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Online Channels Working Well for Large Retailers, Less So for Others

Consumers cite the web as the fastest-growing retail channel - by a 2-to-1 margin - and are starting to expect more from businesses, such as ordering products in one place and picking them up or having them delivered elsewhere, according to a Retail Systems Research (RSR) report.

Large retailers (those generating the equivalent of $5B or more in annual revenue) have a head start, as they have more experience in multi-channel retailing, RSR said. Moreover, they are more likely than small and midsize retailers to see the e-channel as an extension of their operations rather than merely an outlet for excess or different merchandise.

According to a survey of retailers, larger retailers are more likely to…

• Offer the ability to order in-store for subsequent fulfillment via other channels (59%, compared with 42% for all respondents):

• Buy online and via catalog for subsequent in-store pickup (59% vs. 35% for total response group).
• Partner with suppliers to enable direct shipments from the supplier to the customer (82% vs. 49% of all retailers).

Challenges

Retailers continue to struggle to make in-store inventory visible to online channels and vice versa; large retailers perform only slightly better than others.

Despite more integrated business processes, underlying technologies supporting multi-channel retailing remains “stove piped” along channel boundaries:

About the report: The “Finding the Integrated Multi-Channel Retailer” report uses the responses of 103 online survey participants from Feb. ‘08 to explore how businesses are using and integrating multiple channels in the retail space.