Can online tests drive multi-channel strategy?

Blog Posts:Mu Sigma
Published On: 04 May 2012
Views: 136

If you are even remotely connected to the retail/CPG industry, it is hard for you to miss the two buzz words – Multi-channel strategy and “Test and Learn”. Test and Learn is not a new concept; it is as old as the retail industry itself. It refers to how a retailer “tests” a strategy in a few stores and “learns” from it before doing a full-fledged rollout. These tests could be about introducing a new store format, a new assortment type, a new marketing strategy or anything else. What has changed recently is the extent of science supporting these tests. Questions like “What are the right test stores?”, “How do I extrapolate the lifts seen in the test stores to the rest of the stores?” are being answered more analytically than they have ever been in the past.

With online retail increasingly becoming an integral part of a brick-and-mortar retailer’s strategy, there has been a lot of focus on developing an integrated supply chain, integrated marketing plans, an integrated assortment strategy, etc. Multi-channel strategy in one sweep covers all of these. Said in a nutshell, the process of creating and leveraging synergies between online and the brick-and-mortar channel is multi-channel strategy.

There is no retailer who isn’t focusing on Test and Learn or Multi-channel strategy. The million dollar question is “Do retailers see these strategies as interconnected?” Here’s some food for thought – Can online (which is a cheaper and easier channel for testing) be leveraged to do testing before we do a larger roll-out in the stores?

The naysayers will argue that online customers are different from in-store customers and online assortment is different from that in stores and hence any test done online is not valid for stores. The believers, like Mu Sigma, will tell you that the time is ripe to use online tests to guide retail strategy. Which side are you on?

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