Red Zebra Business Centre - Management Memos
August 2011 Making Measurably More For Your Business Since 1985! Page 1
MaxProfile
Multi- Channelling. A Term
Very
Easily Misunderstood!
Max Williams, Principal Consultant

In this edition we look at some of the impacts on retailing in Australia. and New Zealand. One thing stands out. The role of the internet is simply not properly understood!  

Internet shopping is a revelation to most of us. We didn't know that so many things are so available, and so cheap!

And thereby hangs this particular tail.

There are several reasons why things can be cheap on the internet:

Which leads us to see the big misconception - that internet shopping is only about price.

The internet empowers shoppers to properly compare offers. If there is no difference between traders but price, obviously the lowest price wins. All of us want to save money.

Similarly, if one offer is inherently better than another, except that the price for the most favoured is too high, price will again determine the outcome.

What this means, when all is said and done, is that traditional retail depends largely on a customer's inability to compare prices - that is, customer ignorance - in order to set higher prices.

That is a terrible thing to have to admit. But it is the case!

The real strength of the internet - and this is for savvy retailers only - is that it brings massive new opportunities to engage with customers, add more value, and develop deeper, stronger loyalties that we have ever been able to do before. That is where your intenret involvement is monetised!

Multi-channelling (sometimes called 'omni-channelling') involves all the channels of communication (as you can see in the main image) to drive this deeper engagement.

Like all new and more powerfu things, we have to learn how to use and apply them. That is neither easy, nor quick!

For this reason, we have introduced our e-commerce portal. It enables small retailers to begin this process of on-line engagement economically, quickly, and, easily.

While the real power of multi-channelling is so impressive, many have chosen to internet it in a very narrow way - meaning only to sell both in store and on the internet - and usually by having separate brands and separate price points. That's a bit like having a hybrid car, and disconnecting the battery! So keep a wide open mind!

This multi-channelling is not technology driven. It is powered by consumer pull!

Retail. It's a new Age

A

ustralian retail has, quite suddenly, seen the need to drastically lift its game. The Ozzie dollar is high, the caution brought from the GFC remains, the impact of internet selling, and a range of other politico-economic factors have made it hard. Some retailers are heeding the need for change. Here are some pointers .


Five New Trends in Retail 

1.  Customers are informed

Shoppers have permanently moved from impulse buying to information. They want information about the product without being ?annoyed? by sales assistants.

While digital screens and self-service kiosks are great tools to achieve this in store, this role is being overtaken by internet searches in the comfort of home.

2.  Customers seek immersive experiences

Customers tend to shop in many stores before deciding which one to buy from and they also buy online. They have become multi-channel shoppers.

So a critical factor to success for retailers is to create new levels of loyalty or a reason for customers to come back to their outlet.

One way is to create an ?experience? for the shopper. A camera retailer, for example, would keep its cameras safely out on display and powered, so shoppers can take photos and look at the options each camera offers.

3.  Integrated merchandising

Small and large retailers alike are introducing systems which are fully integrated to their POS system to save management time.

Systems that can automatically produce the right promotional signage and shelf edge labels in the right media, in the right store, in the right quantity, showing the right price, in the right order and at the right time.

Integrated merchandising ensures that when a product is scanned at checkout, it is the same as the price on the shelf and that the same price is also on the website.

4.  Instrumented execution

To increase efficiency, there is an increasing tendency to instrument the whole sales process from shelf merchandising to checkout. For example, RFID (radio-frequency ID) tagging of apparel, and temperature sensors on perishable food items, have become very popular in the US and UK. Look for them increasingly in Australian and New Zealand outlets.

5.  The sustainability discourse is reviving

Sustainability was on all retailers? minds before the GFC, then went 'dead'. And although US research indicates that 88 per cent of brands and retailers want to develop more sustainable initiatives, they do not want to pay for the changes that would be required.

Now we see retailers once more entering into the sustainability discourse, and adding 'sustainability' issues to their marketing imperatives.
Australian and New Zealand Retail misses out online
The Engaged Web, a benchmark study published by EPiServer, a provider of platforms that drive online engagement, has revealed that many online brands are failing to maximise opportunities to engage with website visitors.

Ironically, two of the most consumer-focussed sectors whose websites are largely revenue-generating, retail and utilities, were the worst performers in the study.

'As the web increasingly becomes a primary means for communicating, presenting a compelling online experience is now more critical for organisations wanting to engender brand loyalty and maximise online business potential,' said Andreas Stjernström, country manager for EPiServer Australia and New Zealand.

'Consumers want more than a web destination and expect more sophisticated engagement that demonstrates a brand's understanding of their needs and wants, and ultimately drives them to commence or maintain a relationship with the brand", he said.

The study revealed that telecoms and sport fair well when it comes to featuring online communities and blogs, however retail is the weakest sector in both categories.

Sporting sites lead the pack in the use of rich content. Supporting text isn't as impressive with only five per cent of sites having copy that is engaging and easy for website visitors to read.

It is interesting to note that 44 per cent of Australian companies appear to be embracing social media by advertising their Twitter account directly on the homepage and 34 per cent of companies draw attention to their Facebook presence. Despite this, Retail fared badly. In other words, just a few "early adopter" retailers are maximising their on-line strength.

The majority of sites have contact details that are hard to find, and it's hard to get help from these companies. A phone number was the most commonly advertised engagement channel (90 per cent), followed by an email address (64 per cent) and a web form (58 per cent). Only 1per cent of the brands offer live chat as a more interactive experience.


The good news is that there are steps you can take to better engage with your website visitors. This will develop a strong, growing, sense of community and brand loyalty.



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