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Embracing the Shifting Challenges of Multichannel Retail

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The world of retail is changing fast as we have seen this month with the opening of a new flagship Marks & Spencer store in Ellesmere Port. The new store features online hubs, sales assistants with iPads, and free wifi throughout. These innovations allow the staff to offer better information to customers, customers can check price comparison sites using their phones as they shop, and they can also place orders in-store for delivery direct to the home.

It is a complete blend of the High Street store and online ecommerce, but this blended offer is not how we expected retail to turn out -- until recently. Go back just over a decade and ecommerce sites like Amazon were going to kill off their High Street competitors completely.

So what happened?

British law firm Thomas Eggar has just released a new research report titled 'Multichannel and the nimble retailer' that aims to explore many of these questions, by talking to the people who make all these decisions inside the retailers -- I had a look at the report on the day of publication.

Simon Russell, Director of Retail Operations Development at John Lewis, explains the changing view of the consumer: "Our expectation is very clear that customers now, and in future, will use multiple channels at every part of the customer journey. People used to talk about researching in one channel e.g. online and then buying in another e.g. a shop. But now people will use mobile, shops, and the net together at each part of the journey, i.e. researching."

This change is great news for the customer. More consumers have smart phones today so research and price comparison is not limited to the home - customers can be in one store comparing the price another is offering, but as customer use of technology has taken a quantum leap since the introduction of the first iPhone in 2007, some retailers are struggling to keep up.

But the customer doesn't usually care how the technology works, they just want to be treated well in-store and on the retailer's website. Bob Cell, CEO of MyBuys, believes that there are basics that should not be forgotten: "A consumer doesn't want to be treated well and then forgotten. Consumers want personalisation and they now expect it. For example, when you give a company your credit card, you usually want the company to remember that information so the next purchase is easier."

Not unusually, many stores present only edited highlights of everything the company offers - often with the in-store items being less price sensitive. Items that would only ever be compared on price, rather than service, are all available, but only on the website.

But how can the sales team benefit from sending customers to the website? If a customer values the help and advice of the in-store staff, how does that staff member get a bonus when the customer leaves the store and just places an order online? It's a tricky problem and nobody seems to have the answer -- yet.

Matt Stead, Multichannel Director at Pets at Home, has a simple solution that ensures his in-store team do earn bonuses for online sales. He applies the sales bonus for each online purchase to the nearest physical store, based on postcode, where Pets at Home colleagues share the bounty.

"Every single colleague has an opportunity for sales by postcode so that breaks down all the traditional barriers for promoting sales on the web. Our colleagues in-store are interested in helping people shop online because they can also earn from it, i.e. they are incentivised at store level, not on a personal basis.

And of course, the web is a useful tool. When we launched click and collect, people in the business could see web users spending more than twice as much as an in-store customer," Stead explains.

But one of the greatest changes in the retail environment today has emerged in literally the past couple of years -- the use of social media as a customer service and experience channel.

Jamie McRonald, Online and Web Manager at Pret a Manger, believes that the changes needed are greater than just an improvement in marketing, this intimate communication channel with customers is now influencing high-level decisions.

"Customers now have as big an influence on business decisions as the executives. For many senior executives in business today it can be hard to accept that the customers are as important in setting strategy as they are. The nature in which customers give feedback today is so open and transparent, it cannot be ignored," he said.

In summary, multichannel retail is a beast with many heads. Retailers are finding social media a useful way to build communities of fans and to encourage genuine engagement with their customers. Customers are also becoming familiar with price comparison and services such as click and collect and major retailers are offering a blended multichannel offer that helps to boost their brand value - especially where the products are easily compared and ordered online.

Retailers need to offer more than price alone to thrive in an environment where every consumer has all the information, recommendations, and reviews they can handle.