There has been a lot written recently about cross-channel retail in terms of the value to the retailer and importance to consumers. Aside from survey results, few hard facts have been published. Possibly this is because it’s hard to gather data and measure it, let alone do this for multiple retailers to make an apples to apples comparison. Even the definition is not immediately obvious to many industry folks, some often think of cross-channel as being synonymous with the term “multi-channel” but it is far more involved than simply having multiple channels.
The idea behind cross-channel retail is that a consumer should have a consistent experience with a retailer across all channels made available by the retailer. That means having the same marketing message, pricing and customer service everywhere – in store, print, mobile, email, online, catalog or call center.
Sounds complicated? Expensive? Hard to quantify? Yes, yes and yes. But what’s really going on at the customer level? Is anyone succeeding?
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At Compete we have lots and lots of online behavioral data on US consumers. So I started my quest by looking at a few of the top brick and mortar retailers to understand what this group was doing from an online commerce perspective:
After marveling at JC Penney’s industry leading conversion rate, I then looked at the sites and their functionality specifically related to anything that would drive cross channel behavior. After a few passes through the shopping funnel I found some significant differences. Best Buy and Sears lead the pack with buy on-line, pick-up in store options with an order typically available in store within an hour. Walmart has been pushing “Site-to-Store,” which provides free shipping to a store or a fee based membership program with faster shipping than the standard option. JC Penney’s is fourth with a ship to store option that saves you a “whopping $3-4” on average compared to shipping to your home (does that even cover the gas?) as well as a limited store inventory look up. And then there’s Target: no functionality that drives customers to the store but at least they have some free shipping options. Nice for conversion, but nothing that impacts cross-channel behavior.
So then the big question remaining is how are the significant cross-channel retail initiatives performing at Best Buy, Sears and Walmart? Do customers care? Do they use it? I then looked at all online orders in June to see what’s going on from a consumer perspective.
For these three leading retailers, this translates to a lot more foot traffic in-store and likely a lower cart abandoned rate. While I’m not quantifying ROI here, it seems to me that from what customers are actually doing with cross-channel retail (from the buy online, pick-up in store perspective), it is very much in demand and gives customers a service they obviously want and use today. In today’s climate, that’s an investment that’s hard not to make. The question now is no longer should a retailer do cross-channel integration on their site, but rather how best can a they optimize these activities based on their business model, customer base and assortment.
Matt brings over 10 years of experience in business development and multi-channel experience to Compete. As Director in Compete’s Retail and Consumer Products Practice, he focuses on helping Fortune 500 retailers achieve their online marketing and ecommerce objectives. Matt has held executive positions for various BtoB companies bringing innovative products and services to the retail and telecom industries, including GetConnected and HiWired. He was also a founding team member of a reverse logistics BtoC company, gazelle.com. Matt holds a BS from Cornell University in Business Management and Marketing.
