You’d have to be living down a very deep hole not to have recognised that multi-channel retail is the way to go for merchants that have a physical stores estate.
On day one of the World Retail Congress in Berlin this week delegates were given yet more evidence of the benefits of operating across multiple channels – in an integrated manner. Retailing legend Michael Gould, chief executive of Bloomingdales in the US, offered many insights into how he runs this iconic stores business and one of the most telling was how offering a number of channels had a massive effect on revenues.
He cited how 75% of the company’s online sales had originally come from those areas where it had no stores, but that this had changed to a current 25%. The rest being from areas where it has a physical store. This just goes to show how significantly beneficial it can be to operate multi-channel as it is blatantly obvious that shoppers have a preference for engaging with retailers across more than one channel.
These multi-channel shoppers are also vastly more profitable. At Bloomingdales, Gould suggested they are 2.8 times more valuable than a customer that only goes into the company’s physical stores.
Such is the growing power of multi-channel retailing that another speaker at the Congress Tony Stockil, chief executive of Javelin Group, believes it is now a “strategic issue” for retailers to go down this route. The differential between those that are creating a multi-channel proposition and those that are still sitting on the fence is developing into a very polarised situation of the clear winners and the clear losers.