As high street heavyweights fall into administration, traditional fashion retailers must sharpen their cross-channel strategies to avoid the same fate.
Recent high-profile retail administrations have done little to quell conversations around the future of the high street, and with an estimated £87bn set to be spent online in 2013, traditional bricks-and-mortar retailers know the importance of robust multichannel strategies. But the challenge now is to work out how to measure the sales impact of myriad communication and sales channels.
Womenswear retail group Aurora Fashions, owner of Oasis, Coast and Warehouse, was one of the first to use the word ‘omnichannel’ to describe the shift from looking at a business as a series of multiple retailing channels to seeing it all as one.
There is no doubt the lines that separate these various channels comprising in-store, online and mobile are already blurring. According to a study by Google, 51% of shoppers do research online before visiting a store to make a purchase, while 17% visit a store first and then later purchase online.
These statistics are supported by data from retailers. Premium chain Reiss estimates that about 65% of its online customers also shop in store, while at department store chain John Lewis, 35% of its online sales over the busy Christmas period came through click-and-collect, demonstrating that a significant number of its online customers also visit its stores.
However, according to Shivani Tejuja, multichannel director at fast-fashion retailer New Look, the full extent of this cross-channel shopping behaviour is notoriously difficult to measure. “It’s hard to analyse the precise extent to which online or social platforms are already influencing in-store shopping behaviour, or the influence of the in-store experience on ecommerce activity,” she says. “It’s difficult to measure, but evidence certainly suggests our customers’ engagement with us is not limited to one single preferred channel.”
New Look’s customer insight department estimates that only 1% of its web customers shop only online, with the vast majority shopping across all the retailer’s channels.
Sean McKee, head of ecommerce at footwear chain Schuh, agrees that measuring this shopping behaviour has its obstacles but says it is getting closer to doing it.
“We are working to understand this fully both internally and with partners like Google to arrive at a statistical basis for an answer,” he says. Though he adds: “We’re not there yet.”
One thing Schuh has managed to glean through customer research is that there is a bigger group of store-only customers who do not shop online than there are online-only customers who never shop in stores. Good news perhaps for those who fear that traditional high street retail is dying.
However, McKee adds that this research was carried out before Schuh launched its mobile site, so these results might differ if the retailer were to carry out the research again.
What is abundantly clear is that the shoppers who engage with a retailer across more than one channel are the most valuable type and retailers are going to great lengths in order to engage with these customers.
Richard Cristofoli, marketing director at Debenhams, says: “Customers who shop across multiple channels are worth more to Debenhams than those who shop through a single channel as they spend more with us on average.
Because of this we’ve taken steps to encourage cross-channel shopping behaviour.”
One of the initiatives Debenhams introduced to bridge the gap between bricks-and-clicks includes making free Wi-Fi available in all of its stores to allow shoppers to browse online, compare products, read product reviews and buy online if a product or size is out of stock.
John Lewis also offers free Wi-Fi to its customers in stores. Karen Dracou, head of omnichannel development at the department store chain, explains: “We want to help customers as much as we can on their journey to purchase, and we’ll continue to invest in mobile by making our website even easier to use on smartphones and tablets.”
It is now fairly common for retailers to also offer iPads and tablets in-store, allowing customers to browse their websites on site if they are looking for a particular product.
The importance of the tablet when it comes to cross-channel shopping behaviour cannot be underestimated. Not only do stores use them to facilitate sales but more and more consumers are now using them as their preferred method for shopping online.
According to the British Retail Consortium’s Google Online Retail Monitor for the fourth quarter of 2012, retail searches on tablets were up by a massive 238%, while retail searches on smartphones were up 78%.
New Look estimates that around 11% of its sales are transacted on tablets, while Debenhams says 20% of its customers now own an iPad.
Dan Lumb, ecommerce director at Reiss, describes the rise of tablets as “incredibly important” when it comes to employing effective cross-channel strategies. “We use them in store not only to take sales, but they further establish to our customers that we are digital, and they open up the entire stock range, especially in smaller stores.”
He adds: “They are also used by staff to learn about new products, trend stories and keep up to date with the brand,” he says.
However, McKee asserts that access to retailers’ websites via tablets is merely an extension of their desktop site and that the real evolution in online shopping is coming through mobile, with mobile-optimised sites and apps now common among fashion retailers.
Debenhams was the first high street retailer to launch an iPhone app with a barcode scanner linking to its site, in October 2010. Cristofoli says: “The barcode scanner acts like a virtual shop assistant and enables customers to easily and quickly look up product details in store.”
New Look has taken a similar approach through the introduction of augmented-reality app Blippar, which it uses to give customers augmented-reality experiences in window displays and at point of sale.
Customers using Blippar can scan certain icons and bring to life displays and collections.
“It’s all about trying to create linkage and drive awareness of our authoritative editorial content and the augmented inventory we carry online,” explains Tejuja.
Debenhams interacts with its customers when they are within a certain radius of its bricks-and-mortar stores with GPS push notifications to app users to promote offers and events.
Engagement through social media also continues to be important and can’t be overlooked when it comes to promoting cross-channel shopping behaviour.
Lumb believes 2013 could be the year that social media becomes a more powerful sales outlet. Both New Look and Debenhams are already using social platforms as a direct cross-channel sales driver by providing exclusive offers to their digital communities, such as secret codes to encourage people to the website or to publicise in-store events .
Seemingly no channel can be ignored when it comes to encouraging consumers down the path of cross-channel shopping, but reassuringly none of the retailers Drapers spoke to believe bricks-and-mortar retailing is dead.
“The high street isn’t dying,” says Tejuja. “The way we shop is changing and this demands evolution to reflect customers’ altered habits and preferences.”
Many retailers have already made great strides towards encouraging cross-channel engagement, but the real challenge is going to be to keep this up as technology develops and customers become more savvy.
“As retailers, our job is going where the customers are,” says McKee. “Cross-channel has got to be at the heart of what we do, simply because the customer has put it there.”