Shop.org: Retailers Need to Tap Online Potential of Store Shopper

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A study on multichannel retail by industry body Shop.org released yesterday shows that store shoppers who also bought online from the same retailer spend an average of $600 more annually in-store than typical shoppers of that retailer.


The importance of this multichannel shopper is further highlighted by findings that shoppers who bought in all three channels -- retail store, catalog and online -- now represent 34 percent of online shoppers.


Also, multichannel shoppers are more likely to be customers of all three channels and buy four times more frequently online than the average online-only shopper, according to results from more than 48,000 interviews with multichannel shoppers.


These customers, called "Super Shoppers" in the report, tend to buy from a retailer's store 70 percent more frequently than the average store customer and 110 percent more frequently from the retailer's catalog.


A sidebar to this research was the untapped potential in store-shopper awareness of the online channel.


Jim Okamura, senior partner of Chicago and Toronto retail consultancy J.C. Williams Group, which conducted the study with BizRate.com, said the real opportunity lies with first-time online customers.


"Retailers need to tap the potential of their customers who don't even realize ... that there's an online option available to them," he said.


This is partly due to the youth of the e-commerce channel, he said. Some of the study's participating retailers may have had online stores operating for five years, while others are just a year or two into that business.


"Almost by definition, their customer base is growing very rapidly because people are discovering [retailers'] online side," Okamura said.


The study found that first-time shoppers accounted for 71 percent of the online retail channel's customer base, while repeat customers were only 29 percent. First-time buyers are characterized by high household incomes of at least $75,000.


"This large proportion of online customers was much more likely to have never been a store customer and much more likely to be a lapsed catalog customer as someone who has not bought within the last six months from the catalog," Okamura said.


Elaine K. Rubin, chairman of Shop.org, now part of the Washington, DC-based National Retail Federation, said retailers will have to identify these first-timers to tap the potential of online sales.


"For most retailers, the trick is going to be figuring out who those customers are, or more importantly, what store-based marketing activities [to undertake]," she said.


These activities could "be through their store personnel or marketing campaigns and awareness-building campaigns and other marketing efforts, to make these consumers aware that the online channel exists as a research tool, customer service tool as well as a sales tool," she said.


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