The multichannel journey is picking up pace as retailers learn what works best for the customer. Here are some of the highlights from Retail Week’s Multichannel Now report.

John Lewis’ multichannel offer is seen as one of the best in the industry

Download the Multichannel Now report

Download the report here.

In the past 14 months the landscape for multichannel retailers has become increasingly demanding.

Rising consumer expectations and growing use of smartphones and tablets is putting more pressure on retailers to keep up with the changing environment.

Retail Week’s third annual Multichannel Now report (available to download here) looks at some of the steps retailers need to take to meet these expectations and operate successfully in an omnichannel world.

The report, produced in partnership with wi-fi provider The Cloud, is based on a series of in-depth anonymous interviews with 20 ecommerce and multichannel leaders. Their insights have been used to produce a comprehensive piece of research on the industry’s views on and strategies for multichannel in the UK in 2013.

Last year’s report depicted an industry still learning how to respond to the challenge, as well as the opportunity,
of multichannel. This year, one of the main findings was that there is a growing consensus about how to deliver omnichannel and what “good” multichannel retailing looks like, with retailers such as John Lewis, Next and DIY etailer Screwfix - which has a strong click-and-collect offer - leading the way.

Seamless experience

The chief executive of one high street fashion group says: “Successful multichannel and omnichannel retailers have had to take multichannel seriously and re-engineer their businesses. They have to integrate all of the
departments into the main core of the business so that there is no differential between stores and online.”

The marketing director of a health and beauty retailer agrees and describes a good multichannel retailer as one in which the organisation completely embraces the digital and physical store offer. He adds: “When you walk into one of those stores, its colleagues are as confident and comfortable with their online offering as their offline offering.”

Multichannel Now

Retailers highlighted three vital aspects to delivering successful omnichannel: a seamless customer experience, a single view of inventory, and a single view of the customer.

The omnichannel development manager of a department store says it aims to provide a consistent experience across all the customer touch points and explains: “We recognise that our customers’ behaviour is changing and we need to adapt from operating the business in a multichannel way with separate channels, to delivering our brand consistently across all channels at all stages of the purchase from browsing, to research to buying.”

Retailers are increasingly focusing on improving and linking existing channels, with mobile and tablets, click-and-collect, and online access in store all playing a part. The chief executive of a multichannel retailer describes mobile as “a bridge to other channels” as well as a sales channel, while the omnichannel development manager of a department store says: “We have introduced wi-fi into all of our shops to enable customers to access apps and all of the online shop.”

Real-time tracking

But to offer a truly seamless experience, retailers need to be able to track customers across those channels. One multichannel director of a high street retailer says: “The most important thing this year is having a single view of our customer.”

The ability to do that is still evolving and the majority of retailers admit that, despite a surfeit of customer data, they have not quite achieved it.

Consumers increasingly expect that they will be able to shop between the channels as they please. Echoing that, research conducted for the report by analyst Conlumino found that 58.2% of consumers now use two or more channels when shopping for clothes, compared with 31.6% 10 years ago.

Retailers have access to vast amounts of customer information via loyalty cards, transaction data and customer analytics software, but for most the technology can’t quite keep pace with consumers’ movement across channels.

The ecommerce director of a grocery retailer says: “I suppose nirvana looks like a real-time view of your customers whenever they want to interact with you. But there are data issues there. It is not practical to recall your customers’ entire transactional history because the data loads are too big.”

However, some retailers have attained a single customer view to a degree by adapting their loyalty schemes to multichannel. The marketing director of a high street retailer says: “We have sorted out the supply chain and made sure the loyalty card can be used in any domain. Because we have a successful loyalty card, we understand how customers are interacting and we are able to give personalisation in all our channels.”

Even then retailers have to tread carefully. The Conlumino research found that about 58% of consumers have concerns around sharing personal data with retailers.

Stock solutions

Retailers are also at different stages of attaining a single view of stock levels across channels. The director of a fashion group refers to that as “the dream we can’t yet get to” and explains that the business has a high number of brands and warehouses, which makes integration difficult. Similar-sized retailers said that they are bound to legacy IT systems, which limit what they can do.

The ecommerce director of a department store also points out that obtaining a single view of stock is difficult: “Stock goes missing in store, things are misplaced when someone tries something on or brings something back, so you know you have an item in store somewhere but finding it is like looking for a needle in a haystack. The logistical challenges are huge.”

Retailers cite a lack of real-time information about where products are located within the business as one
of the toughest challenges. The omnichannel development manager of a department store says such data would help provide transparent stock visibility for the customer.

Many retailers have made great progress since last year’s report. The ecommerce director of a grocer says that since the last time he was interviewed (in 2011) the business has been “moving away from multichannel towards omnichannel”, which offers a more integrated brand experience across each of the channels.

Customer focus

He explains: “It is just retailing, but to the extent that you have more touchpoints through which customers can access you, and you need to keep working at keeping them joined up. So if a customer contacts you on the phone or online, or walks into a store then, increasingly, you can recognise them across those different channels.

Multichannel Now

We are making every effort to do that but I don’t think we have won the battle yet.”

The ecommerce director of an electricals retailer says the journey towards multichannel involves getting better at delivering consistency across channels on price, product range and brand experience.

He explains: “People are measured on how fast they have made that journey. The standout people for me recognise the way customers use their website and their shops and fix the fundamentals around that.”

There’s no doubt there are plenty of challenges - creating a consistent customer experience, as well as a single view of inventory and of the customer, is a complex process. But what’s crucial, retailers say, is that the customer is at the heart of their strategies.

The director of ecommerce at a department store business says: “The most important part of our strategy is to put the customer at the centre of everything we do. That is clear. We start decisions with the customer and finish with decisions about the customer. That is because we know the value of a multichannel customer is so much higher that a single channel customer.”

There is still much work to do for many retailers on their multichannel journey, but great progress has been made nevertheless.

Download the Multichannel Now report

Download the report here.