Page 56 - DMGT550_RETAIL_MANAGEMENT

Unit 3: Types of Retailer

Notes

Task Discuss about different types of Retail Channels.

3.12 Benefits of Multi-channel Retailing

Creating a successful multi-channel experience can seem intimidating to many retailers, who
may wonder if the effort is worth it. They may not have a choice, however. “Consumers are
expecting this kind of integration already,” said Ron Bowers, senior vice president of Frank
Mayer and Associates, a Grafton, Wis.-based merchandising company. “They expect that if they
order an item online, they can return it in the store, that kind of thing. It’s up to retailers to make
sure that expectation is met.”
But multi-channel retailing offers plenty of benefits to retailers, benefits that make investing in
the strategy worthwhile.
Improved Customer Perception
“Channels are disintegrating for customers,” said Jeremy Gustafson, vice president at KSC
Kreate, a digital commerce agency based in Hollywood, Fla. “People are watching television
and using their tablet at the same time. They expect the same kind of integration with their
shopping experience.”
Brands who don’t provide that kind of experience, he said, are likely to lose customers, especially
as the digital generation gains even more buying power.
Stores who do create a seamless experience that integrates all different forms of technology,
however, can gain significant customer loyalty. Those brands are perceived as forward-thinking
and responsive to customer’s needs — qualities that will keep customers coming back.
That improved perception offers another advantage, as well. In a world of big-box stores and
online shopping, finding the best price is easier than ever for customers. A store that is perceived
as responsive to customer needs and gives customers easy access to a variety of channels can
differentiate itself in a crowded field. That allows the brand to compete on the experience
offered, rather than just price. Customers might be willing to pay a little more for the convenience,
and will come back repeatedly, and brands don’t have to slice their profits just to keep up.

Increased Sales
The primary driver for a retailer adopting any strategy is, of course, increasing profit, most
frequently by increasing sales. Multi-channel retailing, by offering a variety of engagement
points for the customer to make a purchase, increases the convenience and ease of sales, thus
boosting profit.
A customer who thinks about buying a pair of pants, for example, may not want to drive to the
mall, park, walk to the store, find the pants and try them on. For that customer, she can go online
at home and order the pants from the store’s website. Another customer, however, might be in
the store trying on the pants and decide she’d like them in a different color. In that case, she can
use an in-store kiosk to find the pants in the preferred color, order them and have them delivered
to her home. Still another customer can use her smartphone to take a picture of the pants, send
it to a friend and discuss whether to purchase them or not. Having a variety of engagement
points gives retailers more tools to make a sale.
Better Data Collection

Knowing the customer is a key tenant for successful retailing, and multi-channel engagement
points provide more opportunities to gather information about customers.

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