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Are Multi-Channel Retailers Positioned To Win?

As consumers continue to retrench on discretionary spending – most retailers find themselves in fierce competition for stagnant spending across all channels. Traditional brick and mortar shops with a weak web presence are losing business to shoppers who’d rather surf the net for what they need. Web-only retailers are, for the first time, seeing the natural growth of ecommerce slow – and thus, they can no longer rely on automatic growth from new shoppers and a higher percentage of mix moving online. Enterprising multi-channel retailers are well positioned to win the fight for existing shoppers and existing spend – by bolstering their website content, offering unparalleled accessibility and providing new levels of customer service.

House of Fraser is a great multi-channel example that I’d like to call out. HOF is a premium UK department store group with 62 locations across the UK and Ireland. Their brick and mortar business has been around for 150-years (!) – and they did not stop at simply bringing their business online, they are continually seeking ways to connect their channels. Some of their successful initiatives include:

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- Historically, they’ve only offered their catalogs in store due to their cumbersome nature. In order to make them much more broadly available, they have brought them to life as eCatalogs on the web.
- Better yet, most items purchased online can be returned at one of House of Fraser’s many department stores.
- House of Fraser gift cards can now be purchased and exercised on the website or at one of the 62 department store locations, which make them far easier for the consumer to redeem.

Thus, faced with a tough economic and competitive environment, multi-channel retailers such as HOF have some unique advantages they can leverage that would be difficult for their single-channel competition to match.

HOF is not alone is connecting channels for unique advantage. Most multi-channel retailers offer store locators and some, present in-store inventory availability. Many multi-channel retailers offer ship-to-store shopping which provides a great convenience to consumers - especially during the holidays when people flying to visit family and friends are faced with new baggage restrictions and checking fees. This also appeals to highly price sensitive shoppers who are willing to drive the ‘last mile’ to save shipping costs. Other multi-channel retailers offer in-store shoppers access to its website through Internet-enabled kiosks – giving shoppers real-time access to additional product information, customer reviews and other information to help facilitate the purchase in store—even the ability to order an item that may be out of stock in their local store. Early adopters are leveraging mobile devices for direct orders and as a direct marketing tool to drive in-store or to the web for online purchases. Examples include click- to-order and direct connection to your address book for gift deliveries, texting for in-store pick-ups and specials, pushing newest arrivals that are regionally linked to local store phone numbers for inventory availability, mobile search or UPC scanning capabilities tied to GPS navigation, and web search to find closest available items in store or best prices on the web.

If you are a multi-channel retailer and are thinking about pushing the bounds on connecting your channels, the April 2009 online shopper survey by Opinion Research Corp may be of interest to you. The survey identified five standout pain points in online shopping:
1. Not being able to speak to anyone to answer questions (25 percent)
2. Learning that items are back-ordered or out of stock after they are in the cart (11 percent)
3. Receiving an item that doesn’t look anything like it did on the Internet (11 percent)
4. Web sites that malfunction as the payment is being processed (9 percent)
5. Not being able to find an item (8 percent)

In thinking about the above challenges of buying online, you may be able to leverage an integrated cross-channel strategy to remove some of these customer pain points. In the end, "real time retailing” will be a significant advantage as retailers recognize the immediate benefit of meeting customer expectations at the time of demand, and customers recognize the retailers who provide it. Those retailers already employing this approach – making the sum of all channels greater than each individual channel – will likely weather the current economic downturn better than retailers who are retrenching to ‘focus’ on a single channel as their survival plan. The trend is showing consumers becoming savvier and demanding more information, greater accessibility to products and services and convenience like never before.

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