Once again the Christmas shopping and January sales season has thrown into sharp relief the importance of having a strong online offering in today’s connected world. Yet as we enter a new decade it is important to note that a standalone online store is no longer enough – retailers must look at seamlessly integrating all their channels if they want to lead in 2010 and beyond.
Ten years ago a mere brand presence online marked out retailers as innovative, slowly building into Ecommerce 1.0 – being able to sell online no matter what the user journey.
Now, though, retailers should be looking for these sites to become not just profitable but the highest revenue-generating element of the business –the flagship store, if you will.
To do so, it is essential to build a multi-channel strategy, one that segues online with store sales, marketing and promotion to catalogues and perhaps even mobile.
A strategy that puts the customer at the centre of the universe. It shouldn’t matter where they actually transact from, all touchpoints should be integrated and the data centralised.
Today we’re working on second and third generation websites that are built with social, personalisation and multi-channel in mind: a successful multi-channel business will be one who’s combined whole is greater than the sum of its incumbent parts.
It’s certainly something that customers are asking for. The 2009 Consumer eTail Report from GSI Commerce revealed that expectations and willingness to spend online during the Christmas peak were higher than ever as was demand for multi-channel shopping.
It cited that 29% of UK people polled would be positively influenced by the option to buy online/pick-up in store, rising from just 5% a year earlier. Fulfilment and returns management were explicitly tied to the potential for making a repeat purchase, whilst the offer of free delivery was the single most important factor for 94% of consumers in deciding between retailers offering goods at the same price, a substantial increase from the 68% in 2008.
The challenge now is to convince retailers that online and offline must work together.
Online sales have thus far grown more or less in isolation from the incumbent business streams, such as catalogue and in store sales. The individual units of a company are still fighting for the same customers – with different reporting lines, marketing budgets and customer service centres. And that’s cannibalising sales.
Multi-channel nirvana for some of the larger retailers is insuring catalogue, website and store are all singing off the same hymn sheet. Unsurprisingly the big retailers such as John Lewis and Marks & Spencer are leading the charge. They are starting to think in a multi-channel way offering options such as being able to reserve online and collect in store, or take back home-delivered items to the retail customer services desks. This is only the tip of what a true, integrated multi-channel strategy will entail.
Brands can start measuring multi-channel success by having a single view of the customer, instead of seeing him or her as a web customer, or a store customer, or catalogue customer. Eventually that means integrating all the information you have on that customer – building one holistic account across all channels leading to greater customisation and personalisation.
The first brand that has that single view of the customer is going to own the market. Nobody’s doing it yet. There are no instructions, no real statistics, on how to approach it and that’s what makes it exciting – we really are on the cusp of exciting times in retail.
We know that consumers are increasingly using the three touchpoints of catalogue, in store and online. We also know that each of those consumers will be using them in different ways: whilst one person might only ever research online and buy in store, others may only purchase over the phone and still others might interact with the brand primarily through its website.
Retailers must remember that interaction will be very different in each occasion but that the brand ethos must be aligned albeit through potentially very different mechanics. Integrating those three experiences takes time and effort and it is important to create triggers to action: the signposting you use in store, the messaging on a catalogue driving customers to a rich media website. At the moment there are minimal incentives for a customer who has been in the store to go on to the website.
What makes the customer want you, and not your competitor? How can you make it easier to buy from you? How can you make your physical retail stores more inviting, innovative – and interactive?
Retail stores are not going to go away, but part of the winning multi-channel formula will be making use of all your channels here – making that valuable high street footage work for you, making sure that all the touchpoints are working together.
According to the British Retail Consortium UK retail sales were over £287bn in 2008, with more than a third of consumer spending going through the shops. In fact the retail sector generates 8% of the UK’s Gross Domestic Product and despite a harsh high street environment in 2009 there are signs that the sector is rallying.
We will start to see more innovation in the bricks and mortar outposts of retailers. Already the likes of John Lewis are doing it by tapping into their online inventory when stocks aren’t available in store while Apple makes the experience more interactive allowing consumers to be buying without needing to visit a tillpoint.
Those conversations are happening now and, although it might take 12 to 24 months for much of this to be put in place, there are exciting times ahead.
An integrated, multi-channel strategy will pay dividends for brands putting the customer at the heart of their experience. If the business is not siloed then nor too will the customer experience.
In a perfect world, the supermarket will know who I am as I enter the store, remembering my online shops, the catalogue purchases as well as the shop visits. The loyalty programme will bridge all that brand’s channels, offering me a more personalised service and actively pushing me to all its brand touchpoints. In a perfect world the website will know who I am, where I live and the nearest store to me. It will know my locality – the interface reflecting the stock and promotions at my nearest store and even the weather or occasions.
The department stores, such as M&S or Asos.com are winning hands down as they’ve got the audience, they’ve got the momentum, but the appetite is there for everyone.
The key learning is to stop thinking about your e-commerce store as a standalone shop but a critical, integral part of the business. The ticket is to start shifting the way that people think about the business, the customer and from an accounting perspective. Start that way and expand it. Eventually you will have a single view of the customer and then look to personalise your offering and then look at doing some really good stuff.
Everyone can do it with well-trained teams and relatively simple technology.
Author: Fadi Shuman, Co-Founder, Pod1