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Retail experts embraces existence of more Physical stores along with Online store - Omni Channel works out

Sumesh K Menon 20-07-2016 0 comments

The growth at which Online sales grows is always been a nightmare for the conventional retailers, especially for those who runs chain of physical stores. They can relax now. Experts say that, you will benefit more by having a clear synergy between Physical store and online store and increase your business and customer retention.

One of the research articles in Harvard Business Review magazine clearly shows, how retailers can maximise their revenue by having an orchestrated strategy to use both the channels.  Research findings are interesting. It says that, “Encouraging online customers to visit a store doubled profits ”

Understanding about a customer’s demographic and purchasing behaviour is crucial here. Some of the questions you should ponder on before strategising are

  1. How to encourage the customers to buy more and
  2. Which segment of customer to encourage .

Do a sample rollout and find out

  1. What type of encouragements usually a particular segment of customer react to ?
  2. If he reacts /not reacts - what can be the reason ?

Lets take a scenario, Customers are encouraged by Coupons, and you already have an Omni-Channel presence with few physical stores and an online store.  Study shows that, After a close look on the purchasing behaviour of a segment of customers, its been found that, when you encourage your Online customers by offering discount coupons which can be redeemable at any of your physical stores, the profits increased multi fold. But study also shows that reverse is not true, ie., when you encourage your offline customers to buy from online store by giving discount coupons, shown a result decrease in profit by 51%.

Why the profit is increasing when encouraging your online customers to visit physical store ?

  1. Partly because they make more impulse purchases.
  2. They are also more willing to buy tactical ,”Experiential” goods such as apparel, shoes and makeup.
  3. They are less likely to compare prices ( because its harder to do in sales than online), even though internet is omnipresent now a days.

This strategy will be more effective, especially if you have some intelligent data with regards your customer demographic profile.

Like, encouraging online customers to visit offline store can me more effective,

  1. if the focus customer segments are residing near to your store location.
  2. If you encourage them to collect from store rather on the door delivery.
  3. If you give Free parking facility, if your store is in a heavily trafficked area.

These points clearly shows that if you have physical store along with an online store you can create a match winning game by effectively implementing right strategy. And this is being validated by real time stories, where the online only stores , have started heavily investing in physical stores. For Eg: Amazon has already started one store in Seattle and on its way to open few others too.

In a nutshell, Physical stores are more important than ever before, if you start to embrace the balance between online and offline store.

You can reach the writer at sumeshkmenon@windsbsolutions.com
Ref: Harward Business Review – july-august 2016 edition.

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