Editorial / Multichannel

Go or Don’t Go Multichannel? Go!

Multichannel retail

Is multichannel the right path for retailers? You bet it is. It’s not a case of if, but when. Grant Arnott urges retailers enduring a tough climate to avoid unproven business models and adhere to proven, solid strategies.

I read a puzzling thought piece on another media outlet’s site recently written by retail consultant Stuart Bennie. The title ‘Multichannel may not win online war’ piqued my interest and I wanted to see what solutions were offered.

In the article, Mr Bennie describes the debate surrounding GST on imports earlier in the year as hysteria, and cites his extensive research in googling the term ‘online sales threat’ as evidence of the looming catastrophe for retailers. He then suggests that the term ‘multichannel’ is being bandied about as part of the solution, whereas, he says, the exact opposite may be the solution.

The recommendations are:

Don’t go multichannel, create your own competition

Tag on slightly different styles compared to those being bought for the physical stores to avoid direct comparisons

Get innovative with online promotions and online marketing – don’t be ashamed of selling at lower prices online

With all due respect, this flies in the face of every piece of evidence in the US and UK showing that multichannel retailers who have invested in delivering a true multichannel offering are building substantial growth. I really feel Mr Bennie should take a walk outside the office and look at the bigger picture worldwide, where the bulk of the top online retailers in the US are multichannel retailers leveraging their legacy brands across in-store, catalogues, online, and mobile. The vast majority of the top 20 online retailers in the US are multichannel – institutional brands like Sears, Office Depot, Macy’s and Staples.

In my opinion, retailers who take this advice are setting themselves up to fail. Unless I’m misinterpreting, the strategy is to:

1. Cast off all the hard-earned value built up by the legacy brand and the comfort that customers associate with that.

2. Dive into rough seas dominated by digital entrepreneurs far more savvy online than you are, and set up an entirely different business to what you’re best at

3. Buy, stock and market a range of different products to the traditional stores purely to avoid those pesky price comparisons.

I may be a nimrod, but heading down this path sounds like commercial suicide to me. Mr Bennie’s article is entirely theoretical and doesn’t cite an example of where this has worked – I’m pretty sure it hasn’t, anywhere, ever.

If price comparisons are that much of a problem, there are far bigger issues with your business than any ill-conceived foray into online will ever solve. The problem with most retailers is they are still addressing the basics of the online customer experience, and getting the fundamentals right has been critical to the success of all multichannel retailers. Multichannel isn’t easy but it’s not complicated either, and it’s also not an option – multichannel is a must if you want to survive in retail. Established retailers have a host of competitive advantages online retailers don’t – store networks for cross-channel shopping, brand value, scale with suppliers, and so on. Marry that with a compelling online/mobile offering and the results will be incredible. Ask Walgreens, John Lewis, JC Penney or countless others outside this country who have happily and successfully embraced multichannel.

Never forget that customers don’t talk in channels, but they do expect their retail brands can deliver the integrated shopping experience many have come to expect. And I cannot ever see it regressing – multichannel is absolutely the way of the future, and I urge retailers not to be distracted by untested, unproven models when there are sure bets sitting well within reach.

What are your thoughts?

Grant Arnott

Article by

Grant Arnott is publisher of Power Retail. Other hats include Co-Founder of Click Frenzy, Global Head of The Media Pad, and adoptive father of a fast-growing Golden Retriever. Grant has a specialist business publishing background spanning more than a decade, and contributes regularly to a multitude of print and digital business media. Follow Grant on Twitter and Google+ or connect with him through LinkedIn

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