Retail has been hard business in this recession, but over the 2009 holiday season, there were many winners, and those companies that learned how to listen and serve their customers online reached well deserved sales figures.

Traditional retailers have worked hard to compete with online brands on price and consumer satisfaction. And while they may not have reached their goals just yet, they are getting closer. According to a new survey from RIS and IHL Group, many retailers are focusing on improving their cross-channel capabilities in 2010. And if there's a lesson from 2009, it's that those retailers that don't keep up in digital will fall behind in sales goals overall.

According to a recent ForeSee study (which I wrote about here), brands that sell their wares exclusively online are scoring higher in customer satisfaction than retailers that have both physical and digital stores. Pure digital plays had an aggregate customer satisfaction score of 81 on a 100-point scale, whereas store-based retailers had an aggregate score of 77. At the top of the list in customer satisfaction were digital brands like Amazon (87) and Netflix (86). While mixed media retailers scored far better this year, they still have a ways to go. The top traditional stores were Wal-Mart (79), Target (78) and Best Buy (77), all retailers that have worked hard to get their digital shopping experiences up to speed. Meanwhile, if there is a lesson from the bankruptcy of a company like Circuit City last year, it's that real world prowess doesn't matter if you don't get digital.

According to ForeSee, “in general, websites for multichannel retailers significantly underperform Internet pure plays, which makes sense since they have more channels to divert corporate attention and focus.”

But retailers are actively trying to fix that. Their consumer satisfaction rates are much higher in 2009 over 2008. And now, according to the “Store Systems Study” from RIS and IHL Group, retailers are making progress toward improving their shopping experiences across the board.

Most especially, they're working on cross-channel integration and hope to improve those efforts steadily over the next few years. 

According to eMarketer, "Multichannel retailers have the potential to create a highly satisfying cross-channel shopping experience by tying together the best attributes that stores and e-commerce have to offer."

The study found that more retailers said they currently allow in-store returns than in-store pickup of online orders, most likely because guaranteeing in-store products is costlier and more difficult than accepting returns. But by the end of 2010, about 50% of retailers expect to accommodate both transactions.

What's more, it's smaller retailers that are expanding their effort to better handle digital sales and interactions. According to the study, smaller retailers with annual revenues under $1 billion comprised 69% of the respondents who want to adopt mobile couponing and mobile ordering in the next year.

Mobile is a big area for growth over the next three years, and mobile couponing, product information and ordering are expected to be the top initiatives in 2010 for retailers. However, those polled here seem less enthusiastic about mobile price comparison tools — perhaps because they could lead consumers to other stores if products are available for cheaper elsewhere. 

60% of respondents said that their top priority for 2010  is advanced loyalty and customer relationship management (CRM) programs. But while many are planning to improve their integration of online and offline shopping, only 1/4 of respondents listed cross-channel integration as a priority.

However, as consumers become more and more adept with digital mediums, it is up to retailers to figure out how to provide the best experiences for them. While digital pure plays have the benefit of less overhead and often lower prices, brick and mortar retailers have strengths that have kept them in business this long. But they need to become adept at digital if they want to excel in 2010 and the years to come.

Meghan Keane

Published 21 January, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

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Comments (1)



Good Post! Just read about how Chegg is using virtual agents for improved customer response on its website.

over 8 years ago

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