The days when we had to go to a physical store to buy whatever goods and services we needed are over. Within a number of business sectors it has become increasingly common to log on to an Internet store instead of taking the (often) much longer trip to the physical sales outlet.
It is, however, not always easy for a company to sell their goods and services both in a store and on the Internet.
Associate professor Peder Inge Furseth of the Institute for Innovation and Economic organisation at the Norwegian School of Management BI has headed a research project which looks at how companies are handling multiple sales channels (The Multi-channel Project).
Focusing on retail trade and tourism
Furseth has looked into the special challenges involved when a company that has run a traditional store for a long time opens an Internet business.
As part of this project, Furseth has interviewed managers in eight Norwegian companies within tourism and retail trade. He has also interviewed approximately 1000 of each of these eight companies' customers.
The results of this study have now been presented in a research report from the Norwegian School of Management BI.
The majority of the customers interviewed by Peder Inge Furseth and his research team, appears to be so-called multi-channel customers; they shop both on the Internet and in physical stores.
The customers who shop the most
The multi-channel customers, i.e. those who shops both in stores and on the Internet, are not quite like other customers. They shop more than other customer groups (i.e. those who shop either in stores or on the Internet).
"Multi-channel customers are also more loyal than other customer groups," Furseth - one of Norway's leading experts on Internet shopping – claims.
This makes multi-channel customers the most valuable customers a company can have - and the companies may not even be aware of it.
In spite of the fact that most customers use several channels, both stores and the Internet, the companies consider them either store customers or Internet customers.
Apparently, the companies have yet to discover these profitable and loyal multi-channel customers, and have only to a limited degree developed strategies for their new premium customers.
More interaction between the store and the Internet
"As we see it, the main challenge is the lack of integration between the company's sales channels," the BI researcher claims.
Furseth recommends the companies to get better acquainted with their customers. He suggests four practical initiatives:
- Obtain information about the satisfaction and loyalty of the various customer types
- Create seamless connection between the various sales channels (store and the Internet)
- Better information to the customers
- Ensure good interaction between the sales channels
The study also shows that customers who shop in a store are less satisfied than those who do their shopping on the Internet.
Furseth, Peder Inge and Samuelsen, Elisabeth (2008): Development of a multi-channel strategy: The importance of seamlessness and interaction between distribution channels). Research Report - 05/2008, BI Norwegian School of Management