US retailers need to up their multichannel game: report

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Posted 10 January 2012 16:38pm by Patricio Robles with 0 comments

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There's a lot of talk about multichannel retail at the moment, and on the surface, most of the largest retailers in the U.S. seem to 'get it'.

But that might not be the case according to Gartner's newly released Multichannel Forecast for the US and the UK report. In fact, providing a seamless, consistent multichannel experience "business as usual" has retailers in the US "struggling" it says.

Gartner explains:

Channels have grown as largely separate entities, and business metrics in retail remain overwhelmingly product and channel-focused. Retailers need to change internal organisational alignments to execute a consistent cross-channel shopping experience.

Part of the problem is that retailers are focusing too much on ROI, and letting that guide investment decisions, instead of looking at what consumers actually want and how all channels are working together.

The company gives two examples of this:

• Despite the fact that it expects retailer revenue from mobile to be less than 2% of total revenues by 2015, Gartner says that: "Retailers should not underestimate the impact this channel will have in pushing sales to other channels".
• Store revenue, which Gartner expects to drop, doesn't mean that retailers should invest less in stores. In fact, the research firm suggests just the opposite: "The store will require more investment targeted at cross-channel shopper fulfillment as its importance as the hub of the retailer's multichannel offer increases".

In effect, this highlights the notion that just as online marketers shouldn't look at just the last click, multichannel retailers need to take a holistic view that goes beyond where sales are taking place.

Channels influence other channels, and creating a high-quality, satisfying consumer experience may require significant investment in channels even if their sales aren't a significant percentage of the revenue mix, or they're decreasing.

Some retailers, of course, understand this. But others are having a hard time executing. Some, for instance, aren't just siloed when it comes to business metrics - they still don't even accept online returns instore.

There's good news for UK retailers however. Gartner says that they are further along that their cousins across the pond.

Not only are UK retailers pulling in more revenue online (9.3% average compared to 5.3% average in the US) - they often have better fulfillment infrastructures and have managed to generate higher per capita expenditures.