The world’s largest retailer will end free shipping for online orders under $50 Canadian starting April 2.
When Delia’s, clothier to teenage girls, went online last year, executives were surprised by soaring requests for catalogs. Since then, most cataloguers have had a similar experience.
It’s called cross-channel marketing and retailers ignore it at their peril, according to a new study “Consumer Direct: Shopping Behavior in the Age of Interactivity” by the Peppers and Rogers Group, a Stamford, Conn., marketing and research company. In fact, a web retailer’s most profitable customers might be coming from the catalog lists. “It’s important to understand the distinction between shopping and buying,” says Martha Rogers, partner in the Peppers and Rogers Group. For instance, after Rogers bought several items from an e-retailer, she received an email telling her that since she bought online she would no longer receive a catalog. “I haven’t bought a thing since,” she says. “I was doing all my shopping in the catalog, but all my buying online.”
The study predicts that what it calls consumer direct shopping will grow from 5% of retail sales last year ($133 billion) to 24% of retail sales in 2010. The study reports that 83% of consumers bought something last year in the consumer direct channel and that 25% of those shopped online.
Retailers have yet to link their customer information to a single database so they can understand who’s buying across all channels. The problem, Rogers says, is that retailers or other web-based service providers are product-oriented, not customer-oriented. “When a bank treats you as three customers, they are treating you as if they are three different banks. You may not be a valuable customer in one area, but you may be very valuable in another,” she says. “They need to see you across all channels.”