1 The Challenges Of Multi Channel Retailing Profitable Multi Channel Marketing March 2010

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The Challenges of Multi-Channel Retailing


The environment


The environment

• Blurring, if not eradication, of historic divisions between retail, direct, e-commerce

• The vast majority of retailers are now ‘multichannel’– Supermarkets– Department Stores– Sportswear Chain– Furniture Warehouses

• Home Shopping has moved from a niche dominated by high volume low end businesses 20 years ago to the mainstream

• UK Online Sales 9.5% total retail (£41billion) – of which slightly over half is music and travel

• Home Shopping businesses have become mega brands– Amazon– E-bay


The customer


The customer

• Customers have become increasingly promiscuous• They are driven by a desire to get ‘the best deal’• Purchases made ‘in store’ are heavily researched on-

line• Eighty-four percent of occasional buyers, those who say they

have made an online purchase only once or less in the past six months, describe their usual use of the Internet for shopping as "I usually shop online and go offline to purchase."

• Brand loyalty has diminished with the growth of choice• Price (or at least ‘value’) is key

• UK shoppers have the lowest level of customer loyalty in Europe, just half that of those in Germany, with almost two thirds switching retailers in a bid to save money.(ncr 2009)

• AND this happened in a period of economic growth and general well being!


Pressure


Pressure

• The number of ways of marketing to and communicating with customers has exploded, and will continue to do so

• Pressure on price and margin is matched by the need to support a wider range of marketing activities – just to be in the game

• Whilst marketing through additional channels drives additional business this is diluted by cannibalisation

• It all adds up to …. more pressure on marketeers!


Marketing channels


Marketing channels

Paid Search

DisplayAds

Catalogue

Retail

Social Networking

Mobile Inserts

SEO


Data management


Data management 1

Housefile Mailings

Requester Mailings

Database

Purchases

Order Data

Catalogue Requests

Space Ads

Card Decks

Lists

OTPInserts


Data management 2

Catalogue Requests

Housefile Mailings

Requester Mailings

Database

Purchases

Retail

Space Ads

- Walk Bys- PR- Recommended- Thin Air

Purchases

Order Data

Order Data

Lists

OTPInserts


Data management 3

Catalogue Requests

Housefile Mailings

Requester Mailings

Database

Purchases

E-mail ProgrammeHome Shopping

Retail

Space Ads


Web

- Natural Search- Paid Search - Online Ads- Affiliates- Thin Air- PR

Orders

Purchases

Order Data

Order Data

Order Data

Lists

OTPInserts


Lists

OTP

Inserts

Data management 4

Catalogue Requests

Housefile Mailings

Requester Mailings

Database

Purchases

E-mail ProgrammeHome Shopping

Retail

Space Ads


Web

- Search Engines- Online Ads- Affiliates- Thin Air- PR

Orders

Purchases

Retail Mailings

Order Data

E-mail ProgrammeRetail

- Natural Search- Paid Search - Online Ads- Affiliates- Thin Air- PR


Marketing process


The traditional marketing process

• The ‘well trodden’ route

Develop AmendEvaluateMeasure RetestTest





………………and now

• The ‘long and winding road’


The issues


The issues

• More things to spend your budget on• Marketing process no longer linear but organic• More difficult to measure ‘real’ ROI• But more opportunity for testing at low cost and

commitment• Constantly changing landscape• More resources needed to manage the range of

activities• More specialist / technical than ‘traditional’ marketing

techniques


The day ahead


The day ahead

• Developing a strategy• Customer acquisition choices• Developing and retaining customers• Collecting, analysing and interpreting data• Implementation and defining ‘success’


The Challenges of Multi-Channel Retailing

Business

1 The Challenges Of Multi Channel Retailing Profitable Multi Channel Marketing March 2010