When considering the further transition of their businesses from “bricks” to “clicks” in 2010, retailers were challenged to include an understanding of m-commerce and the increasingly significant role it plays in multichannel sales.
Modern customers embark on a complex and progressively non-linear journey, shopping across multiple sales channels but with an abiding expectation of receiving a consistent, end-to-end brand experience. Aside from the operational challenges this means for traditional retailers in terms of stock availability and delivery, they are also required to think about engaging with a different type of customer; one with an unprecedented degree of access to product information before, during and after venturing in-store.
The ROPO (reserve online, purchase offline) effect is everywhere, for example, it is estimated that today some 60% of EU sales are affected by web research prior to their purchases on the high street. The advent of mobile with full web browsers means that this trend is set to only increase. During 2010 the mobile web grew at an exponential rate. Five billion devices were sold worldwide with 250k Android devices activated every day; one every three seconds. It is anticipated that by 2015 mobile will be the primary means for customers to access the web.
The mobile web is a powerful sales channel in its own right and a compelling means of driving new customers to retailers’ online stores. Global technology company Usablenet, posited that a fully enabled m-commerce website gave an increase in traffic to some UK retailers’ websites in the region of 50 to 100% over the Christmas weekend[1].
Published research in Internet Retailing by Forsee Results based on 10,000 visitors to some of the UK’s biggest e-retail websites also confirmed a similar picture[2].They reported 8% of visitors to UK retailer websites on mobile purchased something. 47% used mobile to compare prices and research products. 34% used phones to look up product specifications and 15% to view product reviews[2].
However, mobile’s complex interplay with the offline world can also realise incremental sales and advanced demands and gains for multichannel retailers. The notion of the “connected customer” is a relatively recent but nevertheless transformational concept in the changing retail landscape. A recent article published by the Independent revealed that 55% of surveyed retailers believed shoppers were better connected to product information than the sales assistants trying to help them[3].
Tech-savvy shoppers replete with smartphones and comparison shopping mobile apps visit retail stores primed with a greater awareness of the products they are looking for and the prices they are prepared to pay. Consumers have ready access to retailers’ products and prices at any time, not to mention the freedom to compare items in-store with direct competition just around the corner.
67% of surveyed mobile shoppers in the Forsee Results research said that while in physical stores they used their phones to visit the store’s own website, and 26% used their phones to access a competitor’s website, an increase from only 17% of mobile shoppers who accessed a competitor’s site while in-store during 2009[2].
Developing a good mobile experience with mobile optimised sites or apps or both, can mean retailers attain a vital cross-channel impact in their cross-sales strategy. Again, surveyed results from Forsee Results revealed that shoppers who are highly satisfied with a mobile experience are 32% more likely to buy from that retailer online and 31% more likely to buy offline[2]. In itself this addresses a crucial tenet of the multichannel experience; namely how to engender customer loyalty.
Other benefits for multichannel retailers must surely be the constant access mobile provides to potential customers and the ability to offer them individually tailored promotions. Multichannel retailers already engaging with this concept include Marks and Spencer and House of Fraser, both of whom have ramped up their mobile strategies to include pilot tests of proximity marketing schemes with O2[4].
We believe that in 2011 mobile, ROPO and multichannel will be even more closely interwoven, bringing with it a raft of changes that will revise aspects of the physical shopping experience. In the US Best Buy have already begun including QR codes in their stores to help customers learn about the products they are selling.
Across the wider industry, strategies for how to deliver contactless payments via smart phones are already underway. Plans range from full software-only solutions to hardware which could make generating transactions as easy as tapping a handset against a card reader.
The very near future of many in-store purchases looks set to be dictated even further by online customer research, transparency and personal connections driven through mobile. Meanwhile the primary way of making payments could very well be one that is entirely wireless, seamless and with no bank details required.
[1] Usablenet January, 2011
[2]Internet Retailing January, 2011
[3] Independent January, 2011
[4] Marketing Week January, 2011
Friday, November 20, 2009
Online Shoppers Can’t Get No Satisfaction
More consumers are turning to the web to shop for and purchase products. As we head into the festive season online retail is expected to account for 20% of all Christmas sales this year [1]. Unfortunately many retail websites haven’t matched the increase in traffic with better site usability and speed. Recent research conducted by Forrester Consulting in the US found that a mere two seconds is the new threshold of an average online shopper’s patience with website loading times. While 40% of shoppers will wait no longer than three seconds before abandoning a retail or travel site [2].
More surprising perhaps than just how elusive online customer engagement has become is the fact that many pure play retailers, those with their bedrock firmly entrenched in the world of eCommerce, are now seen as lagging behind their multichannel counterparts in delivering good online performance. The eRetail Benchmark study conducted by eDigital Research identified traditional retailers as “consistently outperforming their pure play and catalogue rivals online, using multichannel technology and customer service expertise to their advantage” [3].
As reported by Internet Retailing, traditionalist retailer John Lewis was the study's top performing website followed by Marks & Spencer and Next with New Look moving into the top ten sites on account of its “best in class” shopping basket function [3]. The Retail Bulletin and specialist website testing company Sitemorse study of October’s top 50 Retail websites also confirmed similar findings. They noted the lack of pure plays at the upper end of their rankings and gave special recognition to traditional retailer, HMV for their newly overhauled website [4].
The message to all online retailers must surely be that regularly changing, testing and evolving their site is imperative. However, the scale of these changes need not be too drastic, on paper at least. Econsultancy and Red Eye found that relatively straightforward practices such as aligning keywords, calls to action and landing pages plus using compelling and effective calls to action are associated with high levels of customer satisfaction and conversion [5]. Good web analytics can also play its part with segmenting customers, removing bottlenecks and blockages to conversion and identifying key performance indicators being other beneficial actions for online retailers to take [5].
With Christmas just round the corner and for some eCommerce marketers regarding their current online stores with some slight concern, only minor modifications would seem prudent or potentially necessary. Meanwhile those looking to address specific pain points such as the effects of a poor onsite search facility for example, might read about products such as the newly announced Google Commerce Search with some interest. More details were posted by our colleagues in the US here
[1] NMA November 13, 2009
[2] Internet Retailing September 22, 2009
[3] Internet Retailing November 06, 2009
[4] The Retail Bulletin November 02, 2009
[5] Internet Retailing October 09, 2009
Tuesday, August 11, 2009
Music and Video Retail - You Can't Touch This!
Verdict's recent study How Britain Shops 2009: Music and Video reveals that 49.9% of all British adults aged 16+ shop for music and video, an increase of 6.7% over 2008 and a rise that bucks a gradual year on year downward trend since 2005 [1]. Moreover, the success and healthy profits reported by HMV since loosing significant high street competitors would show that periods of adversity can be when market leaders make serious headway and deliver real innovation to their customers.
Not so long ago your average music and video retail specialist was only a lively and comprehensively stocked, if not necessarily competitively priced, in-store experience. Today that picture is as passe as a pair of MC Hammer's voluminous parachute pants. HMV, who are two years into a three-year restructuring plan, have embarked on a bold round of diversification reflecting the wide range of platforms music flans use to hear and consume music. Ticket sales, expanding its fashion range, venue sponsorship, new loyalty schemes for "money can't buy items" including back stage passes and signed memorabilia, plus vigorously promoting their own online and download offerings, have all helped define their new strategy.
The role of DRM-free downloads should not be overlooked in spurring on the recent upward trend in music and video shopping. Verdict posit that by giving shoppers the freedom to play downloaded music on any device has expanded the potential customer base of download operators [1]. Again this has proven beneficial for the UK's largest music and video specialist, HMV despite harsh price deflation from online pureplays and previously unforeseen competition from supermarket chains like Tescos.
Verdict's research also reveals some key developments in the ongoing fortunes of the premiere pureplay music and video retailers Amazon and Play. Following the ever greater penetration of high speed internet connections Amazon has increased its visitor and main user share. Meanwhile Play, has achieved the highest ratings among all music and video operators for price and service [1].
The new world of music and video retail undoubtedly presents businesses with fundamental challenges and questions. The apparent growth in the sales of digital media coupled with specialist retailers determination to diversify into new sales channels would seemingly show the path of its future. Nevertheless, one factor remains as enduring as ever; namely the importance of maintaining customer loyalty. Price, service and range are the key drivers for loyalty in music and video retail. So, while it may be tempting to reduce that back catalogue of old, hard to find albums or curtail your stock of niche indie hits in favour of selling a new fashion line, their importance to customers remains undiminished.
[1] "How Britain Shops 2009: Music and Video" Verdict July 2009
Not so long ago your average music and video retail specialist was only a lively and comprehensively stocked, if not necessarily competitively priced, in-store experience. Today that picture is as passe as a pair of MC Hammer's voluminous parachute pants. HMV, who are two years into a three-year restructuring plan, have embarked on a bold round of diversification reflecting the wide range of platforms music flans use to hear and consume music. Ticket sales, expanding its fashion range, venue sponsorship, new loyalty schemes for "money can't buy items" including back stage passes and signed memorabilia, plus vigorously promoting their own online and download offerings, have all helped define their new strategy.
The role of DRM-free downloads should not be overlooked in spurring on the recent upward trend in music and video shopping. Verdict posit that by giving shoppers the freedom to play downloaded music on any device has expanded the potential customer base of download operators [1]. Again this has proven beneficial for the UK's largest music and video specialist, HMV despite harsh price deflation from online pureplays and previously unforeseen competition from supermarket chains like Tescos.
Verdict's research also reveals some key developments in the ongoing fortunes of the premiere pureplay music and video retailers Amazon and Play. Following the ever greater penetration of high speed internet connections Amazon has increased its visitor and main user share. Meanwhile Play, has achieved the highest ratings among all music and video operators for price and service [1].
The new world of music and video retail undoubtedly presents businesses with fundamental challenges and questions. The apparent growth in the sales of digital media coupled with specialist retailers determination to diversify into new sales channels would seemingly show the path of its future. Nevertheless, one factor remains as enduring as ever; namely the importance of maintaining customer loyalty. Price, service and range are the key drivers for loyalty in music and video retail. So, while it may be tempting to reduce that back catalogue of old, hard to find albums or curtail your stock of niche indie hits in favour of selling a new fashion line, their importance to customers remains undiminished.
[1] "How Britain Shops 2009: Music and Video" Verdict July 2009
Friday, June 12, 2009
Is Multichannel the Future of Retail?
Multi-channel retail has created a proliferation of consumer choice that has fundamentally changed the way shoppers make purchases and interact with businesses. Consumers now conduct a high level of research before buying goods and services - whether it's looking for and reserving an item online before buying in store, or browsing a catalogue and purchasing online. This change in behaviour means it's integral for companies to develop a seamless focus on the customer that cuts across all channels.
Multi-channel shoppers are the most profitable customers for retailers today, spending almost twice as much as their single-channel counterparts. The ways in which customers utilise these channels to make purchases are rapidly expanding. At Argos, for example, multi-channel options such as "click and reserve" - where customers order online and pick-up in-store - has shown a growth of 50 per cent over the past year, and this trend is consistent with other retailers.
Indeed, multi-channel options can increase loyalty and customer satisfaction as well as sales, as Adri Kraa, head of Ikea Shop Online, is keen to point out, "We saw the biggest benefit of multi-channel as the loyalty effect, which we believed was more important than increasing sales."
Mothercare is another good example of a multi-channel retailer that uses numerous selling platforms and offers compelling cross-channel services. In High Street stores shoppers can access Mothercare's full selection of products via a store interface and buy any product for home delivery. Offering the right tools and opportunities to consumers who increasingly expect a seamless experience is essential for maximising returns.
Meeting the new shopping habits of modern customers presents retailers with significant logistical challenges. The potential returns for addressing these, however, are considerable. For example, Best Buy found its multi-channel customers shop twice as often, spend 95 per cent more than single channel shoppers and are 80 per cent more profitable.
There is a key opportunity for retailers to maximise sales by understanding the balance between their online and offline strategy. While online purchases currently represent a smaller percentage of overall sales, e-tailers continue to report double digit growth. In addition, Verdict predicts that by 2012, 44 per cent of all offline sales will be influenced by online.
Moving customers into coherent multiple sales channels is perhaps both the greatest opportunity and test for retailers today. In the current climate getting it right and delivering retail innovation means acute and all important advantages: extra value for consumers that boosts loyalty and satisfaction.
So the question any multi-channel retailer should ask is can your customers find all your products quickly and in a consistent manner regardless of channel? Going forwards it is imperative for multi-channel retailers to leverage their store and brand assets, to protect today but also invest in the future and to continue to try and understand, predict and respond to customer's ever changing needs.
Multi-channel shoppers are the most profitable customers for retailers today, spending almost twice as much as their single-channel counterparts. The ways in which customers utilise these channels to make purchases are rapidly expanding. At Argos, for example, multi-channel options such as "click and reserve" - where customers order online and pick-up in-store - has shown a growth of 50 per cent over the past year, and this trend is consistent with other retailers.
Indeed, multi-channel options can increase loyalty and customer satisfaction as well as sales, as Adri Kraa, head of Ikea Shop Online, is keen to point out, "We saw the biggest benefit of multi-channel as the loyalty effect, which we believed was more important than increasing sales."
Mothercare is another good example of a multi-channel retailer that uses numerous selling platforms and offers compelling cross-channel services. In High Street stores shoppers can access Mothercare's full selection of products via a store interface and buy any product for home delivery. Offering the right tools and opportunities to consumers who increasingly expect a seamless experience is essential for maximising returns.
Meeting the new shopping habits of modern customers presents retailers with significant logistical challenges. The potential returns for addressing these, however, are considerable. For example, Best Buy found its multi-channel customers shop twice as often, spend 95 per cent more than single channel shoppers and are 80 per cent more profitable.
There is a key opportunity for retailers to maximise sales by understanding the balance between their online and offline strategy. While online purchases currently represent a smaller percentage of overall sales, e-tailers continue to report double digit growth. In addition, Verdict predicts that by 2012, 44 per cent of all offline sales will be influenced by online.
Moving customers into coherent multiple sales channels is perhaps both the greatest opportunity and test for retailers today. In the current climate getting it right and delivering retail innovation means acute and all important advantages: extra value for consumers that boosts loyalty and satisfaction.
So the question any multi-channel retailer should ask is can your customers find all your products quickly and in a consistent manner regardless of channel? Going forwards it is imperative for multi-channel retailers to leverage their store and brand assets, to protect today but also invest in the future and to continue to try and understand, predict and respond to customer's ever changing needs.
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