While consumers increasingly use the Internet for purchases, leading companies are setting the stage for a new retail playing field.
Online spending is estimated to represent more than 20% of overall retail revenue by the end of 2008. In addition, Forrester Research anticipates approximately $29 billion will be transacted online in 2008 through e-commerce retailers. Consumer expectations for seamless cross-channel shopping have increased in parallel, according to a March 2008 AMR Research report. Retailers, however, are facing two major obstacles: a lack of cross-channel operational efficiencies and lingering technical shortfalls.
Cross-channel retail involves delivering a seamless customer experience across multiple sales channels through the sharing and selling of products. This experience is important because cross-channel shoppers — those shopping online, in your store, and by phone — are your best customers. These customers typically spend up to 30% more than single-channel shoppers.
New cross-channel solutions allow retailers to redefine the customer experience, improve merchandising, overcome inventory challenges, capture lost opportunities, take advantage of real-time demand information, and achieve operational efficiencies. Innovative cross-channel solutions include next generation e-commerce systems, such as:
n in-store and online merchandising functionalities that capitalize on consumer demand preferences
n the ability to order merchandise online and have it picked up in-store or delivered directly to the customer
n purchasing and utilizing gift cards and loyalty programs across any channel
n launching marketing campaigns and promotions that can be used both online and offline in stores.
New solutions include cross-channel business intelligence and e-marketing systems, guided selling, and endless aisle capabilities (accessing inventory across the retail chain and generating online transactions from the store via POS, kiosks, or handhelds). By creating a seamless cross-channel environment, retailers are able to realize inventory optimization and greater inventory turn, achieve more effective assortment planning based on accurate cross-channel demand, improve profitability, increase sales, and experience higher levels of customer satisfaction.
The Benefits Of Cross-Channel Retailing
Through the implementation of cross-channel retail solutions, retailers are able to consolidate their multiple sales channels and see numerous benefits, such as:
n increased revenues by using multiple cross-channel capabilities to effectively capture lost sales opportunities
n cross-sell and upsell opportunities during customer in-store pickup
n improved overall customer satisfaction by offering more services in-store and online
n better customer contact, communications, and marketing through improved service options and enhanced personalization and business intelligence
n lower order and fulfillment costs by improving merchandising and inventory management, streamlining fulfillment processes through distributed fulfillment capabilities, implementing intelligent order routing, and shipping cost optimization
n superior merchandising decision making by obtaining new demand and forecasting information.
Implementation Of New Technologies
As retailers explore these technologies and attempt to harness the power of cross-channel retail, they will need to review processes related to cross-channel operations, embrace a next generation e-commerce platform that can support cross-channel business, and utilize the e-commerce platform to provide access to virtual inventory for products not physically available within the store. In addition, retailers must remember to develop new cross-channel metrics, training, and incentives to embrace these sales tools.