Bring all sales channels under one umbrella

28 January 2010 | By Jo Roberts

Many shoppers are happy to do their supermarket shopping online in the morning and then browse high-street stores in their lunch hour. Using both online and offline shopping tactics does not appear to faze consumers, yet new research suggests that many retailers and brands are still failing to take advantage of this multichannel approach to shopping.

A study by GSI Commerce International argues that when it comes to making the most of multichannel purchasing opportunities, many retailers are allowing customers to slip through numerous gaps in their strategies.

The survey, which asked more than 2,000 men and women above the age of 18 about their buying habits, indicates that brands and retailers could be losing up to 60% of customers as they move between sales channels.

Just 40% of consumers would visit a brand’s website if they couldn’t find a product in-store. Instead, many customers return from a high street shopping trip and type the product they want to buy into a price comparison website (53%) or use a search engine to find the best deal on the brand they want to buy (41%).

And 69% of survey respondents claim they would log onto another brand’s website to compare prices on the same product if they had been unable to find it in a store.

Retailers are losing custom because they can’t link their in-store and online shopping together, says Hosein Moghaddas, managing director of GSI Commerce International.

Moghaddas suggests that getting sales people to promote multichannel options in stores is one way to retain custom even if the product is out of stock in store.

He adds/ “A very important element of multichannel retailing is to ensure there are in-store advocates of the brand. Retailers need [sales staff] to suggest an alternative means of getting an order to the customer.”

Store staff could also go further and assist in the online ordering process immediately and offer several delivery options, such as either to the store or the home.

This is a model used by Argos, which has a reserve-online-and-collect-in-store system. The latest figures show the use of this service has increased by 34% in the 18 weeks to 2 January.

Moghaddas says if brands provide a number of ordering and delivery options both in store and online “then this will inevitably increase their revenue”. And with 11 out of the top 15 UK retailers benefitting from their online sites in terms of sales, according to Hitwise, this is a logical next step for many.

Most of the survey respondents (81%) across the spread of age groups say they are “very likely” or “likely” to make a purchase in store if shop staff could order it online on your behalf, which indicates that assisted online shopping is in demand.

Another benefit of offering a transactional website as well as a bricks-and-mortar store is that high street retailers can offer customers an extended range that might not be available in store. For example, Peacocks clothing store offers swimwear throughout the year on its website but doesn’t give floorspace to such seasonal outfits all year round.

The key to getting the right mix on the shopfloor and a brand’s website is “staying tuned in to core customers”, argues Moghaddas. Keeping in touch with and analysing the purchasing behaviours of regular customers should help brands devise a multichannel strategy that minimises “customer churn”, he says.

But one of the biggest mistakes that brands make - which leads to them losing customers as they move between channels - is apparently retailers’ return policies. The majority (76%) of respondents say that expensive and time-consuming online returns or purchases put them off using the store’s website to make repeat purchases.

Moghaddas suggest that making the returns process multichannel can prevent customers from feeling frustrated and lead to further transactions. “Customers don’t distinguish between River Island the shop and River Island online. If you buy online and get it delivered to your home and then have the option of returning to a bricks-and-mortar outlet, then customers are more likely to exchange than opt for a cash refund.”

Different online ordering hurdles irritate different age groups. The younger generation (18- to 24-year-olds) gets annoyed with products not being delivered on time (75%), while this irritates 65% of people aged 55-plus. Those customers aged over 55 get much more irritated by returns policies, with 79% saying this puts them off ordering again, compared with 68% of 18- to 24-year-olds.

Moghaddas says that retailers should look at in-store tactics to promote their online operations, such as promoting a website through till receipts, window displays and branded bags. While these might appear to be unoriginal or basic strategies, many shops are still failing to get this right.

Looking at email marketing tactics can also help to close the gaps between channels. “You can track your customers and perhaps encourage a transaction - even with someone who has an abandoned shopping basket - by emailing the customer a discount voucher,” suggests Moghaddas.

Many retailers are only beginning to realise the value of multichannel retailing following years of operating online and high street stores as almost separate businesses. Some companies such as HMV (see Frontline, page 25) have now embraced multichannel retailing as a central part of their business strategy.

Despite the challenges that bricks-and-mortar brands may have in becoming truly multichannel, this research suggests those brands that invest in making it happen will no longer see their customers falling through the gaps.