Multi-Channel Retailing

Author: David Linklater

One of the challenges that faces retailers is to remain as competitive as possible in a fast-changing market.  Key to this is the ability to increase market share whilst keeping overheads as low as possible.

Retailers can achieve this through the use of “multi-channel retailing”, which is where the retailer offers the consumer multiple ways in which to buy a product.  This allows consumers to choose the means of shopping that is most convenient to their lifestyle.

A study by Deloitte has revealed that shoppers who use a combination of channels will spend on average over 80% more than consumers who only shop in store.  A shrewd retailer will realise the potential to be unlocked from investing in multi-channel retailing and many already have additional channels to complement traditional in-store purchases.

Whilst consumers increasingly shop around online for goods, most still like to be able to check out certain items in a store first and the challenge for the retailer is to ensure that when those consumers do make their purchase, they don’t make the purchase elsewhere.  Deloitte found that retailers without a store presence can benefit from attracting customers who have seen goods in store elsewhere.  This is of course a serious cause for concern amongst retailers with a physical presence, as their rivals will attract the customer on the basis of price alone, without having made the initial investment.

To combat this, the purpose of a retailer’s premises will move from being primarily one of retail to one of brand promotion, product showroom and collection point.  This will either attract customers into the store or cause them to bear in mind that particular retail brand, should they decide to make the purchase via another channel.

What is clear is that the battle lines between purely online retailers and those with a physical presence have been drawn and it will become increasingly hard for the latter to compete, when faced with their increased overheads.  It is essential that they diversify and change their physical presence into a strength rather than a weakness.  Clever use of floor space, marketing and multi-channelling will all assist in this process.

Ultimately, though, it is the consumer that will have the final say.