THE FINAL WORD Multichannel:
Much has been written about multichannel retailing in the last few years with news surrounding its adoption by retailers large and small reaching a cacophony in recent months. Often, noise can be equated to hype, hype can be equated to a fad, and businesses choose whether to listen or ignore. When it comes to multichannel, however, I firmly believe that businesses ignore it at their peril.
Ignore multichannel at your peril
By 2025, 75 per cent of the workforce and, therefore, the holders of the majority of purchasing power, will be Millennials. Millennials, or Gen Y, are the first generation to grow up in a world powered by technology, and it’s technology and social trends that are dramatically changing the way people shop and interact commercially. Long before 2025 Millennials will demand a multi-channel offering. But even now, in 2014, customers are already expecting some kind of multichannel option. Tere is no longer such a thing as a single channel purchasing journey any more. AIDA (attention, interest, desire and action) has become fragmented across a multitude of media and channels. Customers might have a preferred channel but they no longer interact exclusively through that channel. In order to compete in the future businesses must be able to start a dialogue - or transaction - on one media or channel and continue it across others.
How to become a multichannel retailer
I am CEO of Euroffice Group, which grew up as a pure play office supplies business (think Staples), and a few years ago we considered what our multichannel strategy should be. How could we enter new channels, efficiently and effectively, even if we didn’t have any organic expertise? Should we pioneer mobile? An app? Responsive? What form factor will win out? In the end we decided to
focus on what we are good at – marketing and technology – and we built a white label system and support platform to enable traditional offline businesses. It’s called Office Power and it enables offline businesses to leverage online platforms to deliver a multichannel offering. Tis model allowed us to take advantage of the skills and experience of an offline sales channel through enabling it, rather than doing it. Tis approach to multichannel is unusual, but what it demonstrates is that there are many different ways to integrate multichannel strategy into your business model. For example, you might want to
consider a) extending the channels you use in your current media or b) entering new channels. Choosing the former could simply mean an online retailer broadening its marketing mix into other online channels such as email marketing, partnering with affiliates, creating a social media presence or looking at PPC/PLA. Choosing the latter is a more significant investment and should be fully researched. It is definitely not for the faint hearted. Other factors to be considered when
forming multichannel strategies: • Always trial new channels before making a significant investment.
• Model the competitive landscape and choose your battlegrounds carefully.
•
Consider the size of investment/ appetite for risk if you are looking for first move advantage in emerging channels.
• Be ‘brand self-aware’ when attempting to penetrate social or personal environments.
• Never forget the importance of big data.
Making the switch to multichannel
Once you’ve decided what your multichannel strategy is going to be there are also a number of key points to consider in the implementation. For example, it is critical that you create a single database recording all
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Why it can’t be ignored and how to build it into your business strategy
By Simon Drakeford, CEO of Euroffice Group
customer interactions across all touch points and that you match the channels to meet demand, which will vary by product category and customer segment. It’s also important to use econometric
modelling to understand the cost to transact across the different channels – this enables effective planning and prioritisation; map the propensity of your customer base to interact/transact across the different channels - this enables proper ROI on development; and consider possible passing trends – e.g. form factor on mobile. Two other points to note – it’s
acceptable for your pricing and proposition to be different on different channels, as long as your customers understand why these differences occur. It’s also acceptable to - and in some cases expected by–customers to have different channel experiences, but your brand message must be consistent across all channels.
The benefits to your businesses
I’ve already suggested that ignoring the shift to multichannel is dangerous but it’s not easy either. For the brave, early adopters and those that execute well there are significant business benefits, including: • •
Enhanced brand loyalty
Increased share of wallet from less intra channel leakage
•
Future proofing and matched to psycho-demographic trends
• Order/customer growth in price elastic channels
• Margin growth in inelastic channels
• Rich customer data for enhanced CRM
Te maturity and adoption of different
channels varies greatly by industry and any change or investment needs to be cognisant of this. However, even if some of the terminology is a little over-marketed and the urgency a little over-hyped there is no doubt that the move to a multichannel interaction model will come and stay, so doing nothing is no longer an option.
Direct Commerce |
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