Not long ago, the ability to manage a store, attract customers, control inventory and pricing — whether online or offline — was a big job. Now, it's only part of the job.
"Today, to compete anywhere, you have to be everywhere," says Jeffrey Grau, eMarketer Senior Analyst and author of the new Multi-Channel Shopping: The Rise of the Retail Chains report. "Wal-Mart and Target have joined Amazon and eBay as the most heavily trafficked e-commerce Websites, and chain retailers account for about 40% of online sales, compared to just over 25% for pure-play Internet retailers."
During the past holiday season, seven of the ten-most visited retail Websites belonged to dominant brick-and-mortar retailers, and the key to commercial success is becoming increasingly dependent on how well retailers manage their multiple sales channels.
"One reason traditional retailers are going online in droves is the shift in consumer spending from stores to the Internet," says Mr. Grau. "In 2000, Internet sales represented 0.9% of total retail sales, according to the US Department of Commerce. eMarketer predicts that that rate will rise to 3.4% by 2008."
"Most of the thousands of Internet startups that were launched in the 1990s did not survive the dot-com crash. However, these trailblazers, high on vision but short on business fundamentals, helped pave the way for the emergence of traditional retailers' Websites," says Mr. Grau.
Retail chains and other offline sellers became serious about the Internet when they realized that if they did not follow their customers online they risked forfeiting them to more fleet-footed competitors. Now they threaten to overwhelm the pure-play e-tailers.
"Sophisticated shoppers, many of whom are also the biggest spenders, expect their favorite retailers to offer a satisfying cross-channel shopping experience," says Mr. Grau, "whether it is to browse print catalogs before buying from e-catalogs, order goods online followed by in-store pickup or research online prior to making store purchases."
Cross-channel behavior that drive traffic from a retailer's Website to its store can potentially lead to up-sell and cross-sell opportunities. Research from the e-tailing group found that 40% of customers who pick-up online purchases at a store make an additional purchase.