The Importance Of Multichannel Retailing

Many retailers conduct business in multiple channels -- via stores, a Website and catalog/call centers -- but few have mastered the coordination of these channels. Multichannel offerings can be an important differentiator, especially in tough economic times when retailers compete for fewer consumer dollars.

The online authority of the retail chains is evident in a list of the top 15 Web retailers in the Internet Retailer "Top 500 Guide." Traditional retail powerhouses such as Staples, Sears, JCPenney and Wal-Mart are also becoming e-commerce powerhouses. Only two Internet pure-plays are present—Amazon and Newegg.com. Three consumer brand manufacturers and two catalog retailers also make the top 15.

All retailers are under pressure to maintain high customer satisfaction in all channels, improve operational efficiency, manage inventory across the organization, and provide seamless purchase and delivery options.

"In response to customer expectations and the need for greater profitability, retailers are bolstering their multichannel offerings," said Jeffrey Grau, eMarketer senior analyst and author of the report "Multichannel Retailing: A Competitive Differentiator."

But the path to multichannel proficiency is fraught with complex organizational and technological challenges.

"Most retailers lack an executive dedicated to cross-channel operations and still have much work ahead to integrate their inventory and systems, data warehousing and business intelligence systems across channels," said Mr. Grau.

Nevertheless, many retailers are determined to spend more over the next couple of years to bolster these capabilities. The reality of processing online purchases to be returned in-store or shopping online and picking up in-store and myriad other options are not easy, as systems aren't integrated. Retailers need to move away from separate businesses—store, online and catalog—and realize it's the entire business with unified channels that matters. Otherwise, consumers view the brand as separate businesses that share a brand logo.

SOURCE: eMarketer