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Why are the multi-channel retailing so popular?


Multi-channel retailing enables a firm to reach different customer groups, share costs among various formats, and diversify its supplier base. Retail leader Wal-Mart sells through stores (including Wal-Mart stores, Sams Club, and Neighborhood Market) and a Web site. Sams Club

The value of a Web site to the multi-channel retailers bottom line is far greater than just the online purchases being generated. A large proportion of multi-channel shoppers--86 percent of those surveyed in a recent study-prefer to make purchases offiine. Yet this statistic dramatically understates the influence of the Web channel. Nearly 40 percent of multi-channel shoppers prefer to use the Web for browsing and researching their purchases. Of this group of people who would typically be viewed as unconverted browsers or "shopping-cart abandoners," 71 percent complete their purchase in the store. In addition, shoppers are consistently less satisfied with the store experience than with the Web sites of the same multi-channel retailers, suggesting that positive perceptions generated online are being undermined at the shop with point of sale hardware.

Retailers--single-channel or multi-channel--engage in nonstore retailing when they use strategy mixes that are not store-based to reach consumers and complete transactions. U.S. nonstore retailing sales exceed $375 billion annually, with 80 percent-of that from direct marketing. The fastest-growing form of direct marketing involves electronic (Web-based) retailing. From sales of $500 million in 1996, Web retailing revenues were expected to exceed $100 billion in 2006.3
Nontraditional retailing also comprises video kiosks and airport retailing, two key formats not fitting neatly into "store-based" or "nonstore-based" retailing. Sometimes they are store-based; other times they are not. What they have in common is their departure from traditional retailing strategies.

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