The Future's Bright; The Future's Foreign?

Levy and Weitz (2004) define a multichannel retailer as: retailers that “sell merchandise or services through more than one channel” and in today’s society, where technology is constantly evolving, and online shopping is becoming increasingly popular and exciting, retailers have no choice but to embrace this strategy. The main reason for this is: profit. Put simply; the more channels a retailer has, the more consumers that retailer can target and the higher volume of sales it can achieve. While stores have restricted opening hours and may not be easily accessible for all consumers, the online site is a 24/7 shop. This must therefore be updated very regularly and must now start to provide the social elements that physical stores possess, such as sales assistants. Competition is also intensifying as consumers expect almost instant results and updates online. Retailers need to keep innovating and thinking of new ideas/ new applications in order to be seen as the best and most fashionable brand on the market. Consumers will constantly compare brands, meaning retailer’s need to have the most creative and engaging website, as well as the most unique ideas to promote and improve the customer’s experience. Furthermore, retailer’s social media activities must respond to consumer needs and queries in order to retain loyalty and provide an innovative platform in which consumers are able to express their views.

Yet the two biggest issues that retailers must tackle, and tackle well, in order to succeed, are:  

1.    Technology

Retailers need to keep up-to-date with the rapidly innovating technology of today. Smart phones are the latest “big thing” and boy have they taken off! Some fashion retailers have been quick to recognise this. For example, Topshop have created their own mobile App for iphones, in order to enable consumers to get their “fashion fix on the go”.

They update it five days a week, with over 300 new products- this is a phenomenal amount! Their main selling point is that consumers will always know what’s “new in” and can “save, send and share all their favourite looks”. Moreover, the app allows people to find their nearest Topshop store, wherever they are, which is a brilliant idea for when people are visiting new cities. This is a fantastic concept, and one that all fashion retailers should take heed of in order to engage further with their customers. However, the app must be consistent with the brand image to work as a marketing tool.

2.    Globalisation.

With the rise of the global economy, retailers are now under increasing pressure to expand into global markets. However, they need to have a researched strategy to do this. For instance, Marks and Spencers attempted to expand internationally in 1990, but by 2001 they had closed or sold all their 38 stores across France, Germany, Spain, Belgium, Luxembourg, the Netherlands and Portugal (The Guardian, October 2010). The Guardian reported on M&S’s failure:

“The shops traded well during the first two decades, but by 2000 the European division was making losses and the struggling retailer took an abrupt decision to close it down to focus on restoring its fortunes in the UK. It caused outrage in France and other countries as 3,350 M&S workers lost their jobs. The strength of the pound at the time, coupled with fierce competition from "upstart" clothing chains like H&M, contributed to the end of M&S's European dream”. (The Guardian, October 2010).

Similarly, the Telegraph commented on M&S’s failure to break into the Spanish market: “It failed largely because middle-class Spaniards did not warm to the brand, and because it was competing directly with El Corte Ingles, the country’s largest retailer, which had considerable brand loyalty and also targeted the expatriate market” (The Telegraph, November 2010).

It is clear from these reports that M&S did not do its research on the countries it expanded to and just presumed that its success in the UK would translate to success overseas. Clearly it is not that simple. However, after nearly ten years of closing all its international stores, Marks and Spencers is once more attempting to breech this international market. Have they learnt their lesson? It appears so. The retailer is approaching markets cautiously and, instead of targeting major cities like last time, it has concentrated on more low key locations, such as Marbella, which has a high proportion of Britons living there (The Telegraph, November 2010).   

The same can be said when looking to create international websites. Each country is different and so retailers that want success in international markets should cater for these countries on the web. Asos have done this successfully, as they gave free delivery in France on Bastille Day, which is a national holiday, therefore not only encouraging sales but also building trust in the brand by showing that they have done their research (Drapers, November 2010).

Delivery is still an issue when targeting overseas customers, as the costs are often high. For example, New Look deliver to over 120 countries. For the UK it is £3.95 for standard 2-3 days delivery, or next day delivery is £4.95-£6.95, Europe is £5.50 and Africa is £10. Considering New Look’s items are relatively cheap- the average price is probably about £15- then these delivery charges work out to be quite a high percentage of the overall cost. This therefore defeats the point of New Look’s appeal- people want nice fashionable items for less, but aren’t really paying less when the delivery charge is added. Thus, retailers will have to tackle this issue in the future. They are already combating it in ways such as “Free delivery” periods, for example, this week Amazon are delivering free to Spain if you spend over £25 (delivery is normally around £8). However, a more long-term strategy is needed, for instance, retailers could give consumers the choice: they could have their item the next day for £6, have standard 2-3 day delivery for £3-4, or wait a week or longer for free delivery. That way consumers will be able to pick their preference- if they need the outfit for a party the next day then they will pay for that, but if they have just bought something they like for everyday use they may not mind waiting in order to pay less.

Ultimately, consistency is the key to success for multi-channel retailers. Consistency in brand image is essential for identifying with their target market in order to create brand loyalty and therefore increase sales. Consistency in pricing across all channels is also important, as consumers will become confused as to whether they are getting the best deal when shopping, and annoyed if they buy something in-store and come home to see it cheaper online. The retailer has to be consistent to build trust with the customer, therefore channels need to compliment each other; retailers are facing enough competition without having to compete internally.

Retailers must offer a wide choice in their future campaigns, catering for the individual will become more and more important as shopping online becomes more interactive and more experienced-based. After all, consumers are not all the same. How do people want to shop? Retailers must offer a wider selection of options in order to cater for everyone, such as music, videos and different product viewing options- all of which can be selected to preference.

Hence, multi-channel retailers will succeed in this current demanding market, but only if all the channels are integrated well, offering a consistent, pleasurable and engaging experience for consumers.