Cannibalisation! Anti-competition! High street under siege! We look past such ‘catastrophising’ and reveal some far more down-to-earth truths about the power of multi-channel retailing.
“Bricks-and-mortar stores are dead”
The Misconception: The high street is in its death throes and soon our favourite stores will be boarded-up...
The Facts: There's no doubt that the high street is facing serious challenges. According to Deloitte, 4 out of 10 shops will shut in the next five years. But the report says retailers need to evolve their thinking and strategies in the multi-channel environment:
John Lewis has an incredibly successful online presence that draws customers into their high street stores:
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Two-thirds of all their sales involve a customer interacting with both its stores and website and one-third of all online orders are now collected in-store.
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In the year to January 26, John Lewis recorded a 44% rise in online sales, and a 2.6% increase in like-for-like store sales.
“In a truly multi-channel world, the purpose of the store changes from ‘driving sales of the product in store’ to being a ‘brand and product showroom that drives revenues across all channels’”
Why do consumers still like bricks and mortar stores?
- See and touch products
- Buy the product immediately
- No extra costs such as postage and packaging
- Hassle-free returns
- Enjoyable experience
“Online retailing means my company's sales are being cannibalised!”
The Misconception: Offering your customers alternative channels through which to buy your products could see overall sales being cannibalised as consumers simply shift from one channel to another.
The Facts: Research by PwC shows that far from cannibalising sales, the opposite is true – it can actually encourage more spending by a consumer.
- Nearly one in five surveyed by PwC said that they spend over 25% more at their favoured retailer if it offers multi-channel sales options
- In the US, 56% are spending more and in Russia, 49%
- That figure swells to a huge 68% in Brazil.
Retailers should be using online and social channels to their advantage. Exclusive events and offers promoted through social channels are a great way to drive in-store footfall.
“Foreign buyers will shun your products”
The Misconception: Overseas consumers won’t be interested in buying from a foreign multi-channel operation, and prefer to shop from companies based in their own country.
The Facts: According to the PwC 2012 Global multi-channel consumer survey, companies are enjoying huge success in foreign territories. Take China and Brazil - out of the top ten brands, those surveyed said that their favourite brands were:
China
- Apple Store at number 2
- Adidas at number 5
- Nike at number 6
- Carrefour at number 7
Brazil
- Wal mart at number 4
- Carrefour at number 5
Germany rated three foreign companies in its top 10 including C&A, Esprit and H&M. There are exceptions though - France didn’t feature any foreign brands in its top ten. Quelle surprise!
According to an IMRG e-Retail survey, 72% of UK e-tailers ship goods outside of the UK.
Learn how to maximise your multi-channel software and strategies by downloading our free eGuide 'Multi-channel leaders, we salute you: what you can learn from John Lewis'.
Topics: Multi-channel
