February 1, 2007, 12:00 AM

Wooing the lucrative but fickle multi-channel shopper

What many multi-channel retailers may not realize is how much they may have to share cross-channel sales with competitors. Despite spending more and purchasing with greater frequency, multi-channel shoppers tend to be less loyal than their single-channel counterparts, research and advisory firm Gartner Inc. says. The two primary reasons are that multi-channel shoppers are more price-sensitive because they use the online sales channel to conduct more price comparisons, and they have higher expectations for customer service.

It’s no wonder more retailers are trying hard to serve customers across multiple channels: it’s well-documented that the more they shop across channels, the more they spend. They generated about $125 billion in offline sales in 2005 alone, they spend up to 50% more than single-channel shoppers, and they usually buy bigger-ticket items like electronics, appliances and computers, according to research and consulting firm Forrester Research Inc.

But what many multi-channel retailers may not realize is how much they may have to share those cross-channel sales with their competitors. Despite spending more and purchasing with greater frequency, multi-channel shoppers tend to be less loyal than their single-channel counterparts, research and advisory firm Gartner Inc. says. The two primary reasons are that multi-channel shoppers are more price-sensitive because they use the online sales channel to conduct more price comparisons, and they have higher expectations for customer service.

“Retailers need to be aware of these characteristics in multi-channel shoppers because they open the door to decreased loyalty,” cautions Hung LeHong, research vice president for retail at Gartner.

Nonetheless, retailers remain eager to capture more sales and loyalty from multi-channel shoppers. Merchants such as Circuit City, Best Buy and Sears Roebuck and Co. have launched programs enabling shoppers to buy online and pick up in store. The tactic serves not only as a way to bring online shoppers into the store where they might continue shopping, but also to encourage store shoppers to experience the convenience of shopping online.

RadioShack Corp. is piloting a ship-to-store program in 1,300 company owned-stores and plans to roll out the program to its remaining 3,400 later this year.

“Multi-channel shopping strategies are about driving consumer behavior to encourage cross-selling,” says Jimmy Mansker, vice president of RadioShack.com. “The aim is to get consumers that shop online into a store where they can interface with a sales representative that can introduce them to accessories for the purchase, and get store shoppers onto the web site where they can access a much larger catalog.”

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