The Perspective 
Tuesday, 02 January 2007
The rise of online shopping to the mainstream puts pressure on retailers to master multichannel retailing. Supporting consumer interactions across channels like catalog, call center, Web and bricks-and-mortar may seem like a no-brainer at this point, but not all firms have responded well to this challenge.
 
Although Forrester has been writing about multichannel retailing for the past five years, we continue to receive many of the same questions from e-commerce executives, VPs and chief marketing officers: What are other retailers doing, and how are they doing it? To answer these questions we spoke with retailers that have taken multichannel strides over the past few years and to North American consumers to discover the state of multichannel retailing.
 
We found that consumers increasingly shop across channels. Using the Internet in the purchase process is no longer just for the technologically elite — in fact, 88 percent of all online consumers use the Internet to research products. Researching online and buying offline, however, is a more complex activity, but such cross-channel shopping rapidly is becoming a typical behavior. More than half of online consumers engage in it.
 
While there were some improvements in 2006 by leading retailers, firms continue to play catch-up to consumer demands, implementing one-off features like buy online/pickup in-store without the foundation of a holistic multichannel strategy. But we’ve gotten to the point where multichannel retailing cannot be ignored. For the past few years, retailers have had the luxury of choosing how multichannel they want to be, but they’re about to lose this privilege. While multichannel consistency and service have been nice-to-have capabilities, consumer adoption of technology — specifically the Internet — will turn this into a requirement over the next two years.
 
Of all the multichannel retailing competencies, retailers have made the most progress in supporting the multichannel buying process — helping consumers find products. This has been an easy place for retailers to start since it is the most visible area and it provides the most tangible benefits. But lost opportunities continue. Almost half of cross-channel consumers buy from a different retailer than the one they researched. These defections represent a significant opportunity for retailers to retain customers as they cross channels.
 
Retailers have begun to tackle this problem by building self-service Web applications that bridge the channels. To help prevent consumers from switching retailers as they switch channels, Circuit City, Lowe’s and IKEA have deployed configuration applications that let consumers do the research at home, but then access their work in-store via kiosks.
 
This approach allows consumers to research at their own pace, have easy access to their work once in the store, and get help from a sales associate to confirm and augment their selections. Circuit City offers a home theater configurator, and both Lowe’s and IKEA offer kitchen configurators. IKEA allows consumers to download the application and design their kitchen offline and then upload it back to the IKEA servers when they are ready to come into the store.
 
This control over the purchase process is something that the Internet has taught consumers, and as cross-channel shopping approaches mainstream, retailers should look to kiosks and self-service applications to bridge the channel gap and help meet consumer demands.
 
Tamara Mendelsohn is an analyst on Forrester’s Consumer Markets team. For more information please contact cxp@forrester.com.
Posted by: Tamara Mendelsohn AT 12:04 pm   |  Permalink   |  0 Comments  |  
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