Patterns of consumer behaviour develop all the time - especially in the world of multichannel. Liz Morrell outlines what retailers need to know about today’s shopping habits
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Multichannel is now a primary focus for all retailers but the behaviour of customers is changing fast and businesses face a challenge if they are to keep up.
In December, Deloitte surveyed 2,000 multichannel consumers to find out about their shopping habits. Shoppers’ expectations are shifting as quickly as their behaviour. Deloitte head of multichannel Colin Jeffrey says: “What one retailer offers as a new service quickly becomes the expected. Customers will struggle to understand why others don’t have the same.”
The research showed that on average multichannel customers spent nearly twice that of their store-only peers, with multichannel customers spending an average of £130 per transaction compared with £67 for store-only transactions and £113 for internet-only customers.
John Lewis head of multichannel Simon Russell says he has seen a similar trend: “The annual spend of a multichannel customer is more than three times that of a single store or internet-only customer and that has been similar for the past few years.”
Figures for September to November 2010
- Non-food By value, 44% of transactions were digitally influenced, 20% were multichannel. By volume, 34% were digitally influenced, 15% were multichannel
- Clothing By value, 29% of transactions were digitally influenced, 12% were multichannel. By volume, 26% were digitally influenced, 10% were multichannel
- Electrical By value, 62% of transactions were digitally influenced, 29% were multichannel. By volume, 51% were digitally influenced, 22% were multichannel
- Homewares By value, 29% of transactions were digitally influenced, 13% were multichannel. By volume the figures were the same
Source: Deloitte survey of 2,000 consumers December 2010
Both customers and staff are becoming more accustomed to the multichannel experience. Russell says online orders placed in shops have more than doubled in the past year, driven by selling extended ranges online. “That has been a key recruitment tool in getting more customers,” he adds.
Jeffrey believes multichannel is a more considered purchase. “The customer buys with more confidence and knows they are getting a good deal having done all the research,” he says. Retailers are more likely to upsell additional accessories to the multichannel customer than one that buys on impulse.
A major reason for the growth of multichannel behaviour is convenience. More stores are offering click-and-collect services to combine the best of both worlds. The trend is evident at John Lewis - its click-and-collect volumes have more than doubled and continue to grow at just below double this year.
This behaviour continues to boost sales. Russell says: “It drives footfall back in store and there’s also evidence of incremental spend because of it. It’s giving the customer the control when they want it.” When the snow hit retailers at the end of last year, such a facility was vital. Jeffrey says: “Quite a few multichannel retailers did well in the snow, when they were able to offer customers genuine choice in terms of fulfilment.”
The multichannel customer will continue to evolve. Russell believes they will become more demanding because they are still learning how different channels function and how they can use them to their own advantage to improve their shopping experience. What’s more, with the increasing use of mobile devices in store by both retailers and customers, such a trend will continue. Jeffrey says: “The speed and immediacy of some of the mobile devices means it’s easier and more socially acceptable to shop online and consumers are also shopping online within the store. “Customers are going to expect to be continuously connected to the retailer.”
Physical stores will need to evolve. Deloitte says customers of pure-play retailers consider themselves to be multichannel because they will go into other retail stores and use them as showrooms. Jeffrey says there lies a challenge - how do retailers convert browsing customers and stop them going home and buying on competitors’ websites?
The speed of change in the behaviour of the multichannel customer is taking many by surprise. Retailers have only really just grasped what multichannel is all about. Russell Dorset, sales and marketing director for multichannel software provider Maginus, says: “When it started a lot of people thought multichannel was just another channel but the more serious retailers now understand what it really means.”
Ultimately, multichannel is now a basic of retailing with a basic expectation of service. It’s up to the retailers to deliver on that promise or customers will vote with their feet -and their fingers.