Retailers Must Connect with Consumers Via Multiple Venues

Retailers must integrate their supply chain across all channels to compete for and maintain customer loyalty today when more consumers are becoming comfortable using multiple channels for shopping. According to a retail demand study by Adjoined Consulting's independent research division, nearly 80 percent of consumers use physical stores, online and catalogs interchangeably, up from just 57 percent one year ago.

Customers want to be recognized by retailers regardless of the interaction, whether it is with a sales associate, a store kiosk, a Web site or a call center representative.

Empowered by ever-increasing access to information and competing products and services, consumers are redefining the business context of the multi-channel shopper. They are comfortable interacting with retailers through a wide variety of channels - stores, outlets, catalogs, Web sites, call centers and e-mail today; and interactive TV, cell phones and kiosks tomorrow. Additionally, consumers are now beginning to shop via digital devices, adding yet another dimension to online and offline channels. While providing greater flexibility, alternate channels also are creating increased complexity for consumers and retailers alike.

Consumers rely heavily on the Internet to gather information on products and retailers, regardless of the selected purchase channel. Concurrently, they may go to a physical store to investigate the look, feel or quality of a product but then order online.

From pre-purchase research to returns, retailers must optimize all channels and provide a consistent shopping experience regardless of the point of engagement. Consumers expect all aspects of the retailer supply chain to work seamlessly with each other to deliver a single, unified customer experience. The days of online versus physical stores are behind us, and the champions will be those retailers that can integrate multiple shopping channels seamlessly while delivering the right products and services at the right price and time.

Take the evolution of the outlet for example. Many retailers originally used outlets as a means to sell off-quality, out-of-season and excess stock. Today, outlets are seen as an important channel for sales to satisfy consumer desires and preferences for alternative products that are value-priced and have a different assortment than retail stores. In order to generate consistent revenue while incorporating these alternate channels into the sales mix, honed supply chain processes are necessary to effectively manage returns, merchandise and pricing strategies. Likewise, consistent brand monitoring and management is necessary to build equity with consumers across the various channels.

Addressing the needs to shop via multiple channels, retailers also must understand the demographics and psychographics of these audiences to tailor offerings accordingly.

The multi-channel shopper also considers other factors before bestowing its loyalty to a particular retailer, including: Brand image: Customers seek retailers that project a consistent image through all channels. This becomes a challenge for retailers when catalogs, outlets or online stores carry different products or prices from those of physical stores.

Merchandise assortment: Typically, customers expect that items available in a retail store also will be available on its Web site (or catalogs) and vice-versa. A significant product overlap across channels reinforces the one-brand image in the customer's mind.

Pricing: Customers expect pricing consistency across channels (excluding shipping charges and sales tax). However, in some cases, retailers need to adjust their pricing strategy because of the competition they face in different channels. Retailers with stores in multiple markets often set different prices for the same merchandise to deal with differences in local competition. Typical customers do not realize these price differences because they are only exposed to the prices in their local markets.

Customer service: Customers expect consistent service independent of the channel they use. They may want to return products in stores that they purchased online or they may purchase a product through a catalog and check the delivery status online.

Long since the days when Ford only offered its cars in only one color (black), today's retailers must aggressively track the needs and tendencies of their customers and deliver targeted and specialized products and services, leveraging all the channels and technology available. Multi-channel shopping is dramatically changing merchandising, pricing and supply chains, and retailers must balance these dynamics to meet the ongoing demands of consumers. With more and more channels to choose from, consumers will ultimately decide to shop where they feel most comfortable. That said, what is your organization doing to accommodate the needs of the multi-channel shopper?

John White is managing officer, strategy services - Consumer Packaged Goods & Retail Media of Adjoined Consulting, an industry-focused, full-service management consulting, technology and outsourcing firm targeting the global 2000 market.