The UK market has been seeing an interesting battle between the high street stores and retailers taking advantage of the online channel. Logic would lead us to believe most growth in online sales would be at the cost loss of sales on the street.

Quietly a trend is emerging where street retailers have been building up their own online presence are are now realizing increase in footfall conversion to sales. Many customers are doing their research online and buying at the stores.

All this has been possible as a result of an aggressive move towards multi-channel integration and retailing. In simple terms, integration of the store channel with the online channel enabling the customer to have access to the same products, price and promotion across both the channels.

The Indian organised retail industry much like the telecommunication industry is in a unique situation of being setup from the ground-up with the most modern facilities and technologies. It should ensure that it approaches its pan India roll-out with multi channel retailing at the heart of it.

The India Retail Report 2009 forecasts the organized retail market will likely exceed to around Rs. 2,30,000 crore in 2010. The B2C e-commerce market would be around Rs. 6,000 crore growing at a scorching rate of over 50% every year. The latest figures pegs the number of internet connections in India at over 40 million and growing at a healthy rate each year. The population using the internet channel is increasingly younger and would represent the customers of the present and the future. Online retailing.

In the Indian retail context the internet is less used for online transactions and more as a medium to research products and to recommend & review products for friends and peers through the social network websites. Many buying decisions are being concluded online but the actual transactions may happen in the stores. This accentuates the need for early adoption of multi-channel retailing by Indian retailers.

Multichannel retailing crystallizes itself into a basic set of features available to the customers to switch between different channels seamlessly:

• Common Product: Customers like to see the same set of products available both within the store and online. In case of different store formats operated by a retailer, the online channel would become a superset of the Product, Price and Promotions. This is a significant challenge for retailers operating a traditional store format and moving towards an online channel as often distribution for store and online channels would not be planned to work together. Most retailers in the UK are incrementally upgrading the product range on the online channel. Catalogue based retailer, Argos is ahead of the curve due to their business model. On the other end of the scale are Morrisons who do not have an active online strategy as yet.
• Common Price & Promotion: Similar to the expectation around Products, customers expect similar price and promotion offered through both the store and web channels. Due to the reduced overheads in selling direct through the internet, online prices are often less than in-store prices. However, online transactions have a delivery cost associated with them. Hence the Industry should move towards a convergence in the prices across channels making it simple for the customers to arrive at a buying decision. Not many retailers have been able to achieve this in the UK. Often web prices are lower than in-store prices and stores will have steep discounts on certain products in order to clear store inventories.
• In-store collection: Order on the web and pick-up in-store is a favourite multi-channel integration feature liked by many customers. Many UK retailers have successfully implemented in-store collection such as Jessops and Comet within 30 minutes of ordering. There are other major retailers who are yet to implement this feature as efficiently as others such as John Lewis who offer next day collection at stores or Boots who offer collection after 4 days in-store and finally major retailers yet to offer this facility to the customers such as Superdrug. This requires tight integration in the inventory and distribution management.
• Customer Services: A joined up customer service for both the store and internet channel is important for customers to gain confidence and trust in the retailer. The customer service function should treat customers from different channels as one both in understanding the buying context of the customer as well internal record keeping. Loyalty cards are a good way for achieving this integration from a true service perspective. Tesco in the UK is renowned for running one of the best loyalty card programs. John Lewis is also known for high levels of customer service.
• Product Returns: A big deterrent in using the online channel is the difficulty a customer faces in returning unsuitable products. It is also one of the biggest weapons a multi channel retailer can unleash on pure play internet retailers. A customer should be able to return bought through the online channel at any store. This relates back to the ability of the retailer to universally identify a transaction made by the customer irrespective of the channel. Most retailers are able to provide this facility even if their systems internally are not joined up as long as a valid receipt of online transaction is produced.

With the advent of the 3G technology and the maturity of the SMS technology mobile channel is an integral part of the multi-channel strategy. India has one the largest consumer base using mobile phones and retailers should take advantage of the channel in facilitating order taking, providing customer service and customer personalized promotions. Jessops provides the facility to be informed about the web order for in-store collection through text/SMS messages. However, mainstream adoption of the mobile channel is yet to be seen in the UK market.

The increasing maturity of the multi-channel strategies in the UK market and the difficulty seen in the adoption provides a window for Indian retailers to realize and focus efforts to streamline its supply-chain especially in the areas of distribution, customer centricity & service, product, price and promotion management across channels as it treads along the path of establishing its organized retail market.