Multi-channel retailing: research about offline driving online sales and vice versa

We were recently asked by one of our members for any useful research or articles regarding how offline marketing activities (inc. direct mail, TV, press, store POS etc) drive online sales/conversion. Also, any research regarding online advertising driving store sales/conversion.

Below is some of the research and articles we’re aware of about how one channel’s activity impact the other channels in a multi channel world. Are you aware of anything else? Or do you have any further comments or insight?

1. The offline "multiplier effect" – how online drives offline sales

1.1 Yahoo! Consumer Direct
“Since 2002, ACNielsen and Yahoo! have been working together on a measurement tool to assess the correlation between a person’s surfing and shopping habits. This joint effort is called Yahoo! Consumer Direct - powered by ACNielsen, and for 18 months, Consumer Direct has combined the reach and technology of Yahoo! with the analytical tools of ACNielsen Homescan. The program evaluates the effectiveness of online advertising and promotions by consumer packaged goods (CPG) companies like PepsiCo, Kraft, Unilever and Nestlé.

The study results are consistent—and satisfying. They indicate that online promotions can lift offline sales time after time, whether the item in question is a food, personal care or household product. Furthermore, each campaign has typically brought in more than twice the amount that the company paid to advertise online, with short-term sales increases of more than $3 million.

Details at: http://www2.acnielsen.com/pubs/2004_q3_ci_cover.shtml  
Full report: http://www2.acnielsen.com/pubs/documents/2004_q3_ci_cover.pdf  

1.2 Only 1 Percent of Search-Borne Purchases Linked to First Click (Dec 2004, US)
“An Overture and comScore study on search keywords found that only one percent of electronics category purchases occurred in the same browsing session as the search click, according to ClickZ. An additional seven percent happened as a latent visit to the e-commerce site. A full 92 percent of purchases happened offline. Across all categories, such latent purchases accounted for 85 percent of e-commerce, which means that most will go unrecorded by online marketers, who generally track ROI based only on immediate sales”

See article on the MarketingVox site

1.3 You CAN Tell How You’re Selling Offline (iMediaConnection, March, 2004)
Former Philips Consumer Electronics global marketer shares tactics for judging how well online drives retail sales.
See article at: http://www.imediaconnection.com/content/2892.asp  

1.4 Online Shopping Drives More Than Online Purchasing (US, 2003)
“In an online survey of 4,000 computer and consumer electronics shoppers who clicked from a manufacturer’s to a dealer’s Web site, 34.3 percent said they completed a purchase online, from a catalog, or in a store sometime within one week of following the link. An additional 22.8 percent indicated that they planned to purchase the product within 30 days of the initial visit.”
See article at: http://retailindustry.about.com/cs/stats_b2cecommerce/a/bl_ci051303.htm  

2. Cross-channel media optimisation

2.1 IAB / XMOS (cross media optimisation studies)
Case Studies of online advertising driving offline sales and role online advertising should play in the media mix (e.g. Dove Nutrium case study (print/TV/outdoor) suggests brands should increase online ad budget to 15% of total ad spend)

Download case studies from: http://iab.net/xmos/case.asp  
(other similar case studies available from UK part of IAB at:http://iabevents.co.uk/knowledgebank/resource1.php?section_id=7)

2.2 European Media Consumption study (2004)
The latest research commissioned by the EIAA shows that the internet now represents 20% of European’s media consumption.
Download: http://www.eiaa.net/case-studies/shwCaseStudies-item.asp?id=53&lang=1

3. On-pack promotions driving online usage

3.1 KitKat’s on-pack promotions as a driver of online visits: http://www.advantage.msn.co.uk/flattened/ED9AC635-C427-4440-83A0-ADD4C4E60F54.asp  

3.2 How Coke drove sales to its MyCokeMusic site from on-pack marketing:
http://talk.workunlimited.co.uk/arts/netmusic/story/0,13368,1182941,00.html  

4. Catalogues driving online sales
“Boys Stuff has managed to invert the mail order model, which traditionally processes 70% of orders through a call centre and 30% online, by taking 75% of its orders via the Web. "We send out 2m brochures and the conversion rate on our site doubles," claims MD, Richard North. He’s proven that mail order and the Web can work together as a sales channel, giving customers the chance to browse a catalogue at their leisure and then make a transaction in under 30 seconds.” (NMA, May 2004)

“Mail order catalogue firm Otto, which owns five catalogue brands including Freemans, Kaleidoscope and Montage spends £25m a year on customer acquisition, of which 8% (£2m) was spent online this year.” (NMA, Sep 2004)

"We’re finding more people are getting the catalogue and choosing to shop online, rather than send in a mail order or telephone" says Tim Curtis, Head of Mothercare Direct (NMA, July 2004)

“Despite having to still send out millions of catalogues - "a necessary evil," says Greenfingers MD Kevin Hague- Greenfingers is on track to being a viable online business. "We’ve gone from being so heavily loss-making it went bust to a profitable business that’s doing over 50% of its business over the Web," he says. (NMA, June 2004)

“Multi-channel retailer The White Company has unveiled its first online brochure to use RichFX software, which simulates page turning as if the user were holding a catalogue. The technology is aimed at encouraging traditional mail order customers to purchase online. The White Company hopes to increase return on investment by converting browsers to buyers and cross-selling complementary products.” (NMA, May 2004)

4.1 The Changing Role of the Catalog for Multi-Channel Retailers (DoubleClick, US, October 2004)
Download report from DoubleClick site

4.2 E-Tailers and Print Catalogs – article from Feb 2004
See article at: http://www.ecommerce-guide.com/news/trends/article.php/3307431  

5. Direct Mail driving online sales

5.1 Royal Mail Case Study for Joe Browns (Retail, UK)
"It drove customers on-line, covered its costs, made a profit and resulted in 32% of orders being taken on the web."
Download: ftp://ftp.royalmail.com/Downloads/public/ctf/rm/Joe_Browns.pdf  

5.2 Royal Mail Case Study for Figleaves (Retail, UK)
“Direct mail has brought people to the Figleaves site and played a central role in driving sales revenues, with 60% of customers buying more than once.”
Download: ftp://ftp.royalmail.com/Downloads/public/ctf/rm/Figleaves.pdf  

5.3 USPS research shows direct mail drives online sales (July 2004, US)
Article: http://www.usps.com/communications/news/press/2004/pr04_047.htm  

6. The case for multi-channel
“We were impressed by Oliver Spark’s talk at ECMOD 2004 about the White Company. Mr. Spark is the MD of the White Company, which is regarded by many as an industry leader. From zero to £40m in 10 years ain’t bad, with a split in sales of £9m over the web, £15m via mail order and £14m via stores. What Mr. Spark revealed to the ECMOD audience - adding to the great "catalogue vs. internet" debate - was that he was a big fan of multi-channel. Mr. Spark quoted "the man from Williams-Sonoma" (another company everyone admires) who said that a single channel yielded $180 per per customer per annum in sales, two yielded $240 and three $320. It sounded good enough for the White Company. He also revealed that the White Company managed to acquire email addresses from 50% of its retail customers.” (Screenpages web site, Nov 2004)

"We’re looking at being truly multi-channel," said Alison Lancaster, head of marketing and catalogues for John Lewis Direct. "We are focusing on a dual strategy of online and catalogues, so we can use our catalogue imagery online." Miniature catalogues will be used to support the John Lewis site, having proven themselves to uplift online traffic and sales during two pilots. (NMA, July 2004)

6.1 Thoughts on multichannel retail based on recent Aberdeen Group report:
“About 25 percent of the retailers interviewed say brick-and-mortars still fear that online operations will cannibalize their sales, according to the report”
Article: http://www.evanschuman.com/clips/multichannel-sales.html  

6.2 Multichannel shoppers spend more, says Forrester (this article by Kim Gordon): “Offering customers multiple channels significantly increases their spending, and multichannel shoppers purchase 70 percent more frequently than the average store customer. In a holiday shopping study conducted last year by DoubleClick, shoppers using one channel spent $591. But shoppers using two channels spent $894 and those that used three channels spent significantly more at $995.”
Article: http://www.smallbusinessnow.com/how-to66.htm  

6.3 The business case forr a multichannel approach to sales and marketing (includes a useful chart on effective marketing for online retailers)
http://www.bcg.com/publications/publication_view.jsp?pubID=788&language=English
(full report in pdf: http://www.bcg.com/publications/files/Ret_Online_Coming_Age_OfA_Jan03.pdf)