August 20, 2004, 12:00 AM

Multi-channel retailing has taken over the industry, a new study documents

A new survey by researchers the Aberdeen Group shows that a mere 6% of store retailers operate only one channel.

 

It hasn’t taken long for the retailing industry to embrace the concept of multi-channel retailing. A new survey by researchers the Aberdeen Group Inc. based on responses from subscribers to Internet Retailer’s IRNewsLink e-mail newsletter shows that a mere 6% of store retailers operate only one channel. “For a all practical purposes, the single-channel retailer doesn’t exist any more,” says Paula Rosenblum, director of retail research at Aberdeen Group.

In spite of the embrace of the multi-channel model, nearly 25% of respondents have no idea whether their multi-channel customers are more profitable than their single-channel customers, the survey reveals. “Those are the walking wounded,” Rosenblum says. “Things move so fast in this industry these that you better know the value of your customers because they exhibit no loyalty and can shift to another retailer quickly.”

The survey, conducted in June, reports that:
• 44.7% of retailers have three channels of store, catalog and Internet. One-fourth of those retailers have integrated their systems across channels.
• 20% sell through catalog and Internet
• 19.5% sell through stores and Internet
• 1% sell through stores and catalog
• 7% are only online
• 2% are only through catalog or other direct, non-Internet channel
• 4.1% sell only through a store.

As for the profitability of multi-channel customers, 38.3% report they are significantly more profitable than single-channel customers and 22.8% say slightly more. 10.4% say equally as profitable, 5.1% say less profitable.

Retailers need to re-organize to take advantage of the multi-channel model, Rosenblum says. The point of any re-organization should be to communicate a single brand across all channels, she says. That’s achieved by implementing centralized order management, customer database and inventory database, she says. “It’s all about consistency,” she says, “so when a customer comes into a store, the store associate knows what she bought online and can suggest other products.”

The results are contained in Aberdeen’s report “The Integrated Multichannel Benchmark Study: Gaining Competitive Advantage by Fulfilling Multichannel Demand,” sponsored by MarketWorks, Yantra and IBM.

Aberdeen Research Multichannel Report: Aberdeen Group’s Integrated Multichannel Benchmark Study profiles the appropriate multichannel selling and fulfillment models required to serve today’s empowered customers To download a free copy of this report, click here.

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