It is thus no small wonder that many traditional stores offer Internet kiosks to offer customers a wider and broader assortment of items than could possibly be effectively stored at the location. Genuine, integrated multichannel retailing will inevitably become the norm, so that if the customer does not see the desired appliance model (for example) on the shelves, the next step will simply be to use the kiosk to order it from the store's web site. And at the store's customer service desk, it will be possible to return items bought online as easily as if the customer had bought them off the shelves. In an evolution from the early Internet, where online retailer (e-tailer) pioneers were manually processing online orders (with many consequent fulfillment glitches), the fulfillment methods of today are based on a new generation of technology solutions, although these may leverage some of the ideas of traditional mail catalog order fulfillment.
Although better Web design and a wider selection of products offered online are important, the key to multichannel success lies in understanding the factors that drive revenues and the ability to fulfill Web orders. Overall revenues are driven not by simply offering products via online channels, but by creating a hybrid sales model that uses the Web and other (more traditional) channels (such as the phone, TV, and brick-and-mortar store) in a mutually beneficial way in order to maximize profit from these different retailing models. Except for a few groundbreaking companies, this is still uncharted territory, though the retailers who engage customers across many channels are likely earning their trust and more repeat business.
There have been examples of retail companies using a multichannel retailing system to streamline sales of an expensive consumer product, only to discover that Web sales were significantly lower than sales made over the phone. The reason was that sales consultants were able to up-sell consumers to higher-end systems over the phone. This forced these retailers to redesign their Web sites or storefronts to provide places for customers to interact with a sales consultant, in person. It will still take much time and effort for software developers to come up with applications that can completely emulate the human touch, through combining applications for searching and indexing, analytics, content management, and customer management, with a personalized and relevant shopping experience (for example, with easy product navigation, individualized promotion, self-service, and so on).
Retailers must start with an understanding of what generates the most revenue and profit across multiple channels—and e-tailing web sites must not be seen as totally independent of other channels, but quite to the contrary. Web storefront usability should be addressed first, but the focus on product information management (PIM)/global data synchronization (GDS) and cross-channel inventory visibility and fulfillment infrastructure should follow soon afterwards. It is certain that multichannel retailers will attract new business, on the condition that they continue with good delivery service, wide product and service selection, and reasonable price incentives. Unless, of course, rising gasoline prices significantly changes the profit-loss equations of global versus local sourcing and deliveries.
Although better Web design and a wider selection of products offered online are important, the key to multichannel success lies in understanding the factors that drive revenues and the ability to fulfill Web orders. Overall revenues are driven not by simply offering products via online channels, but by creating a hybrid sales model that uses the Web and other (more traditional) channels (such as the phone, TV, and brick-and-mortar store) in a mutually beneficial way in order to maximize profit from these different retailing models. Except for a few groundbreaking companies, this is still uncharted territory, though the retailers who engage customers across many channels are likely earning their trust and more repeat business.
There have been examples of retail companies using a multichannel retailing system to streamline sales of an expensive consumer product, only to discover that Web sales were significantly lower than sales made over the phone. The reason was that sales consultants were able to up-sell consumers to higher-end systems over the phone. This forced these retailers to redesign their Web sites or storefronts to provide places for customers to interact with a sales consultant, in person. It will still take much time and effort for software developers to come up with applications that can completely emulate the human touch, through combining applications for searching and indexing, analytics, content management, and customer management, with a personalized and relevant shopping experience (for example, with easy product navigation, individualized promotion, self-service, and so on).
Retailers must start with an understanding of what generates the most revenue and profit across multiple channels—and e-tailing web sites must not be seen as totally independent of other channels, but quite to the contrary. Web storefront usability should be addressed first, but the focus on product information management (PIM)/global data synchronization (GDS) and cross-channel inventory visibility and fulfillment infrastructure should follow soon afterwards. It is certain that multichannel retailers will attract new business, on the condition that they continue with good delivery service, wide product and service selection, and reasonable price incentives. Unless, of course, rising gasoline prices significantly changes the profit-loss equations of global versus local sourcing and deliveries.
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