Retailers Look To Online Channels

Retailers who are planning a multichannel marketing and sales strategy will have a leg up on the competition, according to several recent research reports. As shoppers continue to research and buy products online and via smartphone style devices, retailers will find it increasingly profitable to reach customers through non-traditional channels. During a period of slow growth and contraction in the general economy, electronic sales have continued to increase faster. In March, technology and market intelligence company, Forrester Research, predicted that online retail sales will grow to $250 billion by 2014, up from $173 billion in 2010. Moreover, ecommerce sales will represent eight percent of all retail sales in the United States by 2014, up from six percent in 2009, the report says.

In its recent, “Retail 2015 Forecast,” the Nielsen Company predicted that retail formats are converging, and ecommerce will be one of the big winners. According to the report, “by 2015, smartphones will be the primary enabler of consumer shopping engagements, and new technology innovations will generate additional opportunities for retailers and manufacturers.” Nielsen’s recommendations for retailers include: “Develop or buy online/digital/social marketing expertise; Plan for diminishing returns from traditional media; Think about future format planning for your next one to three generations of formats.”

In a retail study commissioned by package carrier, DHL, 69 percent of retailers said that it is very important or essential to operate in multiple channels. The report, “Multi-channel Matters,” said that nearly two thirds of those questioned expected to start or grow ecommerce sales via the Web over the next three years. And ten percent of retailers said they have plans to sell products via mobile apps and devices over the next three years.

But online commerce per se is just the tip of the iceberg. Shoppers are using the Internet to research and shop, but often go to traditional stores to buy. According to an eMarketer report released in May, “Retail E-Commerce Forecast: Cautious Optimism,” currently 86 percent of Internet users are online shoppers. “They browse, research and compare products on the Internet, but do not necessarily buy online,” according to the report. “As a result, though often ignored, store sales influenced by online research are three times higher than ecommerce sales.”

The take-away for independent retailers? Low cost Web initiatives, such as Facebook pages and product information websites, may be as important as sophisticated online shopping systems, but easier to set up and maintain. The important thing is to start to plan and execute an electronic strategy that goes beyond the store.

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