Multichannel Shoppers Key to Retail Success
Shoppers who use multiple channels — store, catalog and online — tend to spend more and be more loyal, according to a Shop.org study. But it remains unclear whether retailers can take advantage of what consumers want from tri-channel retailers.
Traditional brands have been taking a larger piece of the online retail pie as dot-coms have disappeared and offline brands have developed their online efforts. The situation now is that retailers need to integrate their channels to capture the value customers who see all three channels as just one retail brand.
The “Multi-Channel Retail Report 2001”, which was conducted by J.C. Williams Group and BizRate.com and included more than 48,000 interviews with shoppers from all channels, found significant levels of cross-channel purchasing.
For example, Store Shoppers who also bought online from the same retailer spend an average of $600 more annually in the store than typical store shoppers of from the same retailer. Among shoppers at tri-channel retailers, those who have purchased from all three channels now represent 34 percent of online shoppers.
The study also identified the “Super” multichannel shopper, which could be a very important part of a retailer's success. Super Shoppers are more likely to be customers of all three channels and purchase four times more frequently online than the average online shopper. Super Shoppers purchase from a retailer's store 70 percent more frequently than the average store customer and 110 percent more frequently from the retailer's catalog. In both their store and catalog purchases, Super Shoppers tend to buy much more frequently.
What is clear from the study is that there is almost no end to the ways in which
consumers that have access to multiple channels mix and match them. For example:
- The group identified in the study as “Online Shoppers” were found to be the most active, with 78 percent purchasing from both the Web site and the brick-and-mortar store.
- Almost three-quarters (73 percent) of Store Shoppers prefer to research their purchases online.
- Store Shoppers in the 35 to 44 age group were 24 percent more likely to shop for or purchase items in the store they had previously seen on a retailer's Web site.
- More than two-thirds of online shoppers look for and purchase items online they previously saw in the same retailer's catalog.
- Store shoppers are the least likely to make a purchase from another channel.
Of biggest concern for retailers that have not been able to take advantage of the online channel, the report found the Internet is the most effective pre-purchase influencer among all the channels. The basic message of the report is clear, according to Jim Okamura, senior partner at J.C. Williams Group: “Retailers that do not support their online channel face big risks.”
Okamura said the report found tri-channel shoppers to be mid-market customers. They are ultra-savvy shoppers, time-pressed and smart about their shopping. The highest incidences of tri-channel shopping are in the electronics and clothing markets.
The study also included interviews with 44 retail executives in order to examine why, in the words of the report's authors, “multi-channel retail excellence remains elusive.” The basic problem is that retailers either lack integration among their channels, or they do a poor job of projecting their integration to consumers.
“Fifty-five percent of store shoppers weren't even aware the retailer had an online operation,” Okamura said. “That still leaves 45 percent who need to better understand what is happening.”
From the consumers' point of view, they want to be treated the same regardless of which channel retail channel they use. “Their expectations of national multichannel retailers really does include seamless channel choice,” said Chuck Davis, CEO of BizRate.com.
What's needed now is an evolution in how retailers examine their ROI. Novice multichannel retailers, the study found, look at ROI in a narrow sense. They use traditional metrics such as direct sales, which may not show the role the Internet plays on purchases made in the store or through a catalog. Advanced multichannel retailers look at more intangible metrics such as brand equity gains.
The report found that the move toward becoming an advanced multichannel retailer involves integrating data from all three channels. It also found that 30 percent of the retailers interviewed have no customer data integration.
“Advanced multichannel retailers look at ROI much more holistically,” Davis said.
Reprinted from CyberAtlas.
Michael Singer is a career coach, podcast host, and author to help you step into a career you're excited about. Currently, He is a coach and trainer helping entrepreneurs and executives achieve business and leadership success. He is also an award-winning business journalist focused on the intersection of technology, Big Data, Cloud, SaaS, SAP, and other trending technology.
