Report: Retailers Adopt Multichannel Strategies

Multichannel retailing is on the rise in the U.S. and Europe, according to a new study published by Gartner (NYSE: IT).

Of the 375 companies surveyed between September and December of last year, roughly 75 percent said that they currently have a multichannel retailing strategy (MRS) or are planning to implement one.

A multichannel retailing strategy includes not only physical stores and catalogs, but also Web sites, kiosks and wireless channels.

"It confirms what most of us suspected," Jeff Roster, senior analyst in Gartner's IT Services group, told the E-Commerce Times.

Not Exclusive

The enterprise no longer views physical stores and online sites as mutually exclusive initiatives. By having a comprehensive strategy for dealing with all channels, retailers will be able to interact with their customers "when and where the customer chooses," said Roster.

Roughly 33 percent of the respondents in the Gartner survey were already working on an MRS initiative. Another 27 percent had taken the first steps, including discussing a strategy internally. Fouteen percent had begun talking with technology vendors about implementing an MRS.

After a flurry of online retail efforts, many companies have pared their Web projects back as the economy sank to new lows. But the Gartner survey found evidence that the tide is beginning to turn.

Fearful Motivation

Early on, companies had knee-jerk reactions that caused them to build sites in response to perceived competitive threats, Roster said. "That's not a great IT spin." Still, said Roster, fear has turned out to be "a great thing for driving technology."

Now, retailers are smarter about their technology purchases, particularly when it comes to hawking their wares online. "Retailers are really approaching the next generation in smart IT mode, building the infrastructure to play in the multichannel world," Roster explained.

Upgrade Priority

Upgrading Web sites is taking priority over other upgrade initiatives, the consulting and research firm said. Of the respondents to the survey, forty-five percent will replace, re-engineer or otherwise revamp their Web sites.

Thirty-nine percent were set to take aim at initiatives such as point-of-sale systems, database management systems and in-store systems. Point-of-sale systems scored highest among priorities, with 67 percent of respondents naming it as the top choice.

"Point of sale is a huge concern," said Roster. In distant second, at 13 percent, was supply chain and logistics management. CRM held third place at 11 percent, and merchandise planning weighed in at fourth place with 9 percent.

Holistic Approach

Many vendors are becoming cognizant of the holistic approach being taken by retailers. Said Gartner analyst Fred Landis, "Vendors of retail technology and services must recognize this change and approach retailers with an integrated solution that addresses both channels."

With retailers getting smarter about technology, vendors should be getting wiser about their dealings with customers.

Retailers "know where they want to go," Roster explained. Vendors should therefore be positioning themselves to become truly strategic partners with retailers. "If they want to become players going forward, they need the retailers to view them that way," he said.

Roster added that vendors' credibility is on the line.

"They have to be honest and visionary," said Roster. "They can't hang anyone out to dry."