Apparel retailing has become a level playing field, where no one enjoys guaranteed long time benefits. Added to physical stores, retailers should have something up their sleeves always, and need to ponder about multiple ways of marketing. What are the possible and profitable options?
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Shoppers of today are more demanding, and are willing to pay more for their apparels,provided the retailer understands, and satisfies them accurately. Customers in the developing countries are behaving like patrons of the developed countries. They are willing to spend more time and money, shopping for apparels of their choice and exploring new product nuances. They are also willing to explore new ways for their shopping options.
Customers of the developing countries offer biggest growth opportunities for companies that are willing to understand and respond to their rapid growing expectations.Retailers, to sustain their slice of the pie, will have to opt for more than one way to sell their products to them. Multi channel marketing is a boon for such retailers.
Multichannel retailing offers customers more than one way of selling, for instance; a website in addition to the normal retail store. It gives more opportunities to retailers to interact with the customers and promote their products. A recent market survey states that retailers who had an online presence apart from their stores had increased sales revenue with 52% of their sales made online. Similarly,retailers, who had only online sales without physical stores gained only 31% of internet sales. This clearly indicates that for more successful retailing, a retailer needs both physical and online presence.
The trend of the consumers from the developing countries of fewer and costlier shopping indicates their convergence towards developed world norms. Many customers are brand conscious; believing that higher prices correspond to superior quality,and are willing to pay more for expensive, and branded apparels. However,extremely pragmatic shoppers make their buying decisions based on more facts than just branding.
Multi Channel Options:
Key retail players such as L.L.Bean, sell high end apparels primarily through physical stores, catalogs and also over the internet. Retailers such as J.C.Penney and Williams-Sonoma use stores, online presence, and catalog to increase their sales. They sell high end apparels and use their channels to complement each other. While internet facilitates convenience, speedy update of prices and promotion, catalogs enable to attract new customers.
Much of the information retailers wish to know about their consumers is generally not available. Web sites help in gathering more customer informations which is generally not possible for a retail store. Online services allow the customers to answer questions of what customers are buying, where, and from whom. They give information about the consumers intention to purchase, and his preference of a particular brand over similar others.
A successful multichannel retailer publishes a catalog replicating an in-store assortment of merchandise, and positively expects shoppers to make the buying decision. Expansion in a retail segment requires an integrated strategy across all channels, with each one supporting and strengthening the retail brand equity.
Utilizing the cross channel influence:
There is a significant relation between the consumers who came to know about the product through one channel, and chose another channel to purchase it. Retailers should realize this trend, and transform their operating model into a seamless customer experience across all channels.
Industry Key Player Opinions:
To get more information direct from the horses mouth, Fibre2Fashion had an exclusive interview with Alan Morris, Managing Director & Co-Founder, Retail Assist Ltd.
- We keep hearing more about the need for multi-channel solutions to help retailers better manage their business. What is it that has given rise to this trend?
Recent research carried out by Deloitte found that multichannel customers buying in the clothing, home and electrical categories spend on average �116 per transaction compared to �64 for those who only buy in-store.
In clothing, multichannel customers spend �65 on average compared to �52 in-store. Shoppers from higher socio economic groups are more likely to be multichannel shoppers, with 33% of shoppers from groups A and B employing several channels compared to 22% of those from groups D and E.
Multichannel retailers can have a more loyal and repeat purchase customer base, as consumers are able to access the retailer via various channels. With this evidence of increased revenue, it is no wonder that retailers are putting effort into developing and integrating numerous channels.
Retailers are certainly moving towards multichannel solutions to help them manage their business. The use of technology and different streams are becoming increasingly popular and accepted by consumers as a way of purchasing goods, as they become more widely available and integrated.
The relatively low investment required to establish channels provided by the internet, such as websites and social media stores, is also proving popular with retailers. These channels also allow higher levels of interaction with the customer, increasing the retailers influence over their final buying decision.
- How feasible is it for a big-box retailer to offer merchandise online?
Many big-box retailers are able to offer merchandise online, and give the consumer the choice between goods being delivered to their home, or to their local store. Methods such as click and collect are becoming more prevalent in todays retail environment, which enable more than one of the retailers channels to be utilized by the consumer over the course of their purchase.
- Is it acceptable for a big-box retailer to offer the same merchandise at different prices in different markets?
The issue here is whether you cause upset among customers, if they are unable to access a particular channel. Using varying pricing strategies may also cannibalise sales in one area of the multichannel chain for example, if a retailer offers the same goods at a lower price on their website than they do in their shops, then it would not be surprising if their online sales increase to the detriment of their store sales.
It could be argued that the holy grail of multichannel retail is when prices are consistent across every channel; even for the likes of delivery. Being able to offer the consumer the same service levels wherever they purchase from you, and not penalizing them for selecting a particular channel will be valuable to them, and increase their brand loyalty. This way, you are not discouraging a customer from using a particular channel, or their preferred purchasing method, and you are not competing against yourself.
- In your opinion, what are the upcoming challenges for the process?
The primary challenge faced by multichannel retailers is maintaining the consistency of service, and delivery across different sales channels. Customer expectations of the brand will be the same across the varying mediums, so any differences will lead to dissatisfaction.
Another challenge facing multichannel retailers is the integration of their different channels. For example, when utilizing the click and collect method, the back end system will need to facilitate the goods to either be delivered from the central warehouse to the store; or, if the shop in question already has the items in stock, to automatically allocate these for the consumer who will be collecting them.
With delivery charges accounting for the highest rate of abandonment at the checkout, there may come a time where retailers absorb the cost of delivery into the pricing strategy to ensure that sales are made rather than abandoned.
Investment into technology is required to enable seamless integration between different IT systems. The website needs to be able to talk to the stores, the concessions, the franchises, and the warehouses. At present, the managers of the website, the catalogue, and the stores are independent of each other they dont want to be driving sales to the other if it impacts on their sales targets and bottom lines. Equally, they dont want to be refunding stock that has been purchased via a different channel. Whilst the channels talk to each other, they are also left fighting against each other for the same brand customer.
In many cases these channels will have grown independently of each other, because they will have been implemented at different times and grown at differing speeds. The ideal situation would be one where the different ways of transacting complement and grow the others for the benefit of the whole business and the customer. Whilst this may require a large amount of investment, of which smaller retailers may not have the resource. It is important for all retailers to begin to take this approach so as not to get left behind.
Retailers need to get to grips with the different purchasing habits of customers in order to best utilize their different routes to market, as some customers will just research online, and then use the store to purchase; and vice versa. The main aim is gaining a single view of the customer, whether this be from information collected in store, via the website or social media. The retailer needs to know their customer, and utilise this information across their different channels to allow for seamless integration.
In todays competitive world, there is end number of options for a retailer to expand his business. The challenge lies in understanding how customers use each channel, and enable consistence customer experience across them all. Retailers who do business without understanding the customers mindset is not playing with a full deck.
References:
1. Searchcrm.techtarget.com
2. Ecommerce-guide.com
3. Computerworld.com.au
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