The retail sales landscape has changed drastically in the last 20 years, moving from a largely brick-and-mortar experience to a much more diverse ecosystem. Mobile technology and ecommerce innovation mean that today’s consumers are never far away from exactly what they want, in seconds.
In such an expansive marketplace, retailers must find a way to both differentiate themselves and add touchpoints to interact directly with consumers, meeting the buyer wherever he or she prefers to be.
This situation places small and medium retailers in a dilemma: expand their operations and raise their overheads, or risk missing out on sales by forgoing valuable opportunities for direct reach. It’s become increasingly obvious that to have any success, your retail strategy must meet consumers’ changing preferences and shopping habits. As such, traditional tactics must be combined with newer approaches, creating a multi-channel strategy that gives you the best possible exposure.
Focusing on One Channel Means Closing Too Many Doors
The days of stores relying exclusively on brick-and-mortar sales are quickly fading away. Despite their continued importance as part of a broader strategy, physical retail has been hard-pressed to compete with the significantly more convenient ecommerce model.
Even for stores that have niche specialties, it’s difficult to stand next to Amazon, which can offer thousands of similarly niche-relevant products at more affordable prices.
Data bears out this view, as more people spend their dollars online. According to a US Census Bureau release, nearly 10% of all retail sales happen online, a number that has remained on a steadily upward trajectory for several years. Moreover, nearly 43% of Americans call themselves regular online shoppers.
All this does not necessarily presage the death of brick-and-mortar, but it does mean that companies can no longer rely exclusively on physical POS sales as their only strategy.
Despite their advantages, single channel strategies’ disadvantages make them increasingly untenable. For one, lower costs achieved by reducing marketing needs are quickly dwarfed by the opportunity cost in terms of revenue, exposure, and brand recognition. Similarly, dominating your channel may not mean much when you realize there are significant limitations to your expansion. Finally, single channel strategies often discount an important fact of the changing landscape: Consumers are no longer just looking for purchases, but rather experiences, according to management consulting firm McKinsey and Company.
Opening More Channels Opens More Opportunities
Multi-channel and omni-channel retail strategies are becoming more popular as companies realize that sticking to one single outlet may have some benefits, but it has a low ceiling for revenues.
More than ever, consumers are exploring more avenues before they make a purchasing decision, including online and offline channels. Indeed, studies have found that consumers are increasingly swayed by online reviews and other digital factors. Additionally, they are looking for quicker access to shopping options once they’ve made their decisions.
One of the biggest advantages of multi-channel strategies is that they generally prioritize a direct-to-consumer approach. This gives businesses more control over their brand image and allows them to create a stronger connection to consumers. Moreover, it gives companies better access to data about their consumers.
Most importantly, perhaps, multi-channel approaches are best suited to handle the ever-shifting purchasing preferences of consumers. A recent report from BigCommerce notes that while 65% of consumers surveyed purchased goods from a physical store in the previous six months, 45% had patronized an online store, 78% had bought via Amazon, and 11% even said they’d shopped on Facebook.
It’s important to note the influences that go into consumers’ purchases, with the report revealing that everything from seeing ads on social media channels (30%) to finding a product on Amazon (36%) and customer reviews (34%) boosted purchase decisions.
Consumers are indeed shifting to multi-channel shopping, with a majority reporting a combination of preferred methods. One 2016 study found that out of 46,000 consumers who were tracked over a two-year period, 73% reported using multiple channels when making a purchase. Importantly, consumers value the presence and interaction across companies’ various touchpoints.
For instance, Nike has been lauded for creating an omni-channel strategy that prioritized synergy. The company’s multiple touchpoints—mobile, in-store, website, etc.—allow consumers to easily shift between in-store shopping, making purchases online, and finding the products they want effectively. In the end, omni-channel strategies deliver results.
The same study, moreover, found that multi-channel shoppers spent on average 4% more in-store, 10% more online, and logged nearly 23% more repeat shopping trips to an individual retailer than single-channel shoppers.
Creating a Retail Experience
In the end, multi-channel strategies are about raising your ceiling for revenues. Consumers are looking at more screens and channels than ever before and are being influenced by them in turn. By creating a retail strategy that embraces a holistic approach to sales, you’ll create synergy between your touchpoints and better anticipate your customers’ needs.