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Why Morrisons' losses demonstrate that multichannel is make or break

14th Apr 2014
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Multichannel remains a hot topic for retailers, but despite the progress made in recent years, the sector still has some way to go before consumers’ expectations are met. We only have to look at the Morrisons’ reported losses recently to see how digital has a large role to play in keeping one step ahead of competitors. Discussing why a multichannel offering can make-or-break a brand is fine, but the real question retailers need to be answering is how to meet the needs of today’s digital-savvy customers. It has taken Morrison’s ten years to embrace an online offering and home delivery – two essential components of the multichannel experience – and now it has to play an unenviable game of catch-up.

But it’s not just Morrisons which is falling foul of meeting the “always on” consumer; some of our own independent research has highlighted some quite shocking results in how little retailers have come in moving towards the digital age. We found that 85% of UK consumers could not name a high street retailer with a great multichannel experience Despite the shift in the way people shop, an audit of 100 UK retailers (across cafes/restaurants, clothing, supermarkets, electronics, etc) we commissioned indicates that stores are not changing to meet customers’ new shopping habits.

While nearly half of consumers want shops to offer further information about products in-store through barcode scanning and displays of customer reviews next to products, only 4% of retailers surveyed provide access to customer reviews in-store through mobile phones. The BIO Agency found that 41% of people want retailers to provide home delivery and to be able to pay through their mobile, but only 12% of retailers currently have mobile checkouts. We also found that customers are open to stores offering Minority Report style recognition, with one in six shoppers wanting facial recognition in-store. But on the other side of this, only 32% of retailers offer geo-targeted offers through mobile while a third offer in-store price promotions through mobile.

Blending online and offline

It is clear from customers’ movements that brands need to ensure a strong blend  of online and offline channel strategies to deliver a seamlessly integrated, “omnichannel” retail experience with shared inventories, stronger customer service tools and more immersive brand touchpoints. That’s not to say that some brands aren’t doing this well. Recently Chanel kaiser Karl Lagerfeld opened his flagship store on Regent Street, which is kitted out with internet-connected iPads embedded into the changing room walls. These built-in touchscreens allow shoppers to photograph their looks and apply various Karl-inspired filters to their photos before sharing the images via Facebook, Twitter and email. There's also iPad minis integrated into display racks, enabling visitors to explore the entire collection online.

Nordstrom uses mobile POS devices in its stores to enable staff to check out customers anywhere in its stores, and cut the queues down. The New Balance iPad app is designed to help customers and sales assistants in store, allowing them to access the product catalogue, check stock, and help with sizing issues. 

At Tesco they have trialled touchscreen kiosks in several stores that allow for stock checking and ordering. The retailer has also used interactive mirrors which allow users to try clothes on 'virtually' using a gesture based interface. House of Fraser has been doing some exciting stuff of late, by launching the House of stores in smaller retail units to support its Buy and Collect service. The stores, similar in concept to John Lewis' 'At Home' outlets, uses touch screens and kiosks to allow customers to order for delivery to shop or home. These stores allow House of Fraser to provide access to its whole product range without the need for the shopfloor space of its usual stores.

But these are a handful of retailers, what about the 100 retailers we audited across the country? Despite a flurry of new hires to bring the digital experience to the forefront of marketing activity, it appears consumers are still waiting for that truly connected shopping experience. This year, digital should become less siloed to the marketing department; it needs to be at the heart of the business and that means employing this expertise at leadership level.

Digital roles are beginning to come out of the shadows. Digital boss at M&S, Laura Wade-Gery, argued recently that without champions for digital investment at the highest level, the boardrooms of multichannel retailers may not be “sufficiently digitally literate”. Argos’ recent appointment of former Amazon exec Bertrand Bodson as digital director highlights the move to help steer the retailer’s bid to be a digital-led retailer. The roles of the CIO and CTO in unison, or indeed the digital savvy COO, will become increasingly valuable to businesses, in leading digital developments. As these new infrastructures become more widely embedded within the leadership, we’ll see true changes to businesses outside and in, that truly reflect digital change of the future.

Digital cannot be ignored. And building an app and a website is simply not cracking the need for digital to be at the heart of the retailer’s core. The future of technology and digital is already running away from most retailers. It’s time to take digital change seriously.

Peter Veash is CEO of The BIO Agency.

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