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Multi-channel retailing offers plenty of benefits to retailers, benefits that make investing in the strategy worthwhile.
The following is an excerpt from the free guide "Multi-channel Retailing: An Introduction," sponsored by Frank Mayer and Associates and available for download here.
Creating a successful multi-channel experience can seem intimidating to many retailers, who may wonder if the effort is worth it. They may not have a choice, however.
"Consumers are expecting this kind of integration already," said Ron Bowers, senior vice president of Frank Mayer and Associates, a Grafton, Wis.-based merchandising company. "They expect that if they order an item online, they can return it in the store, that kind of thing. It's up to retailers to make sure that expectation is met."
But multi-channel retailing offers plenty of benefits to retailers, benefits that make investing in the strategy worthwhile.
Improved customer perception
"Channels are disintegrating for customers," said Jeremy Gustafson, vice president at KSC Kreate, a digital commerce agency based in Hollywood, Fla. "People are watching television and using their tablet at the same time. They expect the same kind of integration with their shopping experience."
Brands who don't provide that kind of experience, he said, are likely to lose customers, especially as the digital generation gains even more buying power.
Stores who do create a seamless experience that integrates all different forms of technology, however, can gain significant customer loyalty. Those brands are perceived as forward-thinking and responsive to customer's needs — qualities that will keep customers coming back.
That improved perception offers another advantage, as well. In a world of big-box stores and online shopping, finding the best price is easier than ever for customers. A store that is perceived as responsive to customer needs and gives customers easy access to a variety of channels can differentiate itself in a crowded field. That allows the brand to compete on the experience offered, rather than just price. Customers might be willing to pay a little more for the convenience, and will come back repeatedly, and brands don't have to slice their profits just to keep up.
The primary driver for a retailer adopting any strategy is, of course, increasing profit, most frequently by increasing sales. Multi-channel retailing, by offering a variety of engagement points for the customer to make a purchase, increases the convenience and ease of sales, thus boosting profit.
A customer who thinks about buying a pair of pants, for example, may not want to drive to the mall, park, walk to the store, find the pants and try them on. For that customer, she can go online at home and order the pants from the store's website. Another customer, however, might be in the store trying on the pants and decide she'd like them in a different color. In that case, she can use an in-store kiosk to find the pants in the preferred color, order them and have them delivered to her home. Still another customer can use her smartphone to take a picture of the pants, send it to a friend and discuss whether to purchase them or not. Having a variety of engagement points gives retailers more tools to make a sale.
Better data collection
Knowing the customer is a key tenant for successful retailing, and multi-channel engagement points provide more opportunities to gather information about customers.
There are two benefits to the data collection offered by multi-channel retail: First, the possibility for gathering more information exists, and the information can be used more effectively.
"People usually are more comfortable entering information themselves, rather than giving it to a salesperson," said Steve Deckert, marketing manager for Sweet Tooth, a Toronto-based provider of loyalty programs to retailers. "So they are far more likely to enter their email address into a kiosk than give it to a cashier. At the same time, by having that information available across a variety of channels, the retailer has more opportunities to capture the information, and more of it."
If a retailer can track what a customer is purchasing, and where, more targeted marketing can be introduced. Someone who tends to browse online and then purchase in-store, for example, can be emailed an invitation to a private showing in a store, and the list of products to be shown can be sent before the event, increasing the likelihood of purchase.
Not only is it more likely that the customer will provide important information, but if all the different channels are communicating, then the information only needs to be entered once.
"If you're going to ask someone for information about themselves, it needs to be available whenever they come to you," said Verizon's Bagel. "Otherwise, it feels intrusive and annoying to have to repeat the same information over and over again."
Multi-channel retailing offers benefits for more than shoppers. Workers, too, can benefit from the use of new technology, by arming them with more information and increasing their efficiency.
A tablet, for example, frees employees from the point-of-sale system, instead allowing them to carry the register with them. Employees can go directly to the aid of customers, helping them to find out what is in stock, what is available at other stores and when new products might be launching. The tablet also can contain information about the loyalty program, so a frequent customer can be given VIP status. Then, when a purchase is ready to be made, the customer does not have to stand in line, but rather can simply continue talking to the salesperson and make her purchase via tablet.
While every type of channel has its own unique set of challenges, there are some strategies that are true across all engagement points.
Be consistent. Messaging across all channels should have the same look and feel; the customer should always know exactly what brand she is interacting with.
"Traditionally, retailers have approached each channel individually," said Gustafson. "What is needed, though, is to create a single marketing message, and then figure out how to deploy it across all channels. The messaging doesn't have to be identical, but it all needs to be clearly related."
Provide a value-add. Make sure each engagement point offers something to the customer. An in-store kiosk that simply accesses the company's website, for example, is not bringing anything unique to the customer; instead, she can check the website at home, on her own. The same is true of a tablet. If the salesperson with the tablet does not have access to more or better information than the customer can access via her own tablet or smartphone, the application will not bring much value to the transaction.
Security.There is a fine line between being helpful and being intrusive, and it's a line that is easily crossed. Customers are aware of security issues, and are wary of providing too much personal information.
"There has to be a clear connection between the information collected, how it's used and what value the customer receives from it," said Bagel. "Understand your brand strategy and what level of intimacy is appropriate. Depending on your clientele, privacy might not be as important — digital natives tend to be far less concerned with privacy than Baby Boomers, for example. But everyone wants to know that they will receive a benefit from giving you information."
Be committed.Multi-channel retailing requires an investment in time and money. There needs to be a clear strategy across all teams, and cooperation is critical to success.
"In order to have totally seamless solution, all stakeholders need to be involved, giving their insight and taking ownership and having support and understanding as to what is being done, why and how," said Bowers. "This is not a sometime commitment; this is a total marketing strategy for the retailer to invest in the future of the customer acquisition, retention process and loyalty programs."