What you need to know about multi-channel shoppers

Multi-channel shoppers are fast becoming all shoppers.

As buying online becomes a mainstream activity amongst internet users (currently at 78.5% in the US - see eMarketer) and as the world of 'internet users' gets closer to 'everybody' (85% of UK adults earning more than £20,800 accessed the internet in the 3 months preceeding April 2006 - see ONS, and 79% of all connections are broadband - see ONS), multi-channel shoppers are increasingly the same group as shoppers.

The ONS reports that the most frequent online activity is 'searching for information about goods and services' - carried out by 84% of adult internet users. Yet only 44% of adults had bought online in the 3 months preceeding the April 2006 survey.

This shows (if you didn't know already) that there is an immense amount of online shopping research going on though much of it results in real world buying.

What does this mean? Success in retail will depend on creating informative and up-to-date websites to empower consumers to get the answers they want. All of them!

Finally - a measurement scanner to ensure clothes that fit!

The science fiction fantasy of a machine that takes your measurements has arrived in the form of Intellifit. So far there are only 13 such machines (Most in the US, but there is one in the Regent Street Levis store). The machines take 200,000 measurements from your fully clothed body in about ten seconds.

The company charges nothing as it collects a commission from the retailers (so far only 8, all US brands) it suggests you use.

This sounds like a very interesting device though limited in usefulness until more brands have bought into the system. One to watch.

Who else wants lower returns for clothes?

Newly launched MyShape.com claims to have half the return rate of the average fashion retailer. The secret? Only showing clothes that both fit AND suit your body shape. The site asks women for their measurements and style preferences. This allows MyShape to present clothes chosen specifically for a shopper's shape, size and lifestyle.

Getting sizing right is rare. My wife found the Boden website very hard going when searching for sale items because she had to open every product page to see if her size was still in stock. In the end she just gave up. A 'filter by size' function would have made her experience much better.

Traditional mail order is dying. Long live mail delivered retail!

Verdicts' latest report about the UK mail order business shows that traditional mail order is fading away. The 'Big Books' such as Shop Direct, Littlewoods, Otto, Freemans, Grattan and Redcats relied on local agents and an ability to offer credit. Now that credit is freely available to all and with the rise of discount retailers on the high street, this once dominant sector of the mail order market seems to have few prospects.

And yet more and more customers are buying remotely and getting products delivered.

I've always maintained that the most interesting figure to examine would be the split between delivered retail sales versus sales of goods collected from a store. Sadly no-one seems to be capturing or estimating this. I'm confident that if the delivered/collected percentage was calculated over the last decade it would show that although mail order is in steep decline, mail delivered retail (which would cover ecommerce, TV shopping and catalogue sales as well as multi-channel sales from high street brands) is rising.

Verdict - over to you!

IKEA ecommerce rockets towards the top

Despite launching a pilot scheme with no fanfare and restricted to the East Midlands & Cambridgeshire, IKEA's ecommerce website has crashed into the UK's top 50 ecommerce websites at number 49, as measured by Hitwise. Given that about half of the entries are for travel or ticket sellers this is more like becoming the 25th biggest etailer in the UK.

This goes to show that the latent demand for ecommerce from well known retail brands is huge & that the etail laggards are leaving substantial sums on the table by refusing to play.

Online shopping research gaining ground

Research into the shopping habits of US broadbanders shows that the internet is now the primary source of shopping research. The study showed that 50% were influenced by the internet in a recent purchase. Other sources of shopping influence were: ecommerce websites - 36%; search engines - 15%; TV ads - 11%; user-generated content (reviews, blogs etc) - 9%; print ads - 6%.

What does this mean for retailers? Don't judge your website by online sales alone. Find ways to measure the pounds and pence effect of your website on your high street sales.

Borders video: brand building or cash wasting?

US bookstore giant Borders - which has outsourced ecommerce to Amazon - is none-the-less using the internet for marketing. Following hot on the heels of Borders Book Club videos, the company has launched 'Borders Live at 01' (warning: link will start a video with sound), a series of videos taken at the original Borders store in Ann Arbor Michigan. On a decent broadband connection the quality is far superior to YouTube, though viewers will need the latest version of Flash.

This type of retailer produced event could be the future of brand building. In a multi-channel world where consumers are looking for authenticity, relevent videos could serve to both draw in suitable prospects and demonstrate the retailer's credentials.

The questions are:
* Will people shift from TV to watch specialised content like this?
* Will enough of them go on to visit the retailer's website or physical store?

Until Borders reports on the success or otherwise of this experiment we won't know the answers. But any forward looking retailer should be thinking about what sort of content would be suitable to help create and sustain their chosen brand values. And any product creator (think author, designer, factory) needs to think about their role in creating content that can be used by retailers.

What everybody ought to know about vouchers

One of my colleagues emailed me yesterday with details of a £5 off voucher from Habitat - from the Barbican Art Gallery website - that appears to be intended just for Barbican members. But although the voucher page can't be found by searching on the site, it isn't password protected so the page can (and clearly has been) emailed to all and sundry.

No word yet on when this voucher was posted or whether its 'escape' to the wider world of non-Barbican members has led to increased sales at Habitat.

This reminds me of the Threshers voucher intended for suppliers that was distributed virally to millions of consumers in December last year. But there are significant differences - Habitat's is only for £5, & 40% off booze is much more appealing than £5 off homewares!(NB: The Threshers deal isn't as generous as it appears because they have a long running '3 for 2' offer that is effectively a 33.33% discount.)

But both vouchers have found themselves emailed to people not (officially) intended to get the offers. So the action point is: ensure that if a voucher 'goes viral' you'll make money. Simple, really.

Dixons' boss: ecommerce heading for 20% of UK retail sales

Hot on the heels of the Toys 'R' Us CEO's prediction that ecommerce growth will level off when it represents 10% of total retail is much more bullish statement from John Clare, the CEO of DSGi (a group which includes Dixons and Currys). They already get 12% of turnover online and expect this to rise to at least 20%.

The percentage of goods sold online varies by product category; both electrical goods and electronics are categories with fierce price competition and strong manufacturer brands so in some ways it is not surprising that DSGi is getting far more online sales than Toys 'R' Us.

Toys 'R' Us boss: ecommerce to rise to 10% of retail

At the recent ETails 2007 conference and exhibition, Jerry Storch (the CEO of Toys 'R' Us) predicted that ecommerce would top out at 10% of retail spend. His argument seems to be based on the idea that the cost of driving to a store is much less than the cost of shipping items to homes.

But this is only true if customers place a minimal value on their own time. It is hard to spend less than 15 minutes in a shop and if the trip entails driving, parking and then searching within the store it can easily stretch to 45 minutes. Even at the minimum wage of £5.35 per hour, 45 minutes is 'worth' £4 - a figure that is close to a typical P&P charge. Add in more time, petrol and parking (not to mention other car costs) and costs can easily exceed P&P.

If the item you want is out of stock then you either have to come back or find it somewhere else, adding even more time to the transaction. Buying online can also remove risks from the process - research is easier and you are much more likely to find your item in stock.

So perhaps ecommerce will go well beyond 10%.

US survey: bad websites drag down high street stores

A recent email survey of 638 US online shoppers found that 41% said yes to the question "When you have a frustrating shopping experience online, does it make you less likely to shop at that retailer's physical store (if they have one)?"

This is markedly up from the 29% with the same answer last year. The increase in respondents saying that a bad site negatively affects their opinion of the brand was up from 55% to 59% and the number claiming that a bad site means they're less likley to return to the site stayed level at 82%.

So it seems that - as one would expect - bad sites don't just waste money and leave money on the table. A "frustrating shopping experience" also makes it less likely that a shopper will visit a brand's high street stores. Given that online shoppers are getting more demanding and expecting ever more complex functions on ecommerce websites, it is clear that high street retailers need to work hard just to stand still.

Profit by segmenting web-acquired customers

A US commentator writes that it pays to segment web-acquired customers before treating them like more traditionally acquired mail order customers.

Although the average web-acquired customer has low average order values and a low lifetime value, the figures vary significantly depending on the exact source: search, affiliate link or whatever.

Action: segment like crazy and make sure that your data file contains multiple flags to keep track of where your web-acquired customers come from and what they were doing on-line. Once you have identified the lifetime values for your web-acquired segments, factor that in to your online marketing decisions.

More evidence that customer reviews are good

Building on the experience shared by BazaarVoice in September last year, Forrester Research has just revealed the results of an analysis of 4,000 customer reviews on Amazon. 80% of the reviews were positive, and the negatove reviews were almost all rated as "useful" by other shoppers.

I love reviews and wish I could persuade more of our clients to offer them!

Jupiter predicts online's share of retail in 2011: 10-15%

Jupiter Research has published a report "US Online Retail Forecast, 2006 to 2011" . I haven't paid $1,500 to get it, but apparently Jupiter is forecasting a number of interesting figures:

* Online's share of total US retail in 2011 - 10-15%
* Percentage of offline sales influenced by online research in 2011 - 40%

Jupiter claim that most future growth in online sales will be from existing buyers spending more online, and not from new online buyers.

My view of this?: The 10-15% is an average, of course, so some product categories will have the majority of products sold online. If you're a merchant you need to assess what percentage of YOUR market will be online and act accordingly.

Christmas figures reveal importance of ecommerce

The figures are mostly in and it is clear that the rise of ecommerce in December 2006 was even greater than most commentators expected.

The John Lewis Partnership saw online sales rise by a staggering 88.5%, which compares very favourably with the national retail growth by value of 4.7%. Average ecommerce growth figures for December 2006 vs December 2005 seem to vary between 50% and 30%, but both are pretty impressive numbers.

More significant is the fact that almost all of the retailers in trouble - Woolworths being a good example - don't have a working internet strategy.

Despite the relatively small proportion of total sales that ecommerce represents, it is clear that all retailers need to have an integrated multi-channel approach if they wish to succeed.

M&S trip proves value of ecommerce

I visited 2 different M&S stores recently - one of them twice - looking for a known garment in a certain size and colour. It seemed like a good idea at the time. I was passing the stores in question & just nipping in appeared to be an easy option.

I didn't get what I was looking for, but I did learn a lesson. The customer service at the stores depended heavily on the assistant I happened to talk to. One was very helpful, one tried to be helpful and one was simply not interested.

In the end, going to the website provided me with the item I wanted, as well as a smooth buying experience untainted by the variability of shop assistants' moods.

This story highlights why even a ubiquitous retailer like M&S needs an ecommerce website - until every store carries every item in every colour and size variation, customers have to gamble that what they want is in stock. Going online has a much higher chance of finding what you want without wasting time.

US surveys: people like commercial emails & free shipping offers

A recent US survey asked 2,541 online adults various questions about commercial emails. Amongst other findings, three-quarters found emails from frequently used companies to be 'valuable or very valuable' and 30% had bought something after getting a promotional email.

A second US survey found that free shipping is the most preferred type of offer, and that more customers claim to prefer a percentage off to an amount off.

These customer-reported figures match the experiences of our clients, who are still finding promotional emails to be a very profitable source of business.

US catalogue industry: 44% of direct sales via web in 2006

According to the 2006 Multichannel Marketing in the Catalog Industry Report by the US Direct Marketing Association, US catalogue merchants expect to get 44% of their 2006 direct sales via the web, up from 39% in 2005 and 38% in 2004.

But don't think that this means that print is dead - far from it! The same report shows that although respondents estimated that 40% of web sales were incremental, 74% of respondents considered their catalogue to be the primary sales vehicle.

As Digivate has consistently argued for the last 10 years, all channels have role to play. The trick is to focus each channel on what it does best, and to consider each new channel's strengths and weaknesses before deciding how to exploit it.

Bad websites could make you ill

A recent survey by The Social Issues Research Centre found that most test subjects forced to interact with abysmal websites displayed symptoms that could lead to stress related conditions.

“Some changes in muscle tension were quite dramatic…While this was happening, the participant's faces also tensed visibly, with the teeth clenched together and the muscles around the mouth becoming taught. These are physically uncomfortable situations that reduce concentration and increase feelings of anger”

So a good website isn't just good for the merchant's financial health - it is also good for the health of the customers!

Online shoppers driven by convenience more than price

A new report by Questus shows that just over three-quarters of the 575 US shoppers surveyed said they shop online to save time, two-thirds cited the ability to shop 24/7, and three-fifths liked the lack of crowds. Just under half said they shopped online to save money.

All this shows that it is convenience not price that is the main driver of online shopping, despite the two-thirds saying that better prices would increase their likelihood of buying online.

Underscoring this conclusion are the figures for various changes that respondents said would increase their propensity for buying online:
38% - better product descriptions,
35% - better pictures,
35% - no registration,
31% - easier navigation, easier checkout and better return policies,
25% - reviews and customer ratings.

Action: All the items on this wish list are within your reach. They don't even require much investment, just some attention.