Leading UK retailers are missing out on millions in potential sales because their online and offline services are not well enough integrated, a new report has found.
A report from digital agency Head London today says supermarket Morrisons is losing a potential £314m a year in sales because it does not yet sell online, while online-only retailer Dixons is losing a potential £32.6m for its failure to offer well-joined up multichannel services. Conversely, says the report, The Customer Service Deficit: Opportunities for growth in the retail industry, Tesco has added around £255m in extra sales because it has a well-joined up multichannel presence.
Paul-Jervis Heath, head of design at Head London, said: “Too many retailers are behind the digital curve. They usually have a mobile website, and even an app, but too often these services are not joined up. By not giving customers the information they need on the platform of their choice they are less likely to complete purchases.”
Key to success, it says are giving customers the ability to choose a purchase path that suits them best, creating appropriate links between those touchpoints, using mobile websites and apps appropriately and treating customer support as an important part of the experience.
Head London’s research, supported by economic analysis from Oxford Economics, ranked 100 of the UK’s best-known brands according to how well their websites were integrated with mobile and in-store service to come up with a multichannel score. That score was based on assessing how well each company integrated its store, website and mobile app at five key stages of the shopper journey: browsing, deciding, buying, receiving and post-purchase. Retailers were given points out of 10 depending on how well they met consumer expectations at each stage of the journey. Penalties were applied to those that failed to offer a basic level of service.
Oxford Economics then matched multichannel scores to sales performance between 2007 and 2010, benchmarking relatively performance in terms of revenue growth against the rest of their sector using ONS data.
The best performing retailers were Tesco, John Lewis and Boots, while the worst-performing were led by Morrisons and Dixons. The full list of results can be found here.
Sam Moore, director of consulting services at Oxford Economics, said: “We found a clear link between growth and multi-channel performance. This confirms there is a commercial incentive for firms to invest in a digital multi-channel strategy.”
Head London’s Heath said: “To close this digital deficit retailers have got to adopt a smart multi-channel strategy. This means creating a seamless experience tailored to their customers no matter whether they are interacting with the retailer in-store, online, telephone or via their smart phones.
“Each channel should give customers access to relevant information about the store, let them see their purchase preferences and purchase history, provide good customer service, support and easy routes to complete purchases.
“Our research shows that companies who are simply following the pack or neglecting digital altogether are missing out on millions of pounds to their competitors. Meeting consumers’ needs, wherever they are, whatever they want to do is now the benchmark for success.”
Morrisons will be the last of the big online supermarkets to sell online when it launches Morrisons.com next year. It recently took on former Apple marketer Simon Thompson as managing director, Morrisons.com, for food.
Morrisons and Dixons both declined to comment on the report today.
Top tips for retailers
. Make sure browse and purchase history is clearly displayed for all customers on all channels
. Allow customers to reserve items in one channel and purchase them via another.
. Keep customers informed about their purchase via social media or SMS.
. Give customers quick and easy answers to sizing queries, additional product information, how-to guides or other common questions.
. Make sure customers can get in touch easily and get responses quickly, be that via telephone, email or social media.
Source: Head London