It must be one of the most quoted phrases in any board room: “multichannel retail – but what does it mean to be a multichannel retailer?”
Multichannel retail is typically used to describe the combination of traditional retail sales with other channels – e.g. selling on the internet and in-store. However, as emerging sales channels drive new growth and attract new customers, multichannel retail is no longer as simple as just selling in a different place. And being a multichannel retailer is about much, much more than just selling. It is fundamentally changing the relationship between customers and retailers.
Retailers have quickly realised that these new channels increase their reach and offer significant new opportunities to get closer to consumers and drive growth. These channels:
- Expose new and richer customer data: location, channel preference, even personal likes and dislikes.
- Offer trade outside normal operating hours and extend brand reach beyond physical stores, into living rooms, onto mobile handsets – into consumers’ daily lives.
- Make it possible to create and maintain incredibly intimate, involved, unique and – crucially – multichannel relationships with customers.
For any retailer wanting to maximise the impact of multichannel retail, it is key to unlock these opportunities. Not just trading online and offline, but merging offline and online to create more insight and get closer to customers to drive relevance, sales and profits.
For all these opportunities there are an equal number of challenges too:
- Creating a consistent customer experience – how many e-commerce stores were setup to be standalone? How many retailers have then had to retro-fit a common basket or integrate with their core e-commerce system? How many retailers still don’t have one login for all their services or a common customer view?
- Pace of change – while multichannel brings many opportunities to extend the online experience, they require adjustments to the e-commerce platform. For many retailers, e-commerce can mean large, expensive and unwieldy systems. Change then becomes a serious challenge, even an inhibitor. With high levels of investment required to make any changes, each one is subject to detailed requirements capture and justification in a business case, rapidly decreasing the speed of change and delaying the benefits.
- Understanding multichannel consumers – customer behaviour is evolving as buying habits change. Observing, analysing and understanding what this means is crucial to maximising return from multichannel.
The real difference
So, being a multichannel retailer is about much more than just selling in new places.
The opportunities that it presents to businesses are both exciting and challenging. Those businesses that are able to act quickly and adapt will benefit at the expense of their slower moving competitors.