Member Article

Graham Soult’s e-commerce view

Read the retail press or peruse the agenda of the Internet Retailing 2011 conference, and you’ll soon come across the buzzword ‘multichannel’.

Back in the early days, online shopping was all about ‘pure-play’ retailers, with stores such as Amazon operating exclusively via the Internet. Over time, these specialists have been joined by established names like Tesco, M&S and Argos, and today there are few major high-street retailers that don’t also sell online.

It is this ‘bricks and clicks’ strategy – embracing physical stores, online and, increasingly, mobile technologies – that the term ‘multichannel’ describes. Within this phenomenon, one of the most fascinating aspects is the idea that online and high-street retail can drive traffic to one another, rather than being in competition as is often assumed.

One big area of multichannel growth is click-and-collect, where customers order online but pick up their shopping from a physical collection point – often, but not necessarily, a retailer’s existing physical store.

For example, high-street fashion retailer New Look – which has more than 20 shops in our region – is set to launch a click-and-collect service in all its 600 stores next month. Industry journal Retail Week has reported that the service could account for 40% of New Look’s sales within three years, and generate a million annual visits to its physical stores.

Another multichannel innovator is John Lewis, for whom 15% of sales are already generated online. Click-and-collect is well established at John Lewis’s eponymous department stores, such as in Newcastle’s Eldon Square, but a 2009 trial extended the service to the JL-owned Waitrose store in Hexham. Now, by the end of October, customers will be able to pick up their John Lewis online orders from more than 80 Waitrose branches.

Meanwhile, other retailers are creating a physical presence where none currently exists. House of Fraser, for example, is opening its first dedicated click-and-collect store in Aberdeen next month, and more could follow in other locations, such as Newcastle, where the retailer has no bricks-and-mortar department store.

Even among pure-plays, the online-physical divide is blurring. Amazon is currently trialling customer collection lockers in shopping centres and major office blocks, starting in London, while plus-size fashion retailer Simply Be – part of home-shopping giant N Brown – has just opened its first physical store in Liverpool, with more sites in the North likely to follow.

The growth of mobile technologies is also facilitating new multichannel opportunities. Online grocer Ocado – which ships all its products from warehouses rather than physical stores – recently tested a ‘shopping wall’ in the City of London, where customers could purchase pictured items for home delivery by scanning the accompanying barcodes with their smartphones.

At CannySites.com, I work with many niche online retailers in the home, garden and travel spheres, and it’s clear that there will always be a place for specialists operating exclusively online. However, rather than online retail leading to the death of town centres, multichannel innovation has the potential to reshape our high streets in all kinds of exciting and creative ways.

This was posted in Bdaily's Members' News section by Graham Soult .