Multi-channel retail is becoming an increasingly complex world.
Maximising returns by establishing the right channel mix for customer acquisition, sales transaction and re-marketing should be a key priority for all multi-channel retailers.
Broadly speaking you should consider the following channels:
ACQUISITION
Acquisition channels should be focused on getting your brand in front of customers that are not aware of your brand or may not consider your brand for the category you are targeting. An optimised acquisition channel should deliver qualified traffic to your store and website that converts into sales and database growth.
Organic and paid search
We all know that being found on search engines is key. If you look at the stats of the top 500 multi-channel retailers published by internet retailer you will see that 25 to 45 per cent of their online traffic is delivered by search. This includes both paid and organic search for branded and generic terms. Branded search is not technically customer acquisition as they are already familiar with your brand but coming up number one for "dresses" will win you new customers both online and in-store.
Affiliate networks
Affiliate networks place banner advertisements of your brand on relevant third party sites such as fashion blogs and track any traffic and sales generated by these advertisements. The publishers are then paid a commission of around 10 per cent of the sales generated from their sites. This has long been an effective sales method – it’s been quoted that major players like Asos get up to a quarter of their traffic from this source.
Aggregators
Aggregators are the online equivalent of "place" in the four P's of marketing. Listing your products on an aggregator website, an existing marketplace that has existing relevant traffic (i.e. people looking for fashion) is no different to opening a store in a well trafficked shopping centre. In Australia there are various aggregators including ShopStyle, the eBay fashion hub, Westfield online and a number of price comparison search engines. Most of these channels use a pay per click or commission based business model so they provide a good performance based marketing option.
Traditional Media
Print, TV, radio and outdoor still play a major role in terms of acquisition channels. While pure play online retailers might find it hard to generate a solid ROI from such activities, multi-channel operators can benefit from a geographic and demographic targeted campaign that drives consumers into a network of stores and online.
SALES TRANSACTIONS
Once a consumer has been acquired i.e. walked into a store or visited the website, we must then provide a seamless customer experience to convert the opportunity. Integration between the channels here has been linked to higher conversion rates and higher customer spend, allowing consumers to research your offering and then act on that across channels and extending your reach.
Online
Consistency is important in multi-channel retail. You should aim to offer identical ranges, pricing and promotions online and in-store. Currently we see the average multi-channel fashion retailer do three to five per cent of their sales online however that is growing quickly and in the US some retailers are doing 15 to 20 per cent.
Mobile
The wide adoption of smart phones has created a significant increase of mobile traffic and commerce. Consumers are no longer simply using their phone to look at store locations; they use these devices to transact. Some retailers do up to 15 per cent of online revenue via mobile devices and this will only grow. Mobile devices also provide an effective platform for loyalty programs and promotions, which can be used to drive activity across channels.
In-Store
Retailers with existing store networks should think about how they best leverage that asset. Click and collect models have been widely successful overseas for groups like Aurora. Using stores as a product discovery centre with purchases being delivered is also a concept that has proven to be successful overseas with some retailers in Japan home delivering the majority of in-store purchases. Centralising a larger proportion of stock would be an attractive proposition for most retailers from a margin perspective.
RE-MARKETING
Now that you have spent time and money acquiring and converting the customers you should carefully think about how to retain them.
Targeted and personalised email marketing remains the highest ROI re-marking tool for most fashion retailers. The key here is targeting and personalisation. While non-targeted campaigns will usually yield open rates of 10 to 25 per cent, targeted campaigns with a one-to-one communication approach can lead to open rates of 50 per cent and above. Retailers should leverage all their channels including their store network to build the customer database and record as much behavioural data as possible to enable proper targeting.
Social
Facebook and twitter can be used for information distribution and consumer engagement. Engagement is key to getting results and retailers must determine what kind of content will engage their customers and prompt them to discuss and share this content so that the message amplifies across their networks. We have found that social channels can drive sales but not as aggressively as email.
Justus Wilde is the online strategy director at Amblique, a company that specialises in digital strategy and multi-channel commerce solutions. www.amblique.com