Gartner Says U.S. Retailers Need to Up Their Game on Multichannel Retailing

Gartner Multichannel Forecast Says Mobile Commerce Will Account for Less Than 1 Percent of Revenue Through 2015

STAMFORD, Conn., January 10, 2012—  

             Customers expect their cross-channel shopping experience to be seamless, contiguous and consistent, but retailers are struggling to make multichannel retailing “business as usual,” according to Gartner, Inc. 

“Executing on cross-channel consistency will prove challenging, as retailers continue to grapple with siloed business process and a plethora of disparate applications,” said Mim Burt, research director at Gartner. “Most challenging are the product-centric organizational structures that are no longer suitable for today’s customer-centric approach, which should take full account of customers shopping across current and emerging touchpoints.”

Channels have grown as largely separate entities, and business metrics in retail remain overwhelmingly product and channel-focused. Retailers need to change internal organizational alignments to execute a consistent cross-channel shopping experience. Requirements of shoppers across channels and the customer shopping process should be their guiding principles, rather than focusing on the ROI of multichannel initiatives.

“Focusing on ROI on multichannel is a misnomer,” said John Davison, managing vice president at Gartner. “Retailers should focus on identifying the impact of investments in one channel on the other channels. For example, our multichannel retailers’ forecast shows revenue from the mobile channel through 2015 is less than 2 percent, but retailers should not underestimate the impact this channel will have in pushing sales to other channels. Equally, an expected drop in store revenue does not mean reduced investment in their stores. In fact, the store will require more investment targeted at cross-channel shopper fulfillment as its importance as the hub of the retailer’s multichannel offer increases.”

The multichannel forecast also shows that the U.K. leads the U.S. significantly in the current percentage of e-commerce, which was approximately 9.3 percent of retailers’ revenue in 2011. This contrasts with the U.S. percentage of slightly less than 5.3 percent of retailers’ revenue for 2011. U.S. retailers must focus on boosting e-commerce channel sales and become more multichannel aligned in their strategies. They can do this, for example, by leveraging their store assets to complement and enhance sales in both channels. Western European markets, particularly in the U.K., have benefited from generally high Internet penetration and usage, a higher online per capita expenditure, and a better multichannel fulfillment infrastructure.

“The success of the e-commerce channel will be enhanced by a multichannel approach, where retailers leverage the store to make the e-commerce channel even more appealing to consumers,” said Ms. Burt. “In many product categories, consumers prefer to shop online and take possession in the store. Multichannel retailers that offer the ability to order online and take possession in the store will be offering increased flexibility to customers, which should enhance revenue for them.”

Additional information is available in the Gartner report “Multichannel Forecast for the U.S. and the U.K." The report is available on Gartner's website at http://www.gartner.com/resId=1822514. Gartner developed its first multichannel forecast using a variety of data sources, including a survey of Tier 1 and Tier 2 retailers across nine countries, government statistics from U.S. and U.K. sources, and Gartner's own projections for the adoption of smartphones capable of mobile commerce (m-commerce).

Contacts:


Christy Pettey
Gartner
+1 408 468 8312
christy.pettey@gartner.com


About Gartner:
Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is a valuable partner to 60,000 clients in 11,500 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,500 associates, including 1,250 research analysts and consultants, and clients in 85 countries. For more information, visit www.gartner.com.