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The impact of online shopping seems to show no sign of slowing. The latest figures from IMRG/Capgemini reveal that online shopping continues to grow compared with high street sales. Online sales reached £4.5 billion in May, a rise of 1.6 per cent over April and equivalent to £73 per person. However, it’s not only online which is growing in the economic downturn. Businesses who offer consumers the opportunity to shop via more than one channel are also performing well in times of adversity. The issue of channel integration is likely to be even more vital in retail going forward.Customer research by Maginus revealed that companies are benefiting from consumers who shopped via more than one channel. 84 per cent of businesses found that they gained more revenue from those customers that use more than one channel. These sales could make all the difference as the economy slows down.
Service levels
As consumer demands continue to increase organisations need to make sure that they are catering for their every need. Consumers have so much choice available to them that retailers must make sure they offer consumers the choice of shopping via multiple channels so they can buy their goods in the preferred way.
If businesses are going to offer customers a multi-channel approach they must ensure they can deliver. Consumers expect the same service regardless of the route they shop through, but if they have a poor buying experience through one channel it will affect their perception of the whole brand. Retailers should focus on channel integration to match customer expectation. Consumers may research their purchases online, browse the catalogue to get an idea of the product and buy goods in store. Retailers such as Argos have launched a reserve and collect service which sets a benchmark for customer service, and shows the value in going one step further with channel integration.
However, it’s not just a consistent service level that retailers must consider. They must also think about the promotional activities that they present to the customer. This can help businesses build customer loyalty. Retailers should be looking to target customers through their preferred buying channel.
Building the brand
With high street sales showing no signs of recovery, the adoption of multiple brands can help grow the market share of a business. By having multiple brands a retailer can grow its market share at the expense of competitors without devaluing its core brand. For example, if an online retailer has a stock excess that it wants to sell at a discounted rate, it may not want to market these goods under its brand name. A retailer can use a different name to sell the stock under. However, to achieve this retailer needs the technology on its website to ‘reskin’ to quickly and easily create a new site. They also need a back office system that can also manage multiple brands as this ensures costs are kept to a minimum as all the existing infrastructure is being used.
There are other ways that companies can build multiple brands For example, a company could produce high end PC products and its goods could be expensive and designed for a particular demographic. However, the same company may want to introduce a different range of goods but will not want to price it so they damage the value around their high end brand and effect sales or their pricing strategy.
So companies are beginning to look at different branding for products aimed at a different type of market. This will help them offer a wider range of goods to a wider audience.
The benefits of this are not just about having more customers across a wider demographic, but it also presents the opportunity of spreading the cost of your infrastructure. This means you can have the same distribution centre for all your goods. You can also have the same call centre for customer queries and staff will know how to answer the phone from their caller display. All these add up to increasing your opportunities as a business but you needs integrated channels across the business for this to work.
Going forward
With technology becoming more advanced channel integration has an even more important role to play. In-store kiosks can give customers access to a web portal. This allows customers to order for home delivery. Shoppers can view the full range of goods sold – some of which might not be stocked or are out of stock at that branch. This allows the company to offer a much wider product range than can be stocked at the outlet.
However, real-time information across your business is crucial – from in-store to your web server and your call centre. If you fail to deliver your customer promises then they will only go elsewhere.
As consumer demands continue to increase, retailers need to make sure that they are catering for their every need. Consumers have so much choice available to them that retailers can ill-afford to make any errors. A website crash will mean that a customer will be unlikely to return for repeat purchases, as may a late delivery. Consumers expect more choice than ever and retailers need to make sure they deliver great service regardless of the channel their customers choose to shop via. By adopting a flexible approach and making the most of technology across all channels, retailers – from small to large – could flourish and grow their businesses.
Box-out: Tobar learns from integrated approach
Tobar is a multi-channel business selling inexpensive novelty presents in both B2B and B2C environments. The company trades via mail order, wholesale, over the web and through a number of expanding retail shops. Its shops and B2C catalogue and website trade under the name of Hawkin’s Bazaar.
By combining the management of its B2B and B2C relationships across all channels on one system, the company offers slick customer service. The business has access to relevant information such as stock availability, order status details and returns, regardless of the channel selected by the customer. Tobar has also noticed the efficiency within the call centre has increased significantly
The company has also improved performance in the warehouse. This has meant that the company can handle more orders with increased accuracy and reduce despatch time without having to significantly increase staff numbers in the warehouse. As a result of increased picking accuracy, the percentage of returns has fallen significantly. When products are returned they can be processed much quicker and the goods either returned to stock or to the supplier and the customers credited.
Also, marketing spend is a significant cost and Tobar needs to be able to measure the return on each campaign. Tobar uses technology to link orders to specific promotions, measure the cost of specific campaigns and analyse the return on investment across the business.
This is just one example of a company taking a multi-brand approach, but it is likely to become increasingly popular going forward as many businesses look to differentiate themselves from the competition.
Five top tips for better channel integration
1. Use a single database across all channels and brands to ensure consistency of data and help control costs.
2. Ensure your business delivers consistent branding and messaging across all channels. This will make sure customers understand your proposition and avoid confusion.
3. Use your website to carry a bigger product range and extend your customer base over a wider geographical coverage.
4. Introduce multiple brands to attack different market sectors, allowing you to sell your product range better.
5. Partner with a technology supplier that can help you grow your business through its flexible solutions. This will mean you don’t have to change your technology as you grow.
