Multi-channelling to move forward
Advisory and restructuring expert Dan Coen, of Zolfo Cooper, on retail reinventing itself
Zolfo Cooper LLP is an international provider of corporate advisory and restructuring services.
In April 2012, the company brought together leading senior retail figures for a seminar discussing the ways in which consumer shopping habits are evolving with the use of mobile and social media, as well as through more established channels.
Entitled ‘The future of multi-channel sales channels for retailers’, the seminar discussed the evolution of shopping and the importance of the industry reinventing itself to keep up with the changes.
Dan Coen, director of Zolfo Cooper, shares his thoughts on the issues raised.
1) Some retailers are still trying to run before they can walk when it comes to their multi-channel sales strategies
It’s all well and good for retailers to pursue a multi-channel strategy, but unless the product is right, customers are not going to buy it.
John Lewis is often held up as the gold standard for retailers - and that’s because the company understands this fundamental concept very well.
John Lewis doesn’t just offer its customers the different sales channels they want: it also reacts to its customers by consistently offering the products and services they demand.
2) Multi-channel retailing doesn’t just mean online retailing
Effective multi-channel retailing is about setting up whatever distribution channels are needed to satisfy customer demand, whether that means on the high street, online, or both.
For example, some customers will always prefer to shop on the high street, while others will primarily shop online - and some will do both.
However, that doesn’t mean that multi-channel retailing starts and ends with a high street presence and a separate e-commerce site.
Services like ‘click and collect’ represent an important hybrid of these two solutions and can therefore offer a valuable opportunity for retailers to pursue.
3) Social media is an essential part of an effective multi-channel sales strategy
It’s interesting to note that services like ‘click and collect’ have been born almost entirely out of customer demand. Hybrid services like these have helped to boost retailers’ fortunes by bringing even greater flexibility to today’s shoppers.
It is vital for retailers to understand where their customers’ wants and needs fit into the multi-channel equation and – more importantly – how the internet and social media can be used to promote each of these different channels effectively.
By now just about everyone has heard about the United Airlines passenger who took to the internet to complain when the airline (initially) refused to compensate him for his broken guitar.
Retailers can expect to see a lot more of these online ‘conversations’ in the future, with and among their customers.
In this new world of social media, the customer is still always right, but is now also very loud as well - and able to communicate on a global scale in seconds.
In order to make multi-channel retailing work, retailers will therefore need to use these social media outlets to connect with their customers effectively and to react to both complaints and praise.
Social media is very useful for traditional marketing, but is even more important as a vehicle for building personal, meaningful relationships with each and every customer.
Historically, people have bought the things retailers have wanted them to buy, but that model has changed dramatically. Consumers now have the power in this relationship; they are the ones making demands - and their complaints spread like wildfire.
The ability to react to this changing relationship is absolutely vital, and the sooner retailers realise that the better.
4) New skills will be needed to support multi-channel retailing
Given the enormous potential of high-growth areas like social media, online shopping and hybrid solutions like ‘click and collect’, retailers will need to consult with technology experts in all of these areas in order gain the greatest benefits from these opportunities.
The skills required to maximise sales in these channels are vastly different from traditional marketing, especially as new technologies in areas like mobile payments, barcode scanning and interactive television continue to evolve.
The rapid growth of online shopping provides a good example of how new technologies can capture the public imagination: While internet shopping constituted just 8.2 per cent of consumers’ total retail spend in 2010, that figure is expected to rise to 20.4 per cent by 2020.
Consumers are looking for speed, convenience and flexibility from companies they can trust, rather than focussing in on one particular channel.
Retailers would be well advised to remember this and use whatever tools are necessary to engage with this group effectively, via whatever channel they happen to choose.
:: Zolfo Cooper is headquartered in London, but has offices throughout the UK, as well as affiliations in North America, the Caribbean, Continental Europe, Asia and Australasia.
:: The company assists businesses and their stakeholders across a wide range of business situations, from complex-cross border cases through to mid-market engagements.
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