Is Multichannel the Future of Retail?

Friday, June 12, 2009 | 12:43 PM

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Multi-channel retail has created a proliferation of consumer choice that has fundamentally changed the way shoppers make purchases and interact with businesses. Consumers now conduct a high level of research before buying goods and services - whether it's looking for and reserving an item online before buying in store, or browsing a catalogue and purchasing online. This change in behaviour means it's integral for companies to develop a seamless focus on the customer that cuts across all channels.

Multi-channel shoppers are the most profitable customers for retailers today, spending almost twice as much as their single-channel counterparts. The ways in which customers utilise these channels to make purchases are rapidly expanding. At Argos, for example, multi-channel options such as "click and reserve" - where customers order online and pick-up in-store - has shown a growth of 50 per cent over the past year, and this trend is consistent with other retailers.

Indeed, multi-channel options can increase loyalty and customer satisfaction as well as sales, as Adri Kraa, head of Ikea Shop Online, is keen to point out, "We saw the biggest benefit of multi-channel as the loyalty effect, which we believed was more important than increasing sales."

Mothercare is another good example of a multi-channel retailer that uses numerous selling platforms and offers compelling cross-channel services. In High Street stores shoppers can access Mothercare's full selection of products via a store interface and buy any product for home delivery. Offering the right tools and opportunities to consumers who increasingly expect a seamless experience is essential for maximising returns.

Meeting the new shopping habits of modern customers presents retailers with significant logistical challenges. The potential returns for addressing these, however, are considerable. For example, Best Buy found its multi-channel customers shop twice as often, spend 95 per cent more than single channel shoppers and are 80 per cent more profitable.

There is a key opportunity for retailers to maximise sales by understanding the balance between their online and offline strategy. While online purchases currently represent a smaller percentage of overall sales, e-tailers continue to report double digit growth. In addition, Verdict predicts that by 2012, 44 per cent of all offline sales will be influenced by online.

Moving customers into coherent multiple sales channels is perhaps both the greatest opportunity and test for retailers today. In the current climate getting it right and delivering retail innovation means acute and all important advantages: extra value for consumers that boosts loyalty and satisfaction.

So the question any multi-channel retailer should ask is can your customers find all your products quickly and in a consistent manner regardless of channel? Going forwards it is imperative for multi-channel retailers to leverage their store and brand assets, to protect today but also invest in the future and to continue to try and understand, predict and respond to customer's ever changing needs.

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