Understanding the key drivers of and technology related issues associated with going multi-channel

Abstract

A multi-channel retail strategy is viewed by many academics and practitioners to be the success model for most retailers. Yet, while there are many drivers of, and advantages related to, using multiple channels to sell products and services to customers likewise there are numerous technology-related issues. Despite this, the multi-channel retailing literature provides little empirical insight into these technology-related constraints. Moreover, there is a lack of multi-channel retailing research which explores the impetuses behind retailers adding new channels to go multi-channel, especially in the context of the UK retail sector. To contribute to gaps in the literature this study utilises a case study research strategy to examine the key motivations behind, and technology-related issues associated with, multi-channel retail strategic implementation, in the setting of the UK retail sector. Three UK based retailers (Boots, Screwfix and Bettys) are used which have different approaches to, and are at different stages of, adopting a multi-channel retail strategy. In addition, they have different backgrounds such as size, product range, sector and type. Consequently, the use of these three different retailers enables exploration of the drivers behind, and technological problems associated with, implementing a multi-channel retail strategy in the context of store and Internet/catalogue retailers. Case analysis reveals novel themes which are not identified, or not clearly recognised, in the literature. These include that key drivers behind retailers going multi-channel are to increase sales, and, meet the needs of the multi-channel shopper. Indeed, customers want to shop via multiple channels and therefore, these retailers have no choice but to go multi-channel if they are to meet customer needs. However, while at a strategic level these motivations were similar across the case study retailers, they also differed. For example, Screwfix added a store channel to enable customers to purchase products and receive them instantly. In contrast, Boots added an Internet channel to drive footfall in-store and increase store sales. Boots were also adding an Internet channel since it provided them with a marketing channel, which, going forward, was likely to replace other communications channels. The findings from this study also reveal that retailers encounter major technology-related issues when adding new, and using multiple, channels. These problems stem from the need to re-design existing logistics and IT infrastructure to offer a seamless, integrated offer to the customer. For instance, to leverage the brand and marketing mix consistently across all channels, and, to implement ‘click and collect’ (i.e. where customers purchase a product in one channel and collect it in another). Also, due to the need to use innovative marketing techniques, in particular, social media. Importantly, this study highlights that these technology-related multi-channel retailing constraints often have a ‘softer’ side. Technology-related problems are frequently intertwined with cultural, engagement and financial/staff resource related issues. This suggests a need for retailers to find entwined solutions to both technology and non- technology related issues to effectively implement a multi-channel retail strategy.