Getting More from a Multi-channel Business
By Chris Barling, Chairman of ecommerce and EPOS systems supplier, SellerDeck (formerly Actinic).
Over the last few years, both the traditional retail sector and the catalogue sector have adopted the web in a big way. The result has been a blurring of barriers between sectors and the rise of the “multi-channel” retailer. Alongside this, consumer behaviour has drastically changed. Recent research has shown that, for large retailers at least, more products are bought in-store following research on the web than are actually found and bought purely on line. Multi-channel retailing is becoming highly significant because consumers are behaving as multi-channel shoppers. Any business ignoring this trend does so at their peril.
The modern consumer uses a variety of approaches to their purchases. Shopper’s search, compare and reserve product online before buying in-store. They browse a printed catalogue, call in for advice and later order on the website. Or they use any combination of channels in any way they see fit.
The result is a plethora of new issues, and this article is designed to help you plan for this new world.
Firstly some good news for retailers. Multi-channel buyers actually spend more and are more profitable than single channel buyers. This bold statement has been supported by a number of pieces of research over a number of years. However, whether this is due to the better buyer demographics for all internet users is difficult to determine. The point remains that unless you mainly cater for buyers with lower demographics, your best customers will wish to interact through multiple channels.
The key to a multi-channel strategy is putting the customer at the centre, allowing them to behave as they wish, and supporting them at every stage. Staff training, systems and processes should all support this aim.
Consistency is Key
It’s important to make sure that everyone is motivated and rewarded for supporting customers buying through their chosen channel. Try to ensure that staff commission, customer loyalty schemes, discount coupons and gift vouchers are designed with multiple channels in mind. If the customer purchases through one channel, they may want to return goods through another. Are the incentive schemes and systems able to cope with this?
It’s also important to consider differential pricing across channels carefully. Rewarding use of the lowest cost channel, generally the web, can lead to confrontation with customers when they research online and try to shop in-store. Free offers on shipping or the use of discount codes may alter behaviour but must be treated with caution due to the confusion they can cause.
The Full Product Range
It’s very counterproductive to have different product ranges for different channels. Where space constraints are critical in store, you can always draw attention to a fuller range available online. There’s never any excuse for things being the other way round. If the product they want is not available, they will quickly find it elsewhere. And the next time they shop it’s likely to be with your competitor.
In fact, if your shop doesn’t carry a product or it is out of stock, make sure your web store or in store kiosk can come to the rescue, with options for home delivery (with free P&P), or later in-store pick up. The important thing is to retain the sale.
Mail order and the web have more in common than traditional retail, but each channel has its own challenges. Make sure that you have the appropriate marketing skills and don’t assume that competence in one channel means the same for another. For instance, email is immediate and cheap, but paper can hang around for longer and is more tangible. Decisions on the type of marketing you undertake is non-trivial, do some research and discuss this with your customers.
As an example, Robinsons, an equine equipment supplier, regularly emails customers with offers on stock clearance and alerts for new products, both of these driving traffic to the site. They only distribute their print catalogue twice a year. The catalogue is still relevant as many people keep it for reference.
Responding in Internet Time
Web shopping is impersonal which makes it even more important to respond appropriately where human interaction does occur. For instance it’s critical to answer emails quickly, and have a great phone service. But eternal vigilance is needed to keep standards up.
Integrating Back-office Systems
Whatever system you deploy, it should embrace EPOS (electronic point of sale), web sales and the ability to take telephone and mail orders. Payment systems should be fully integrated across channels. They must also allow the business to be fully compliant with the critical PCI DSS (Payment Card Industry Data Security Standard) payment standard without incurring any significant additional cost.
It’s always hard to integrate systems, and can also be horrendously expensive. The one way to avoid this is to base your operation around packages that are already integrated.
The areas to look at are sharing product and stock information across channels, then providing the ability to order, deliver and return through different channels. The latter point being most applicable to businesses with a good geographical spread of stores. Also up for consideration is making customer accounts, customer care and loyalty schemes operate across all channels, and integrating everything through to the accounting system. The final area to check is reporting – how integrated is it?
It’s a lot of areas to consider and each must be examined to see what investment is justified.
At the end of the day, multi-channel retailing is a new discipline, and we are all still learning. That provides the chance to not only better the competition, but also to relish the opportunity of pioneering in a new field. It does take investment, but above all else, clear thinking.
About the author
Chris Barling co-founded SellerDeck (formerly Actinic Software) in 1996 and now around 12,000 sites use its software and services to sell online. Chris has some 30 years experience in the IT industry and is a prolific contributor to business publications and websites.