In the world of consumer electronics it’s impossible to gauge a company’s success by analyzing channels independently from one another. Consumers’ adoption of cross-channel shopping (up an average of 10% from ’04) has complicated the measurement process to the point where online sales cannot be viewed independently from brick-and-mortar sales. In 2006, consumers purchased $111 billion worth of consumer electronics. It would appear that retail stores greatly out performed their online counterparts, selling $85.8 billion and $25.2 billion respectively. However, with more consumers spending time online researching and comparing products, it’s clear that online sites are fueling in-store sales.

Although online sites represent an opportunity for companies to attract customers by offering product descriptions and reviews, retaining consumer loyalty proves to be a more arduous task. 65% of consumer electronic customers claim to conduct online research 12+ times per year (Forrester, “The State of Consumer Electronics Online Lead Referrals” April, 2006). Half of these individuals purchased from different retailers than where they researched. Herein lies the problem. In order for companies to promote consumer loyalty, they must cleverly link their online and offline stores.

Many companies have spearheaded the issue and devised remedies of their own. Best Buy has attempted to eliminate competition between channels by attributing partial credit for online sales to local stores based on proximity to the shipping address. Likewise, their online stores receive credit for any sales made from in-store kiosks. Lowe’s, IKEA, and Circuit City have created interactive design tools that allow customers to design projects online and access their designs in-store, where employees can assist them. Implementing strategies such as these requires foresight; however, for companies to retain loyalty, they must invest in programs that will keep them on par with the changing consumer behavior.

Dan Breiner, Intern

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