Finding profit while avoiding a race to the bottom means Europe’s retailers need to move from multi-channel to integrated cross-channel sales models
London/Frankfurt, December 11, 2013 – The Germans buy on price, the British buy on credit, the French have the best stores but are yet to “click online” and none of them have found the winning strategy for combining clicks and mortar. However, this year’s BearingPoint Institute report makes interesting reading for retailers on how to think differently to reach customers, by drawing on the insights of more than 100 senior executives and strategists working in the European retail sector.
The story across European retail is one of a failure to integrate and co-ordinate. The big retail chains understand the need for online sales channels. After all, online buyers across the major European markets are growing by about 17% a year. But all too often this comes at a heavy price to the underlying business – cannibalizing instead of complementing, while consuming vast amounts of cash. All because consumers expect bargain basement prices and unlimited choice when they shop online. Margins have been eroded and development costs have skyrocketed, but customers remain unconvinced – retail sales across the Eurozone have fallen 9% since 2007.
But there are lessons to be learned from the differing approaches across Europe. Nobody has yet cracked it, but plenty are doing parts of the process well. From its research BearingPoint has identified seven key success factors for cross-channel retail:
Launching the BearingPoint Institute report, Kay Manke, Partner at BearingPoint and author of the study, remarks: ”It’s a tantalizing prospect for retailers – rich rewards on offer if they can pull off an integrated view of sales and service across online sites, physical stores and mobile service delivery. Yet cross-channel retailing strategies are not without their challenges, as they impact directly the processes, structures and information flows at the heart of retail business models. Only 33% of respondents to our survey had a synchronised cross-channel picture of their customers. Get it right and these brands can look forward to being a staple of our High Streets – both real and virtual – for decades to come. Get it wrong and face extinction within 20 years, no matter how dominant you are now. Today’s consumers are increasingly cross-channel in terms of their purchasing behaviors and are never going to return to the pre-digital era. The stark truth is, even as retail itself transforms, retailers that rely exclusively on ‘footfall’ are already staring into the abyss. “
Cross-channel is above all else an opportunity. Traditional retailers with physical stores have the chance to compete against lower-margin online models, if they orientate their respective business models to integrate the right components efficiently and meet the evolving needs of the customer base.
To read more about how cross-channel strategies can turn the fortunes of Europe’s retailers around, please download the BearingPoint Institute paper “Can cross-channel offer Europe’s retailers a more certain future?”, which can be found at Can cross-channel offer Europe’s retailers a more certain future?.
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