While the advantages of retailers offering their products through different channels is obvious to shoppers, recent research from IBM has illustrated how integrated multi-channel retailing can also measurably increase customer loyalty and economic returns. But how can retailers harness the barrage of information produced across all outlets and use it to drive long-term growth in sales, profits and customer satisfaction?

Department store House of Fraser employed eCommera to enable the company to produce a multi-channel offering for its customers, via its traditional stores in 65 locations across the UK, dotcom stores, internet and mobile devices.

Its first House of Fraser.com concept store opened in Aberdeen in October 2011. Instead of displays of shoes, clothes and accessories, shoppers are greeted by banks of iPads, computers and interactive screens – bolstered by staff who help them navigate to the goods they want. Again, they can choose either to collect or have goods delivered. By the end of 2011, a second concept store had already been opened in Liverpool.

Dan Seymour, head of projects, multi-channel for House of Fraser, says: “Within the 18 months to November 2011 we added Buy and Collect, Order in Store, PayPal, a new recommendations engine and Bazaarvoice. We also completed a game-changing site redesign, added mobile applications and massively extended our brands – we now support over 1,200.”

House of Fraser’s sales through the internet and mobile devices currently account for around 10 per cent of turnover, but it is predicted that this will soon grow to over 20 per cent. This is not about a shift in focus, such as fewer stores, but rather about bringing its existing and new channels to market more closely, to provide a joined-up experience for its customers. House of Fraser now believes it has proved that multi-channel customers spend more than those who shop through a single channel.
The old days of different silos managed by different people delivering different shopping experiences are dead, explained Felix Velarde, managing director of digital agency Underwired. He believes multi-channel retailing requires an interchange of data from one experience to the other with customers shopping in different channels at their – not the retailers – convenience. Certain shopping patterns will correlate to different demographic or motivational attributes and retailers can then build quite simple segments and cross reference with other outlets according what drives their behaviour.

“As a result it’s inevitable that purchase completion, frequency and transaction value will go up,” Velarde explains. “We’ve seen it with FMCG brands as well as retailer brands – revenue up by 11 per cent or average transaction value up by 3.1 per cent, it all adds up to huge increases in incremental sales from the customers you’re already talking to, before you even get to how you engage with new customers.”
Gopal Kutwaroo, senior marketing director, Europe, at NCR agrees, saying retailers who put the time and effort into assessing the data available to them are reaping huge rewards in terms of both understanding customers, and being able to target them in the most effective way, ultimately increasing sales. He adds: “It is important for retailers to monitor changing behaviour patterns which can be used to inform the broader multichannel strategy. Through regular analysis of the different channels, you not only ensure that channels are well integrated, but that the channel mix is the right one and efforts are not being wasted. “

Fujitsu provided the software to bring JD Williams’ Simply Be brand to the high street from online and catalogue-only store. Embracing a multi-channel ethos for the physical shops in Bury and Liverpool, the company utilised the software being used in the kiosks in store to also allow customers to access their online Simply Be accounts. David Lowrence, retail client engagement manager at Fujitsu UK & Ireland, notes: “This offered shoppers a seamless journey from online to store. It meant that they were able to access their online accounts, settle any outstanding payments and even order items to be delivered to their home addresses – all at their own convenience.

“Additionally, the ‘magic mirror’ technology allows users to access their social media accounts in the changing rooms. Customers are able to try on clothing, take pictures and upload them to their profiles and then get feedback on outfits. This really takes the notion of ‘try-before-you-buy’ to a whole new level as customers have the convenience of receiving feedback from friends and family in an instant.”

Multi-channel retailers using mobile technology must use customer insights to provide the mobile-specific view of the world their audiences expect, says Jasper Bell, strategy consultant at Amaze. Understanding mobile research patterns, the roles of mobile across the customer journey and the content that is driving reach, conversion and retention on mobile devices can help retailers create a meaningful mobile experience that converts and retains tablet and smartphone users by giving them what they need quicker.

Mr Bell added that a range of new and varied social media insights driven by the added reach multi-channel retailers are starting to command presents a unique opportunity to understand customer needs and issues. As Best Buy realised in the development of Twelpforce, if people are conversing and complaining via Twitter, you need to be there to provide service.

He said: “If your data tells you a user is looking for something specific, don’t make them fend for themselves, use business rules to serve the content they need there and then. Retailers must develop a data and insight-driven approach to multi-channel retailing, optimising their presence by channel and evaluating the inter-play between channels.”

While the attraction of any multi-channel proposition is the single view of both stock and consumer information that is fully integrated across the whole of the retail estate, retailers models tend to focus on all the consumer touch-points – such as e-commerce, iPads, mobile devices and apps – as well as on marketing and customer insight, rather than integrated IT systems.

Tony Bryant, head of business development at K3 Retail, says it is now predicting that by 2014 in the UK almost every mobile will be a smartphone and be connected to the internet. And in the US it is estimated that 40 per cent of people will be using some form of tablet such as an iPad.

He continues: “Such pieces of technology, with their touch-screens, create a direct link between the consumer’s physical finger and their digital fingerprint (that is created by such devices), which can be used by retailers to gain insight on their customers. This is a massive benefit to merchants because the data they are able to collect could not have been easily accrued in stores. How they utilise this information is a challenge, but the potential gains make it well worth the effort.”

In order for the multi-channel journey to create a seamless customer experience, the retailer needs complete visibility of each order throughout its supply chain, says Andrew Dalziel, vice president of marketing product management for EMEA at Kewill. “The answer for many is adopting a ‘direct despatch’ model, where customer orders are sent directly to the retailer’s supplier to despatch the order, effectively removing links in the supply chain. Direct despatch works in the same way for orders placed via any channel, providing a good degree of future‐proofing for retailers contemplating further investment in new channels, for example mobile and increasing collaboration between channels, with initiatives such as Click and Collect.”

Share Story: