Two out of five US retailers do not have a physical store, report says


Two out of five US retailers do not have a physical store, report says

Ian Grant

Two out of five US retailers do not have a bricks and mortar store thanks to the internet, and websites are out-earning real stores, according to a report by the Direct Marketing Association (DMA).

Eugenia Steingold, DMA senior research manager and the report's chief author, said, "Many, if not most, retailers have now moved beyond brick and mortar and have added other channels such as catalogues, websites, TV, and radio for both sales and promotions."

The report, "Channel Integration and Benchmarks in the Retail Industry", analyses direct marketing practices in each channel and looks for channel integration. The report measured how many respondents use each channel, and its effectiveness, measured by return on investment.

The report's key findings include:

- 41% of survey respondents do not have a physical store.

- The website is the most consistently used direct marketing channel, followed by e-mail and direct mail.

- Mobile is the direct marketing channel retailers are least likely to use.

- Among the survey respondents, 66% gather customer information from direct mail, and 65% gather it from the internet.

- About 83% of respondents segment their customers based on demographics, 77% do so based on purchasing frequency, and 76% on products purchased.

- Only 33% provide cross-channel order fulfillment.

- Discounts remain the most popular loyalty program, with 80% of respondents using them.

- Brick-and-mortar stores (20%) and websites (22%) produced the highest level of revenue in 2007.

Steingold said, "To be successful, retailers need to merge and synchronise all channels in terms of consistent brand message, timing, creativity of promotions, loyalty programs, and fulfilment."

DMA conducted the internet survey in November 2007, with 101 retailers participating.

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