Monday, 20 August 2012

Why bother with multichannel? - answer #2: it's where the growth is

As I mentioned in the last post, a challenge I am often posed when I work in less developed internet-retail markets (Romania or Belarus being recent examples) is "why should we bother with multichannel? It is organisationally challenging and expensive, and we are doing fine right now."

A second answer is that, even in a rather stagnant economy, multichannel just keeps on growing. An interesting illustration comes from Office retailers in the US. Both Staples and Office Depot sell to a mixture of B2C and B2B customers. Although they have each had varying fortunes, non-store sales as a percentage of total have just continued to grow and grow:

At over 40% of total sales, non-store is pretty important!

Perhaps even more significant, however, is a closer look at recent numbers from Staples, comparing sales via brick-and-mortar with sales via online:

As the credit crunch hit, store sales actually declined by almost 7% between 2008 and 2010. But online sales grew by 32% in the same period, more than enough to ensure that overall Staples kept on growing.

Office Depot is something of a horror story in general:

But at least online sales declined by only 16% compared to a whopping 30% of brick-and-mortar.