Research team headed by Göttingen investigates possibilities of online channels
Stationary retailers are under immense pressure to expand their business into online channels. They have two basic options: They can either build a pure online "sales channel" to increase their reach (multi-channel approach). Or they can complement their online channel with additional in-store services (omnichannel approach). A research team from the universities of Göttingen and Augsburg and the Copenhagen Business School in Denmark has now compared the two alternatives and analysed to what extent retailers can use their expensive infrastructure to compete with pure online retailers. The study was published in the trade journal MIS Quarterly.
The omnichannel approach can, for example, cover the collection of goods in shops as well as service and returns in the shop after an online purchase. Omnichannel retailers thus use synergies between online and offline channels to expand the range of service options and to differentiate themselves from pure online trading. However, the implementation of such an approach involves high costs and risks, as basic IT systems and processes of the retailers have to be adapted.
The researchers now compared twelve alternative multi-channel and omni-channel approaches and their effects on customers. "Our results show that omnichannel approaches are clearly superior to multichannel approaches in terms of flexibility and risk perception," explains Prof. Dr. Manuel Trenz, Professor for Interorganisational Information Systems at the Faculty of Economics at the University of Göttingen. "Customers appreciate these aspects. Conversely, optimising the online channel by convenient same-day delivery can generate competitive advantages in equal measure".
The detailed results of the study can help stationary retailers to analyse the challenges of an omnichannel approach for their own company and to develop the optimal strategy for a successful competition with pure online trade by weighing up the customer advantages and the costs and risks. "Skilful integration of the physical business and infrastructure with online retailing offers small and medium-sized retailers the opportunity to use their cost-intensive infrastructure to realise competitive advantages and differentiate themselves from the increasingly powerful pure online retailers," says Trenz.
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