Selling Through Multiple Channels

Multi-channel retailing is one of the current areas of excitement in retail, and there is strong statistical evidence for the view that shoppers who use multiple channels actually spend at a higher level than average.

By multi-channel retailing we mean selling both through high street stores, online stores, telephone, market places like eBay and other routes such as unattended kiosks. In our company, we identified this as a potential high growth area some years ago, however its value is only just becoming apparent. The following merely scratch the surface of the points to be considered when implementing a multi-channel strategy. So here are some tips for making a success of your multi-channel business.

There are many cultural challenges to introducing multi-channel to a business. Management may take the view that a particular channel is not main stream for the business. It is however interesting to note that the previous views that the Internet didn’t apply to a particular sectors e.g. insurance and fashion have long since been proved widely off the mark.

However, major challenges remain where senior management are unfamiliar with particular channels, business is in a state of flux so doesn’t want to make a major commitment in new areas, specialist skills are required which the company doesn’t possess, unknown levels of investment are required, and technology and buyers behavior is changing rapidly. A rational case must always be built by examining evidence of customer benefits, growth in particular channels and also what the competitors are doing.

281 - Learn From The Big Guys.

More than 80% of the top retailers in the UK already sell online, but for well established but small retailers the figure is still well under 50%. It is interesting to note that most national retailers have seen their online store become their “biggest store” in an 18-30 month timeframe from startup.

The keys that they found for multi-channel success was to set up a multi-function team to implement the strategy; to get external input; to give a lot of focus and attention in the early days; to experiment and learn; to communicate well both internally and externally; to integrate the operations correctly to provide web based facilities for customer service people so that they can see everything the customer can see; and to allocate costs and benefits to local stores based on postcode so that they fully co-operate with returns and people who browse in store and state that they want to buy online.

282 - Think About The Humans.

One reason Tesco have been successful online is that regional and store managers are rewarded for web sales in their area. Cultural issues are critical in getting a multi-channel strategy to work, especially in large organizations.

283 - Consolidate Your Sales Data.

One of the biggest challenges of multi-channel is data. Need to consolidate into single view and also need to extend KPIs to each channel. According to Gartner, order, inventory and product data must be disseminated across channels to produce a channel-agnostic customer experience.

284 - Be Transparent.

Be completely transparent about pricing. A company was recently caught with two web sites. One had the same as in-store prices and was used by store staff to demonstrate their prices were the same in-store as on the web. The other was the real online store and had lower prices.

285 - Understand Behaviour.

To understand customer experience at the web site, you need to look at web analytics but also observer people interacting with the company (web site, call centre etc) under lab conditions and ask them how they are feeling about things as they go through.

286 - Treat The Web As Another Store.

Do this from a stock, reporting, investment and business performance point of view. The web is just another way of making money, it should neither be favored or discriminated against. The current greater growth rate in web sales should, however, be taken into account as this is a business factor.

287 - Try To Make Channels Help Each Other.

In a Royal Mail survey 880 UK consumers 2007: nearly half looked through catalogue before buying online, 44% on non-home shoppers had browsed catalogue before buying in-store, 22% had browsed online before making store purchase, youngest most keen online shoppers and 75% had made web purchase in previous year, over 55’s had doubled from 11% to 21% as a proportion of online shoppers in previous year, shoppers who browsed a catalogue prior to making a web purchase spent 25% more than other online shoppers.

Offers to customers should be dependent on their characteristics and can be used very effectively to drive people across channels e.g. offer double points for the web purchase of a gift voucher of more than £20 to a price sensitive customer, and offer a complementary makeover at cosmetics counter when a good customer purchases a gift voucher more than £20. When this was tried, result was a measurable improvement in profit.

288 - Maximize Your Profit.

Do pricing and offers by channel to maximize profit. One company was quoted as having costs per order of 12-15p on the web, £4-5 catalogue/call centre, £10-15 in store. Digital acquisition cost is also much lower.

289 - Exploit Multiple Channels To Maximum Effect.

There can be unexpected benefits from multi-channel such as the ability to clear surplus or end of line stock through alternative channels and also to benefit from the long tail effect. This is where people want to buy something but it isn’t economical for a store to stock or display it. By providing an in store terminal or kiosk, such items can be viewed and ordered, thus profitably supplying the need.

290 - Support All Channels.

Organise to properly support any new channel, for instance answer emails in a timely way.

291 - Expand You Channles.

If you only sell through your own web site, then consider selling on eBay, Play or Amazon. These will not work for all businesses, but it should be an explicit decision not to sell, as there is substantial additional opportunity for some retailers.

292 - Remember The Customer.

The heart of multi-channel is allowing the customer to interact with you in the way they choose. The systems, processes and staff training to provide multi-channel should be assembled while always thinking about your customer. The customer must be the centre of your multi-channel solutions.

293 - Keep Prices Consistent.

Having headline prices the same across all channels will avoid debates with customers. You can still differentiate pricing through shipping charges or special discounts only available in one channel.

294 - Provide A Consistent Product Range.

As far as possible, have the same range available online and in store. That way, people who research in one channel and then try to buy in another won’t be disappointed.

295 - Capture Every Possible Order.

If it’s out of stock, make sure it can be ordered for home delivery, from another store, or online.

296 - Avoid Damaging Your Brand.

Common sense tells us that consumers see a single brand whether they are looking at a web store or the related retail outlets. So make sure the experience is equally good in every channel.

297 - Support All Channels.

Organise to properly support any new channel, for instance answer emails in a timely way.

298 - Integrate Your Back Office Appropriately.

Integration of systems can be expensive, unless your whole operation is based on a package that already provides integration. So do your research.