Multi-Channel Retailing

Multi-channel Retailing in 2005, U.S. online consumers will spend in excess of $632 billion (US$) in offline channels as a direct result of online research. By 2006, total spending impacted by Web activity will total $582 billion, according to Jupiter. However, 76 % of retailers do not track customer behavior across multiple channels.

Multi-Channel Shoppers Multi-channel shoppers -- shoppers who use traditional stores, Web sites and print catalogs – –purchase 30 percent more than those who use only one retail channel. Consumers that either browsed or purchased in all three transaction channels spent $995 on holiday shopping, compared with consumers who browsed or purchased in two channels ($894) and consumers who only used one channel ($591). DoubleClick Out of the average $894 spent by multichannel consumers, $572 (64 percent) was spent in retail stores, $233 ($26 percent) was spent on the Internet, and $89 (10 percent) was spent through catalogs. DoubleClick Store Shoppers who also bought online from the same retailer spend an average of $600 more annually in the store than typical store shoppers of from the same retailer. Among shoppers at tri-channel retailers, those who have purchased from all three channels now represent 34 percent of online shoppers. Almost three-quarters (73 percent) of Store Shoppers prefer to research their purchases online.

Who are they??? They are ultra-savvy shoppers, time-pressed and smart about their shopping. The highest incidences of tri-channel shopping are in the electronics and clothing markets. Brand-loyal multi-channel shoppers -- which Jupiter calls "actives" -- tend fall in the 19-to-35 age demographic, Women tend to browse in one channel and purchases in another more often than men. –Forty-six percent of women and 43 percent of men browsed on the Internet and purchased at retail stores. –Whereas, 37 percent of women and 28 percent of men browsed through catalogs and purchased at retail stores.

The Supershopper Super Shoppers are more likely to be customers of all three channels and purchase four times more frequently online than the average online shopper. Super Shoppers purchase from a retailer's store 70 percent more frequently than the average store customer and 110 percent more frequently from the retailer's catalog.

Considerations for Multi-Channel Integration the customer's need to touch and try the retailer's breadth of inventory the customer's likely degree of consideration prior to purchase and the retailer's ability to deliver.

Other Multi-Channel Strategies Accepting returns in store for items purchased on the Web Integrating loyalty and registry programs in all channels Permitting store inventory visibility on the Web for products with high purchase urgency and products that require "touch and feel" Featuring Web inventory visibility in physical stores for product categories with broad inventory Centralizing customer information Including traditional store customers in online direct marketing efforts.

HOWEVER… But true brand-loyal, multi-channel consumers represents a far smaller group than many might think, according to Jupiter. While an estimated 66 million consumers use the Internet for purchasing and researching offline purchases, only about 16 million frequent the same brands on- and offline. "Retailers should avoid the temptation to equate customers' willingness to transact across multiple channels with store loyalty," she wrote. "To maximize online profitability, each retailer must vigilantly segment and analyze its customers, and thereby determine how much its own multi-channel buyers merit attention and resources beyond those allocated to other online shoppers."