Multi-channel retailers believe that the product research shoppers do on their sites results in more offline than online sales, but they have yet to incorporate this perspective into the standards they use to judge their sites’ success, according to a new report by New York-based Jupiter Media Metrix. The danger: that in following the lead of pure-plays who have no choice but to scale back on web operations in the quest for profitability, multi-channel sellers who cut back on their own web investments will hurt both their online sales and their ability to influence sales offline -- where Jupiter estimates consumers spend $5 for every one they spend online.
“Retailers must strive to maximize their sites' ability to not only drive online sales, but also to drive informed customers with distinct purchase intent into stores,” says Jupiter analyst Ken Cassar. “Approximately two-third of the overall benefit of a retail web site cannot be accounted for by online transactions alone.”
Multi-channel retailers will gain by tightening integration among channels – and that includes integration on the back end. Retailers already have made strides in front-end integration, with cross channel promotion and policies that allow merchandise bought online to be returned in stores. Back-end integration that links retailers’ store inventory and pricing to their web sites, allowing them to track a customer's purchasing behavior across channels, is less common, but that, too, is changing. About 24% of retailers polled by Jupiter provide visibility of store inventory on their web sites, and another 29% say they’ll add this capability within two years. Increasing integration at the front end will raise the bar for integration at the back-end, says Jupiter. While in-store acceptance of returns of online purchases can be done manually at low volume, for example, high volume retailers will need a more sophisticated system to track product history, determine disposition, and charge the return to the appropriate channel, according to Jupiter.
Though the cost of developing a completely integrated selling operation varies greatly and can be high, it will level off over time as scheduled upgrades of in-store systems are built to web–based standards, predicts Jupiter. “It’s critical, though, that brick and mortar retailers’ IT departments are aware of the integration needs of their web sites, and purchase store systems that are capable of working with the company’s web site,” says Cassar.
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