Friday 15th Dec 2017 - Logistics Manager

The multi-channel challenge

People want the product, as a low price, but they really don’t want the hassle. But what does it take to provide convenience and control in a multi-channel environment?

When multi-channel retailing first became a reality, many companies saw this as a way of gaining new customers or keeping their existing customers by adding an online service. Almost all of these early services were set up as entirely separate solutions away from the traditional bricks and mortar retailing. Some retailers started using retail stores to pick internet orders, but the majority of these failed to delight their customers.

In trialing in this way, retailers failed to grasp the fact that the customer experience is far more than just paying the cost and having the product. There is a whole customer experience ‘package’ which involves how the product information is presented, how products are purchased (the promise), and even more importantly how customers acquire the product itself, either through collection or delivery. And increasingly, this total end to end continuum is more reliant on convenience and allowing the customer to feel in control of their purchase experience.

People want the product (at a low price), but they really don’t want the hassle. More and more, consumers want the product on their terms. They want it delivered to their home or work when they are there, or to pick it up at a convenient location and time. The winners are organisations who can deliver this whole convenience package as a standard service.

Prediction

There is so much research and prediction about the growth and rosy future for online business that we can take this as given, and multi channel is an increasingly important part of this retail landscape. Yet focusing on these headline figures alone misses the driving force towards multi channel convenience. Some research is rather more revealing, including a hint at the potential pitfalls waiting to trap the unwary e-tailer.

The general assumption that the ability to buy things at the lowest available price is one of the key drivers behind internet shopping and is fuelled by search engines and the many price comparison sites such as pricegrabber and moneysupermarket. However recent Verdict research has shown clearly that this is the number two attraction of internet shopping rather than the main driving force.

Convenience, it turns out, is what we really want; across a variety of sectors from grocery to clothing and DIY. An initial view of the figures shows that just over half of us think the convenience of internet shopping is important. However when you also add in ‘saves time’ and ‘shop at any time’, both also measures of the convenience of the overall experience, the figure hits 79 per cent.

Convenience is also a significant potential differentiator, indeed Verdict research shows that ‘delivery when I want it’ is behind 10 per cent of shoppers choosing one site over another. As delivery time slots are offered by some internet retailers, more customers see it as possible and they demand it. Again, convenience wins.

Although 20 per cent of online shoppers claim their purchase would not have been made at all through another retail channel, with over a third of shoppers stating their online purchase was at the expense of a trip to the High Street and 14 per cent instead of a retail park, the convenience of ordering from home or office and delivery when wanted is evident.

Some retailers have been early adopters of a convenience approach to online retailing, and multi channel operations in general. Tesco and Woolworths, for example, developed sophisticated offerings where customers can order online or in store, then collect in store or have convenient home delivery. Argos with a ‘click and collect’ service to bring together online ordering and store pick up, added both convenience and gave control (options) to their customers. Customers are now in charge of the overall package and are enjoying the experience.

So the rise of convenience in this sector should not be a surprise. One of the main growth areas for retail, apart from the internet, is the convenience store; places which are easy for the customer to get to and open when they want. This also represents an opportunity to roll out the convenience of multi channel business with order or collection through such local outlets.

Lean business guru Professor Dan Jones of the Lean Enterprise Academy states that ‘Lean is about developing new capabilities of serving customers in new ways…’ including multi channel and online retailing. The internet allows retailers to present clear product information and measure real demand for items, as well as showing the high level of substitutions made in store. Online business puts more pressure on retailers to actually deliver what the customer wants, as well as providing this where and when they want it.

Retail experts, the Javelin Group, suggest that we are in the grip of a new revolution, something that happens every 30 years. Following on from the ascendancy of out of town superstores, ‘multi channel, multi format multiples’ are going to take centre stage. And convenience of the whole customer experience is a driving force for this.

Expectations

Consumer expectations of convenience are increasing according to Nick Robertson, Chief Executive of successful online fashion retailer ASOS.com. Every year the bar is being raised. Customers expect more and get more and ASOS.com are looking at same day and hourly delivery slots. At the heart of this is service excellence and customer delight. According to Nick Robertson, logistics is fifty per cent of the picture for both control and convenience. If a customer places and order and doesn’t get it, that’s 100 per cent failure!

Just placing an order means that there is an expectation it will be delivered. In full, accurately and when we want it. Indeed we recognise that taking orders 24/7 is the easy task. Delivering orders in a totally convenient package is rather more difficult.

Integrated multi channel retailing, providing a wealth of information on innovative products and services to a variety of customers, adds to the supply chain complexity. It blurs the distinction between bulk product flows to stores and picking individual units to customer order. Some distribution centres, equipped with advanced systems and business processes are already capable of picking down to single products for multiple channel destinations. In our era of credit crunch, the successful multi channel businesses are looking for solutions that will drive down supply chain costs, giving service enhancements of both control and convenience.

People, processes and systems must work together to deliver a seamless service that supports an all round product proposition that customers desire. Fulfilment partners need to deliver solutions from existing (and flexible) infrastructure to gain an advantage in today’s fiercely competitive retail environment. As Robertson of ASOS puts it “being first in retail fashion is good, being first, fast and fantastic is a combination that delights our customers and makes them shop more regularly with more confidence”.