Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research's weekly analysis on emerging issues facing retailers, presented here for discussion.
RSR's most recent benchmark on retailers' omnichannel strategies found the percent of retailers who report that their cross-channel shoppers are their most profitable shoppers is on the decline.
I've seen the chart below quoted a couple of times now, incorrectly. While there is a pretty straight-line decline from 2013 to 2015, digging deeper reveals a many-faceted story that goes deeper than concluding there is something wrong with omnichannel shoppers.
First, in the early days of multichannel, retailers with strong loyalty programs reported that the more channels a customer shopped, the more profitable she was. Importantly, the relationship was causal in nature and suggested some kind of relationship between channels and the ever-elusive "engagement." The more channels a shopper uses, the more she is likely to "engage" and thus the more she is likely to buy—and buy profitably for the retailer, not just cherry-pick the best deals.
Source: Omni-Channel 2015: Taking Time, Money, Commitment And Technology, September 2015
Which leads to another important dimension of omnichannel profitability. Online shoppers, in general, are less profitable than store shoppers because online is more fiercely competitive and online tends to also be the big "clearance store" for retailers. That fact that the early days of this measure, multiple-channel shoppers were seen as significantly more profitable than a single channel shopper—was actually a big deal given the lower price points and tighter margins online.
Which leads us back to the chart above. Part of the reason why multiple-channel shoppers are no longer significantly more profitable than single-channel shoppers is because the ratio of multi-channel to single-channel shoppers is falling for most retailers. When the comparison (multi-channel shoppers) gets larger than the base (single channel shoppers) the difference between the two becomes less compelling.
In fact, the most important data point is that 27 percent of respondents in 2015 reported that they can't tell or don't know if there is a profitability difference at all. If more and more shoppers are becoming cross-channel shoppers, and retailers have no idea if those shoppers are more or less profitable than anyone, how do they know if their investments are working? What are they measuring to understand if those investments are meeting customer needs as they try to cross channels?
I fully expect to see the day when retailers report that cross-channel shoppers are no more or less profitable than any other shopper—primarily because there is no longer any real group of single-channel shoppers worth tracking. I hear technology vendors groping toward that future, in their efforts to ditch "omnichannel" and talk about "just retailing." When cross-channel shoppers are no longer more profitable, then I'm pretty sure that day will have arrived: just retail.