A study by Monash University claims customers are becoming comfortable interacting with retailers across multiple channels. The 2012 research by Monash University’s Australian Centre for Retail Studies (ACRS) showed the three most important things shoppers required from an omni-channel retailer were the ability to return products purchased online through a physical store, being able to check in-store stock levels through a website and consistent promotions and sales online and in-store which provides the customer time to browse.
Retailers seem to be making more noise around increased sales budgets allocated to Omni-Channel retailing initiatives. David Jones for example has vowed to increase their SKU count on the website from 9,000 to 90,000 SKUs before Christmas across a number of categories such as fashion, accessories, cosmetics, home, kids, food, gift cards, hampers and wine. They appear to have a magazine app for the iPad coming out, and even a blog.
Another interesting highlight was the news that Harvey Norman's profit in the first quarter of the 2012/13 financial year has dropped by 20 per cent, claiming that) "Technology and entertainment sales continue to be affected by the cautious consumer and continued price deflation". Is this a sign that there’s too much competition in the market for commodity products or is it that the same offering is accessible via a number of other channels and being the big box retailer with no obvious omni-channel structure is no longer a competitive point of differentiation.
Referencing the Monash study Jason Pallant, fellow at the ACRS claims “we know consumers are becoming increasingly comfortable shopping online, and this has made some retailers concerned about shoppers coming in to store to try products but then going online to purchase. However, our research showed that this is not necessarily occurring as much as feared”.
What I found interesting was another of Jason’s comments "Only four per cent of shoppers did their research in a physical store before buying online, and higher prices in store or products not being in stock were the primary reasons these shoppers chose to purchase online instead of at the store.”
This tells me that whatever the latest buzzword, Omni-Channel, Cross-Channel, Uber Channel (joke), it doesn’t make much sense if the ecosystem can’t support all initiatives. Within the Monash study it was reported that 24 per cent of consumers researched online before purchasing in-store. What is encouraging and speaks volumes for bricks and mortar business is that 52 per cent researched and purchased in-store only.
So where are we in the lifecycle? There’s no doubt that online is on the rise, but don’t lose track of what else the market is saying; that being able to source the product immediately and potentially on premise is a key driver in purchasing. Providing a holistic approach to retailing is far healthier then embarking on a particular component to the supply chain and finally supporting the ecosystem so as everyone is treated as a valued customer will speak volumes in this marketplace.