Recently i read an article by Mckinsey which discusses growing importance and need of the multi channel formats for the retailers. The most important of these channels is to use Internet as distribution channel. It has been found out that retailers which used multi-channels have recovered faster from the 2001 recession as compared to the ones using traditional retail channels and online channel has been the most effective channel format that has been used by these retailers.
It is of great amazement that while the overall retail sales have been decreasing in US through the current economic crisis, the online sales have been increasing. Consumers are either searching for product information on internet or directly purchasing online, the trend is continuously moving upward. Mckinsey researchers highlights that by 2011, internet will play a role in around 45% of retail sales in US. So, no retailer can undermine the importance of internet as distribution channel.
The multi channel strategy is going to be the key driver in the years to come for retailers and Internet distribution channel development & its marketing would be a significant part of this retail strategy. The key fundamentals to be focused while designing an internet channel are:
1. The internet channel's product assortment need not to be same as in store. It could be just an information channel for the retailer's products & services as utilized by IKEA. The IKEA online channel supports the store by helping the consumers to know about their products and plan their purchase with real time inventory updates and product location in store.
2. The innovative ways to integrate the internet channel and the other offline retail formats will be an added advantage. Online web kiosks could be installed in stores to order the out of inventory products.
3. Online marketing tools with proper emphasis on social media should be used to propagate the retailers online store through interactive web 2.0 enabled communities so as to engage the customer. A subtle offline campaign could be of great help to increase the awareness of such initiative.
The Mckinsey article can be read at -
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