Bricks and mortar, bits and bytes

Despite pioneering multi-channel adoption, UK retailers still have some way to go, as Miya Knights discovers

UK consumers have embraced the choice and convenience of shopping online, spending more than in any other European country. According to a report by the Centre for Retail Research, commissioned by shopping comparison website Kelkoo, the UK last year accounted for 30 per cent of total European online sales.

So why is it that a product or deal displayed in a retailer’s store may not be available to buy online or vice versa? Or why is it sometimes not possible to return a product bought online to the same retailer’s store?

Andrew Joiner, chief executive of web content management software company Autonomy Promote, says such problems occur because of the move from just bricks and mortar, store-based operations to sales that have more to do with bits and bytes. “In the past, there were off or online channels,” says Mr Joiner. “But now there are mobile and social channels as well as still having to support the voice component. Once you have that fragmentation, the business doesn’t have a single place to go for insight into customers or performance anymore.”

Having such insight can, for example, help optimise the integration of social or user-generated content into an eCommerce site to dramatically improve conversion rates – no mean feat when a frustrating online checkout experience will lead nearly two-thirds of customers to abandon a purchase.

Younger people grew up with the internet where the shopping journey may start and end in any channel

In fact, a recent survey, by enterprise management software company SAP, of 100 IT decision-makers within large retail organisations, highlights that the challenge of turning the explosion of data generated across multiple channels into insight was the biggest barrier to the deeper understanding of their customers.

Yet it also revealed that 78 per cent of retailers see customers as being more responsive to promotions and offers, and more demanding of personal service (75 per cent) than they were one to two years ago. Chris Osborne, retail principle in the UK and Ireland for SAP, says: “Emerging technologies and analytics are now allowing retailers to respond in real time where, with the growing popularity of the smartphone, personalised offers could even be targeted at participating customers according to which aisle they’re in.”

Brian Hume, founder and managing director of retail training and consulting practice Martec International, says so-called digital natives are also driving the need for customer insight. “These younger people grew up with the internet where the shopping journey may start and end in any channel. This is why click and collect or in-store ordering services are just about offering them convenience,” he says.

Multi-channel insight and strategy are also driving the likes of Apple and Oasis to use mobile devices or kiosks in assisted sales, or for self-service and queue-busting. And this is why, despite TV’s Mary Portas lamenting the fact that one in six shops now lies vacant, even eCommerce giant eBay decided to open a pop-up shop in London before Christmas.

As technology supports both the proliferation and blurring of sales channels, internet retail trade body IMRG says mCommerce sales via mobile devices already accounted for 3.9 per cent of eCommerce transactions during the third quarter of 2011. And that is without the pending impact of near-field communications (NFC) technology for enabling the convenience of contactless mobile payments.

Razat Gaurav, senior vice president in Europe, Middle East and Africa (EMEA) of supply chain software company JDA, adds that retailers could no longer afford to operate separate supply chains for each channel in the back office, just as they ignore at their peril customer expectations front of house of a seamless experience. “Pooling inventory across channels to drive sales is part of an integrated approach that can help serve customers better and more cost effectively,” he says. “Knowing your customer and what inventory you have available is key.”