Online Won't Kill Bricks And Mortar Retail

Oct 3, 2011

By Grant Harrod, CEO, Salmat

For retailers, the time to radically change the way they connect with consumers has come. But this does not mean they need to abandon their bricks and mortar store fronts and move everything online. Nor does it mean they must replace tried-and-true forms of promotion with social media. 

The good news, particularly for retailers with a heavy investment in traditional retail assets, is that attracting and engaging today's consumers does not mean getting rid of the old to make way for the new.  The new era is all about creating a dynamic and rich tapestry of integrated, multi-channel communication.

While much has been made of the rise and rise of online retailing and the explosion of new media, the reality is people have diverse and fragmented media habits and purchasing preferences.

Today's consumer, be they young, old, male or female, wants choice - and this means a greater number of ways to access and engage with a brand or retail environment.  The age-old mantra "the customer is always right" now extends to their choice of how they browse, purchase or connect with a brand.

The untapped opportunity is in capturing those customers who increasingly want to ‘interact' more with a retailer's brand. They are searching for lasting meaningful relationships.  So the real question is whether retailers are making this easy or difficult for consumers to engage with them.   

Multi-channel communication bridges the divide between traditional and new media to create great customer loyalty and maximise the company's reach.

It should start with a customer-centric viewpoint and desire to create the very best possible customer experience every time they engage with a brand. As vital as the location of a bricks and mortar businesses is to its success, so too should the selection of the customer communication or engagement channels. 

While the channels selected between businesses will differ, tailoring a multi-channel approach will ensure the retailer speaks to a wider audience while adapting a flexible approach that tunes in to individual customer needs.

The major pitfall to avoid is being seduced by technology and discounting tried and tested mediums. All the various avenues to reach customers are equally relevant and just as vital. Whether these include the retail store, printed catalogues, an e-commerce website, customer loyalty programs, mobile applications, or a social media community - becoming a successful multi-channel retailer means adopting a flexible, channel-agnostic approach.

The big challenge for marketers and retailers is to provide these various touch-points or channels in a consistent, integrated and interconnected network.  All channels should be complementary - not supplementary or siloed.

Retailers need to be mindful not to concentrate too much on one channel at the expense of others, knowing your customers and finding the right balance to avoid missing any part of your customer audience will help underwrite your business' growth potential. 

It is reassuring to see successful retailers embrace the new digital dynamic while continuing to invest in existing channels and delivering greater levels of personalised customer service and engagement to meet all tastes and shopping needs. 

And with the continued proliferation of web-enabled mobile devices, consumers are increasingly accessing more online content whilst out and about, providing retailers with the opportunity to integrate their online and off-line customer experiences. Engaging customers via mobile will be one the biggest drivers of a retailer's off-line and in-store strategy.  

The golden rule for retailers is to integrate the various channels while keeping the execution unique for each.  Simply running multiple channels in isolation from each other will confuse and frustrate customers - who will vote with their wallets and go elsewhere.

As an example, the same promotional offer should be presented across all channels to let your customers decide how, where and when they engage with you. It's all about giving them the very best opportunity to do so.

A customer who shops regularly and holds a loyalty card expects the retailer will know their preferences and reward them accordingly, whether they engage online, in-store or via a mobile application. Similarly a customer may choose to read a printed catalogue one week and visit the website the next, or use a product QR (quick response) code in your catalogue to obtain additional information online before going in store to make their purchase.  

While this level of integrated sophistication is a challenge, it also presents an enormous opportunity and the prize is significant.

Recent research by the Australian Centre for Retail Studies at Monash University shows that 42 per cent of Australians are single channel shoppers and only shop in-store. However 58 per cent are multichannel shoppers and spend between three to six times more (depending on the channel and category) than the single channel shoppers.  Comparison to 2010 figures shows that this multichannel shopping behaviour has increased by 9 per cent across the Australian population, which is a dramatic rise in just 12 months (‘Multichannel & Social Media, Multichannel Search Behaviours' September 2011).

We now know that multichannel shoppers shop more, spend more and display more loyalty to a brand. This is powerful stuff and the opportunities for retailers are there for the taking.

So, bricks and mortar stores will survive in the digital world, but it will be just one of the many avenues retailers use to reach out and interact with new and existing customers.