences, including geo- location and other attributes derived dynamically from their online browsing.

Legacy Solutions and Aligned Complexities

Organizations invest heavily in their existing legacy solutions to maximize benefits from such investments. Instead, businesses may end up dealing with undesired complexities in the current systems if they continue to avoid investing in a new unified solution. However, integrating add- on tools into the existing solutions might work well to keep the operations performing without compromising the currently implemented systems.

Microsoft Power Apps help businesses build customized solutions that connect existing customer data and integrate sales services and operations. Dynamics 365 Commerce coupled with Microsoft Power Apps allows enterprises to leverage the organization- wide customer data using the existing systems. Thus, the new unified solution empowers retailers to use the data lying isolated across the separate systems—without replacing those.

Improvising with Altering Customer Needs Can Help

Retailers’ inability to adapt to the fast-changing customer habits is another roadblock while ensuring omnichannel experiences to their patrons. Enterprises, therefore, must plan to streamline their back-end operations that would help them adapt to the modifying customer behaviors and preferences. In addition, implementing the right technology infrastructure, like Dynamics 365 for Retail, allows retailers to connect all the available customer data and ensure better customer experiences.

Modern consumers look out for reviews and social channels before making a purchase decision. Industry insights reveal that social commerce sales in the U.S. contributed about $36.6 billion in 2021. Integrating this new demand generating technology sources are critical for modern businesses to gain customer intelligence.

Dynamics 365 Commerce Services allow retailers to engage with widespread customers through a common data model along with advanced, emerging commerce platforms. Dynamics 365 Commerce Solution also empowers retailers to develop in- house capabilities for tracking and monitoring reviews posted across commerce engines while automating the reviews’ solicitation from customers through post- shipping emails and other such actions. Besides, Dynamics 365 Commerce uses deep data that connects platforms and helps retailers explore how targeted customers respond to social storytelling.

Rising Customer Expectations

Worldwide customers’ expectations have evolved, as they now desire more convenience while buying. Moreover, customers today understand and expect retailers to capture their buying patterns and trends. Retailers, therefore, are aggressively looking for tools to understand consumers better and ensure personalized user experiences.

Businesses may lose sales if customers feel inconvenient, whereas many companies are still trying to provide the options that customers expect. National Retail Federation suggests that nearly 97% of consumers have backed out due to their inconveniences during the purchase journey. The trend is common, primarily in smart services, like curbside pickups, next day delivery, and easy returns.

Microsoft Dynamics 365 helps retailers improve customer experience and personalize customer engagements across channels. Global enterprises are leveraging Dynamics 365 retail business solutions to include more product information for customers and staff at the point of purchase.

Microsoft Dynamics retail enables enterprises to improve their omnichannel capabilities and deliver personalized customer buying experiences. Retailers, therefore, look to Dynamics 365 for retail implementation to bridge the omnichannel gap while helping them exceed customer expectations and boost their business success.

Next Step

Team Dynamics Square helps businesses connect data effectively by leveraging Dynamics 365 solutions and enabling them to overcome the discussed four primary roadblocks and bridge the omnichannel gap in retail.

Engage Today for a customized Dynamics 365 Commerce Trial.

Challenges involved in Retail Industry 

In a global marketplace characterized by constant change and fierce competition for share of wallet, retailers around the world are facing mounting pressure to find solutions to address their evolving needs. Let’s have a look at some of the main challenges involved in retail industry- 

Disconnected data disrupts the modern buying journey

The lack of unified data in a retailer’s current systems still proves to be a significant roadblock to providing omnichannel experiences to consumers. 

Complexity of legacy solutions

Many businesses have invested heavily in their current legacy solutions. Rightly so, most wish to maximize the benefit of these investments. Unfortunately, businesses can end up dealing with the complexity of their existing systems far longer than necessary as they attempt to avoid investing in a new unified solution. 

Inability to adapt to changing customer habits

Another roadblock to providing omnichannel experiences is an inability to adapt to changing customer needs. This can result from a business that isn’t using the right technology to streamline operations and connect all of its data. The need to streamline backend operations is just as critical to customer experience when the goal is being able to adapt to rapidly changing customer behaviors and habits.

Increased demands and customer expectations

Consumers today understand that retailers can capture data of how, what, when, and where they make purchases. Not only do they understand this point, but they also expect it. This is one reason retailers face increased demands to understand consumers better and personalize experiences accordingly.

Dynamics 365 Commerce

Microsoft Dynamics 365 supports the composable commerce approach, where instead of finding uses for features that come with your purchase, you only purchase what you are going to use. To make it easier to choose the products that you need, let’s look at some features of Dynamics 365 Commerce for retail businesses along with typical use cases.

The Commerce module, previously named Microsoft Dynamics 365 Retail, is usually the first to come to the attention of retailers. It was designed specifically to create omnichannel retail platforms and assist commerce businesses in multiple ways.

Combining, among others, such features as point of sale, content creation, inventory management, and order management, the solution has virtually everything a company may need to run a retail operation: integration of online and offline commerce into a single platform, AI-powered website content editors, personalization tools for boosting customer engagement, analytical algorithms for generating insights that can help to drive conversions. The uses of the Commerce app in retail are numerous. Let’s look at some of them.

Creation of omnichannel retail experiences

Dynamics 365 Commerce joins all retail channels into a cohesive platform, giving customers the ultimate freedom to choose the most convenient buying options – online or offline. A single platform ensures data consistency across all touchpoints so that customers get the same prices, promotions, and personalized offers wherever they choose to interact with the business.

The Commerce module allows for creating seamless customer journeys with intelligent chatbot assistance, which drives sales and reduces the abandonment rate.

AI-driven recommendations and product discovery

Customer data stored in Microsoft Dynamics 365 CRM is a source of insights into customer behavior, preferences, and expectations. Based on this information, AI algorithms generate personalized product recommendations, opening cross-selling and upselling opportunities.

To streamline purchase journeys, the Commerce module offers intelligent contextual product search, helping customers find what they need in both online and offline retail locations.

Intelligent targeting and personalization

The Commerce application analyzes available customer data to identify grouping trends and target customers more precisely, both in marketing campaigns and personalized recommendations. With all customer interactions in a unified view, Dynamics 365 Commerce provides rich data that it transforms into insights with AI features.

Understanding the Omnichannel Gap

The omnichannel gap occurs when customer interactions across online and offline channels are disconnected. Common symptoms include:

• Inconsistent pricing or promotions across channels
• Limited visibility into inventory availability
• Fragmented customer data and purchase history
• Disjointed customer service experiences

These gaps not only frustrate customers but also lead to lost sales, higher operational costs, and reduced brand loyalty.

Business Transformation in Retail Industry with Retail ERPs 

The challenges facing the retail sector are steep. To tackle them, companies often turn to Enterprise Resource Planning (ERP) systems to optimize the purchase process across multiple channels, manage their supply chain and inventory, gain insights into consumer behavior and more. Dynamics 365 for Retail helps companies to achieve the level of digital transformation necessary to thrive in an increasingly competitive retail environment, without compromising on the issues that matter to C-suite executives: security, reliability, flexibility and cost-effectiveness. 

FAQ

What is the best ERP for retail business?

Dynamics 365 Finance & Supply Chain Management, combined with Dynamics 365 Commerce, is generally the best fit for retail businesses. Business Central can work with third-party add-ons like LS Retail but is not a retail-ready solution out-of-the-box.

How much does ERP cost for retail business?

Costs vary by size, customization, and deployment. Dynamics Square provides clear, tailored pricing.

What is omnichannel retail in Dynamics 365?

Omnichannel retail in Dynamics 365 connects online, in-store, mobile, and customer service touchpoints into one unified platform with shared data and processes.

How does Dynamics 365 Commerce improve customer experience?

It enables real-time inventory visibility, personalized offers, consistent pricing, faster checkout, and seamless returns across channels.

Is Dynamics 365 suitable for mid-sized retailers?

Absolutely. It is scalable and designed to support growing retailers as well as large enterprises.

How does Dynamics 365 support personalization?

Using AI, unified customer data, and predictive insights, retailers can deliver tailored recommendations, promotions, and loyalty experiences.