By Debbie Hauss
Multi-Channel is a hot topic among retail research firms who note that best-in-class retailers are pumping up their efforts to reach today’s consumers in the most comprehensive manner. Aberdeen and Retail Systems Research have each published recent studies on Multi-Channel Retailing and both analyst firms agree that the successful retailers of tomorrow will be those that have implemented multi-faceted multi-channel strategies.
New-Age Of Retailing
Aberdeen surveyed more than 120 retailers between December 2008 and January 2009, revealing that 58% of retailers surveyed have had a multi-channel initiative in place for at least one year. Best-in-class companies are 1.5x as likely as the industry average and laggard companies to have implemented multi-channel strategies. There is a direct relationship between the implementation of multi-channel initiatives and success: 53% of top 20% of retailers launched multi-channel initiatives in the last two years, versus 28% of the bottom 30% of retailers.
Although the shift in economic challenges also has shifted retailer priorities, multi-channel remains an important aspect of successful retailing. 25% of retailers surveyed site “customer need for instant gratification through a channel of their choice” as the top pressure facing their business. With this knowledge, smart retailers will focus more efforts on digital and mobile media in the years to come.
The two most effective initiatives implemented by best-in-class marketers, in their effort to achieve cross-channel success are: 1) executing unified marketing plans between channels and 2) offering adequate inventory visibility across channels. Most best-in-class mutli-channel retailers also have a top-down approach to the strategy: 96% possess an executive mandate to develop new channels. Laggards are wise to take notice and move forward to adopt these strategies.
Integrated multi-channel operations are key to future retail success, according to the Aberdeen study Best-in-class retailers are implementing a number of new initiatives including the following:
- Create product offers and services for all channels of operations (52%). This action enables the multi-channel retailers to coordinate the brand look and feel for customers across all channels.
- Create new programs for new channels (33%). Implementing mobile programs will introduce retailers to previously untapped consumers.
- Improve operational excellence across all channels (54%)
- Create single brand identity across all channels (48%)
Digital and mobile efforts
Through the use of digital retailing consumers can now conduct their entire shopping experience online and through mobile devices, including researching products and receiving coupons and other discount offers. Retailers are responding with strategic initiatives including:
- Implement mobile marketing applications within the next 24 months (65%)
- Use online analytics in the next 12 months to improves sales and service (63%)
- Use online customer rating and feedback within the next 12 months to improve customer product selection and comparison shopping (45%)
Cross-Channel Retailing for the Anytime, Anywhere Consumer
Retail Systems Research (RSR) conducted an online survey from November 2008 through January 2009 and received responses from 88 retailers. According to RSR’s respondents, a satisfied multi-channel shopper is a retailer’s best customer. With challenging economic times ahead for the coming year, though, retailers must pick and choose their new initiatives wisely. While working to increase customer satisfaction, retailers must balance improving business efficiencies to save costs. RSR’s retail “winners” plan to continue investing in new multi-channel initiatives to prepare them for future successful following economic recovery.
First and foremost, a coordinated multi-channel company strategy must be in place for future multi-channel success. A majority of retailer winners (55%) are offering shared services for all channels, but laggards continue to be challenged with single-channel organizational structures (60%).
In addition to implementing a multi-channel strategy, some of retailers’ top business challenges include:
- Improve operational efficiencies (38% winners, 50% average performers, 38% laggards)
- Have difficulty managing inventory across channels (38% winners, 31% average performers, 38% laggards)
- Must fulfill customer expectation of seamless purchase and delivery across channels (38% winners, 38% average performers, 25% laggards)
Focus on inventory visibility
RSR’s report focuses on the “anytime, anywhere consumer,” specifically noting that successful multi-channel retailers will provide products and services whenever and wherever consumers’ demand dictates. To that end, retailers report significant success when they move toward achieving these goals:
- 85% report improved customer satisfaction when product information and pricing are consistent across channels
- 40% report a 2-5% increase in eCommerce profitability
- 29% report a 5-10% increase in overall return on inventory investment
- 25% report a 2-5% decrease in warehouse space requirements
Coordinating information between and among channels is consistently seen as a key to multi-channel success. Retail winners are moving toward electronic distribution of product and customer data, while laggards continue to enter data in a single-channel format.
Other technology improvements retailers are focusing on for multi-channel advancement are:
- Real-time inventory and customer updates (93% very or somewhat important)
- Cross-channel content management (89% very or somewhat important)
- Modern eCommerce platform (90% very or somewhat important)
- Central, customer-facing order management system across all channels (86% very or somewhat important)
Although retailers agree that they should be doing a better job of collecting consumer data, they often are unsure of what to do with that data. Real-time analytics and customer order management are priorities of fewer retailers.
Both RSR and Aberdeen concur that mobile technology is vital to future retail success. Even if budgeting for mobile commerce is not a viable possibility, retailers should be planning their mobile strategies now.