The Big Picture

Shoppers simply want to make the right purchase at the right price rather than worry about different platforms, so retailers need to enable painless engagement across multiple channels, reports Barnaby Page

While retailers fret about the challenges – and covet the benefits – of multichannel, omnichannel and cross-channel marketing, the reality remains that consumers don’t shop in ‘channels’. They consider themselves to be shopping in Tesco, or Argos, or your store, and there lies perhaps the biggest challenge of all: to align channels so closely that their differences disappear.

Consumers’ attitudes toward channels do seem conflicted. A recent report from shopper behaviour research specialist Shoppercentric, Shopping in a Multichannel World, found that of 1,000 shoppers surveyed, more than half had used a laptop or netbook “at some point during their purchase journeys in the past month”, more than 40 per cent a desktop computer, and nearly 15 per cent a smartphone. Their main motivations for going the electronic route were ease of shopping, ease of research and saving time.

“The flexibility [these channels] provide gives shoppers almost universal choice and access,” said Danielle Pinnington, managing director of Shoppercentric. “But despite this, our research says 45 per cent of shoppers will ‘always love going to the shops, no matter what new technologies are available’. The key point is that shoppers are becoming very adept at picking and choosing the channel that suits them under particular circumstances.

“Yet retailers and brands have tended to compartmentalise – thinking of shoppers who shop versus shoppers who go online. They’ve even structured themselves so that the shops are managed by one team and the online by another – very few have successfully merged the two.

“Our data shows that a huge amount of overlap between channels exists – shoppers don’t assign individual roles to individual channels. Despite each channel having different core strengths and weaknesses, going online isn’t just about researching a product or buying cheaply, and likewise visiting the stores isn’t just about browsing.”

Points in favour of stores included customer service, with around 80 per cent of respondents saying they expected a positive service experience at a physical store – nearly twice the number who expected it online. The chance to talk to a representative of the retailer, the opportunity to experience items before buying and security were also cited as plus points for real-world stores by around 70 per cent of respondents, while returns policies and the availability of expert advice were further perceived advantages.

The biggest downside of in-store shopping, interestingly, was neither prices nor time – both identified as disadvantages by half of respondents – but coping with the crowds, which turned off nearly 80 per cent: human contact is both an attraction and a downside, it seems. Other studies confirm these mixed feelings. Hitachi Consulting research, for example, has found that 65 per cent of Britons would prefer to shop in stores against just 20 per cent online, with the remainder opting for a combination of channels.

ALL TOGETHER NOW

But it is a dangerous error to see online and offline as different worlds of shopping. Another survey – this time conducted by YouGov for shopping app Udozi – suggested that while high street shopping was still broadly preferred to online, with delivery costs and the overall experience among the major deterrents to etail activity, a large minority of consumers are using mobile devices, including smartphones and tablets, to browse before buying in-store. About one third of smartphone users said they would shop on their mobiles more often if they could reserve items for local collection, a further indication of the way that consumers desire to mix and match channels for their convenience.

“What’s key,” notes Udozi’s founder Alan Gabbay, “is that retailers learn how to marry all these channels together, especially as mobile is clearly influencing consumer shopping behaviour as people are searching for items they want on the go. We believe that mobile has the potential to connect the dots between the online and offline worlds – and ultimately drive consumers back to the high street.”

Fortunately for retailers, this apparent indecision on the part of customers faced with an ever more bewildering variety of devices and channels does not simply mean that their spend, once devoted to the high street, is now splintered among multiple routes to purchase.

Indeed, there is evidence from the likes of John Lewis that different channels can complement one another not just in easing the processes of research and decisionmaking by which consumers reach the stage of conducting a transaction – they can actually benefit in bottom-line terms, too. The department store believes that its best customers may be those who frequent both real and virtual outlets, suggesting that crosschannel, by providing more opportunities to engage with the retailer, can increase the overall level of shopping activity.

To achieve this, however, it is essential to offer customers a seamless experience across multiple platforms. Not only branding but stock range, pricing and promotions need to be as consistent as possible in order to help the consumer achieve what appears to be their unconscious desire: the ability to move from one channel to another with the minimum of disruption, in the course of the shopping process or even mid-transaction. The proliferation of devices and the steadily increasing availability of high-performance internet connections in public places has empowered shoppers, but finding the route to the right purchase among all the alternatives can also give them a headache, and the successful retailer will be the one that helps them navigate this route.

An integrated experience and integrated values also necessitates integrated information management – for example, loyalty card memberships and ecommerce user IDs must be linked – and thus integrated back office systems too. Social media will inevitably enter into the mix more and more (earn an in-store coupon for ‘Liking’ a product on Facebook?). Teams, too, will need to be more multi-disciplinary, with ecommerce professionals working alongside in-store marketing pros. The alternatives are fragmented marketing, and unclear understanding.

LOOK AND LEARN

One much-noted example of the shift to multichannel shopping (as opposed to multichannel retailing) is so-called ‘showrooming’, the use of personal mobile devices to obtain product and price information while in-store. It illustrates the importance to retailers of understanding how channels work together: a transaction might be completed online, but if the shopper has used the physical store as a showroom to identify which product they want to buy, it’s not accurate to attribute the sale purely to online. Equally, this practice can expand the range of competition: no longer is the in-store shopper limited to comparing one retailer’s offer with others in the same mall, the shopper has many more ecommerce alternatives at his or her fingertips.

Teradata subsidiary Aprimo has found that one in five consumers is now showrooming, with about seven per cent of all shoppers using the information gained in- store on their mobiles to buy elsewhere – and although it may still be a minority practice for now, nearly all of those polled said they planned to use their personal devices for shopping comparisons in the future. Perhaps surprisingly, the impact of this is likely to be felt not only on sales of big-ticket goods, where price comparisons are already part of standard shopping behaviour: showrooming for groceries is almost as common as for consumer electronics.

“This research confirms what many in the retail industry have suspected: showrooming is here to stay,” said Sucharita Mulpuru, vice president and principal analyst for Forrester Research , which worked on the survey. “Retailers must seriously consider ways to avoid losing sales this way by using strategies such as price matching, personalised in-store service and loyalty programmes.”

What stands out from a consideration of practices such as showrooming is that the changes taking place in shopping are not merely technological, but about the fundamentals of consumer behaviour. As a further example, there is also evidence to suggest that – perhaps counter-intuitively – ecommerce, despite appearing to be a rapid process, has actually slowed down the journey that a shopper takes from identifying a need to making a purchase, thanks to intervals between sessions of browsing, researching and buying.

This gives the cross-channel retailer a new challenge in maintaining shopper engagement, and suggests new roles that the store can play in addressing this. Technologies such as in-store digital signage and screen media can help here, not only for delivering marketing messages but also in bridging the gaps between the store and digital devices through interaction.

As Morrisons said in its 2012 results announcement: “Better technology and busy lifestyles are changing the way customers shop. Different customers in different locations want different products. They shop using different channels, going online, via kiosks and on their smartphones. They also visit different formats, doing their weekly shop in larger stores, topping up in convenience stores and seeking out specific products or expertise in speciality stores. To serve more customers, more of the time, we need to be multi-format and multichannel.”

Speaking from Experience

REWRITING THE MESSAGE

“Shoppers and consumers alike are asking, ‘Why?’ They are systematically taking control of who, where, when, what, why and how their chosen brands are allowed to communicate with them. We live in a multichannel and multimedia world and we now have the control to turn off, tune out or ignore any communication. The shopper-initiated experience is the message that needs to ignite the correct communication through the correct medium and channel. Consumers are deciding through which of these channels brands communicate a specific type of message, information or promotion. Whether you’re at home, at work, on the move or in a store environment accessing the internet using your mobile phone, you are empowered. The media is not the message anymore. The consumer experience is the message.”

Adrian Weidmann, founder, StoreStream Metrics

CHANNEL HOPPING

“The trick is to deliver a seamless, but tailored experience, to understand that channels have multiple roles for shoppers; they aren’t just where shoppers buy products, they are where they go for inspiration, information, advice, range, prices, offers and product experience in order to make a purchase.”

Danielle Pinnington, managing director, Shoppercentric

THE PLACE OF THE STORE

“In today’s digital age, constantly connected consumers have come to expect access to their favourite brands and retailers when on the move. But even though a large chunk of online Brits now own internet-enabled devices that they can make purchases from, mobile and online alone simply can’t compensate for the in-store shopping experience, as the majority of people still want to try before they buy and speak to experts in-store.”

Alan Gabbay, founder, Udozi

KEEPING THE CUSTOMER ’APPY

Don’t just jump on the app bandwagon, warns the Platt Retail Institute (PRI): “The issue is not whether retailers should create branded apps, but that they need to create apps that customers want to use. This is no small task, considering that IDG has found that the majority of mobile phone owners use fewer than seven apps on a regular basis , and that only 17 per cent regularly use more than 10 apps. ”

To ensure that investment in app development isn’t wasted, PRI identifies three priorities:

Integrate mobile into the retailer’ s customer strategy .

Incorporate features such as product research, how-to videos, way-finding and store information.

Solve a problem or provide utility.

More demanding functionality that a retailer should consider incorporating includes:

Unbiased price-checking and pricematching for loyal shoppers. While this will not directly help a retail er’ s bottom line, it can result in increased customer loyalty .