Mike Peirce, head of multichannel retailing at leading retail systems consultancy PMC ponders the relative success or failure of this Christmas season and asks: “How long will retailers treat their Internet channel as something new and refuse to allow it to grow up?”

Too many retailers continue to view their multichannel strategy as an infant each New Year and as a result, leave it stuck in ‘Groundhog Day’.

Retailers who saw phenomenal online growth over Christmas are developing their online business. They are like parents allowing their child to grow. They realise that this ‘child’ is their future. Unfortunately, some retailers do not think like that. They are easy to spot, especially those that have seen dismal results. Because they refuse to allow their online business to grow and develop, each holiday these retailers treat their online channel as an infant – starting from scratch again and again. They repeat the same mistakes and the customer experience remains poor.

However, I think that this New Year will be the ‘year of judgement’ for many retailers. Customers are no longer prepared to let retailers dictate the customer experience. The numbers from this Christmas prove that retailers and customers are converging for either success or failure. There are retailers who once had a successful multichannel strategy but have done nothing to move it forward and let it stagnate. One key indicator is stock location. My attempt to shop for a Nintendo DS Lite was fruitless on the high street, yet online there were 50 in stock. Granted, integration comes with a cost, but the eventual cost of doing nothing will be the loss of customers – and it will only get worse.

Consider after-Christmas sales. On Debenhams sale-day their hotmail banner campaign clicked through to a site that was down. That’s as good as closing the store. It’s misleading customers’ expectations. But they are not alone. The White Company sent letters, not emails, telling customers their orders were delayed – and this is in response to an online booking. Ocado did not honour customers’ terms and conditions that allow them to amend orders, by saying their vans were full (on 22 December). Virgin Wine split an order made on 12 December and only delivered one part before Christmas (the other still hadn’t arrived by 27 December). The Early Learning Centre was paid for two-day ‘express’ delivery yet delivered over two weeks later. All of this creates a poor customer experience – and customers will not tolerate it any longer.

I can add more personal experience. A leading retailer’s Boxing Day Sale had everyone eagerly awaiting the before-dawn start to begin their ‘cyber’ grabbing from the sale racks. At least, that’s what my family (and our friends) intended. However, site performance was so poor we gave up and went to the pub with our friends who had just endured the same experience. What was the general view? Never visit the site again. Retailers must recognise that customers simply will not waste their time with retailers willing to waste theirs.

Compare this with ASOS whose growth continues to skyrocket and yet the Buncefield fire blew their foundations out from beneath them. Why are they growing? They offer great customer experience. Now don’t let anyone say it’s because they are only trading on the Internet (which, by the way is infinitely more complicated due to fulfilment), Amazon faced notably poor press coverage by failing to deliver against customer experience.

As we progress through this ‘year of judgment’ how will the market react? We can see how the high street is reacting to retailers who neglect their customers, because those same customers are in turn neglecting them. But how should retailers react? It’s time to stop hiding behind Baby New Year and treat the online channel more like Father Time – continuously growing and learning. They must develop their multiple channels into a mature integrated entity – exactly as their other channels have developed over the years. Then they need to integrate their retail channels to deliver against ever-increasing customer demands.

To encourage self-reflection ask retailers one question: “Does your strategy encompass all consumer channels?” In the weeks since the start of this year I have reviewed several retail strategies addressing both the high street and the Internet. Unfortunately, too many do just that - one strategy addresses the high street and the other Internet. If those are a signal of a strategic multichannel consensus, here comes Groundhog Day yet again. And I’m putting in a ‘Buy’ on ASOS.

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About PMC
Retail systems experts, PMC (Paul Mason Consulting) offers its clients combined retail and IT experience, gained through working at the sharp end of the retail environment. PMC provides business consultancy services covering retail systems strategy, multichannel retailing, system selection, project implementation, support, permanent and contract recruitment and training. The company’s IT implementation services are designed to eliminate implementation concerns and ensure problem free performance. They include project management, configuration, testing, software building, integration and custom enhancements. PMC offers an extensive range of complementary services in conjunction with its business partner network. This encompasses rollout management, network design, training and help desk, recruitment, contract negotiation, procurement and hardware maintenance. For more information please visit www.paulmasonconsulting.co.uk

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Published on: 12:00AM on 26th January 2007