August 19, 2008, 12:00 AM

Multi-channel retailers are slow to invest in online technology

An RSR Research survey finds that while web-only retailers innovate more, some store-based merchants moving online invest in just the basics.

Online-only retailers are striving to differentiate themselves from store-based retailers by providing larger product assortments and more distinctive customer experiences online. But store-based retailers that move into online sales are holding off-focusing on basics like product information and availability, according to a new study from RSR Research.

The survey of 108 web-only and multi-channel retailers found that store-based merchants are holding back on investing in technology while they wait for consumers to vote with their wallets on what they want their online experience to look like.

“It’s a real disadvantage, if you’re primarily a store-based retailer, to ignore the advantages that cross-channel can give you,” says Nikki Baird, managing partner at RSR Research and co-author of the report, “Playing well with others: E-commerce’s evolving role in the customer experience.”

For example, while store-based retailers identified the ability to improve online merchandising as a top opportunity for improving the performance of their sites, some still struggle with a more basic problem: getting the product out the door and into consumers’ hands. Such retailers are focusing on improving fill rates and on-time delivery rates of online orders, the report found. Meanwhile while web-only retailers are focusing on leveraging the power of customers reviews for more advanced opportunities, such as planning product mix.

”While customers are turning to the online channel for increased functionality, service and product availability, (store-based) retailers’ understanding of how consumers use e-commerce sites remains foggy at best,” according to the report. “As a result, they have adopted what they perceive to be a logical first step: ensuring that their product mix is accurate and up to date. “

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