What is the incremental value generated by multichannel customers?

Multi-channel¹ customers represent 3 to 11% of customers and 6 to 24% of the revenue in the apparel and cosmetic sectors. This proportion saw a significant increase before the COVID-19 pandemic. Although the figures have slightly decreased since then, these customers still present a significantly higher customer value compared to the average customer.

¹Multi-channel: at least one online and one offline purchase during the period.
/!\ Single-channel status is calculated only for the analysis period (i.e., if someone makes an online purchase in 2020 and an offline purchase in 2021, they are considered single-channel online in 2020 and single-channel offline in 2021, not multi-channel).

Source: Distribution chart of buyers and revenue among multichannel buyers, single-channel offline buyers, and online buyers (Numberly, 2024)

At first sight, we would be tempted to conclude through our research that multi-channel customers generate a lot more revenue than single channel customers (2.7 times more in the apparel sector and 2.4 times more in cosmetics).

This higher value can be explained by the higher purchase frequency as they make 2 to 3 times more purchases. Indeed, while these findings are impressive, it is important to note that their value is somewhat inflated due to the definition of a multi-channel customer itself. Indeed, to be considered multi-channels they must have made at least two purchases, unlike single-channel customers, which generates a construction bias.

After adjusting for this bias by considering only single-channel customers who have also made at least two purchases, the value of multi-channel customers remains higher, but the gap narrows. Multi-channel customers generate 1.3 times more revenue per customer than single-channel customers, compared to 2.6 times before adjustment. Therefore the gap has been divided by 2.

After the adjustment has been made, the higher value of multi-channel customers can still be explained by a higher purchase frequency (x1.2 in the apparel sector and x1.15 for the cosmetics) even though for some brands the average basket or the number of articles/transactions can also have an impact.

Some underlying assumptions that might explain the higher value of multichannel customers are as follows:

• Higher engagement and loyalty due to more touchpoints with the brands
• A more convenient and satisfying shopping experience with the ability to switch between online and offline
• Access to a wider product catalog (store offers + online offers)

 

If we take a look at those who shop across multiple channels, the value of offline and online transactions is relatively balanced, although for some brands the value of in-store transactions is slightly higher.
Sales generated by multi-channel customers are 1.2 times higher (vs. single-channel customers) in the apparel sector and 1.1 times higher in the cosmetics sector. On average, multichannel customers’ turnover is explained by 55% offline transactions and 45% online transactions.

In conclusion, multichannel customers represent a relatively small portion of the customer base (7% of customers) but generate a significantly higher share of revenue (13%). Implementing an omnichannel strategy is highly beneficial for maximizing customer value.

To better meet the needs and expectations of multi-channel customers, but also to encourage this type of behavior over time, several levers can be activated:

• Services > offer services that facilitate and streamline the overall shopping experience (online or offline): free home delivery, click & collect, payment in 3 instalments, free returns (in-store or relay), 30-day trial, money-back guarantee, automatic checkouts, etc.
• Promotional offers > activate personalized discounts or discounts on special occasions of the year (for both online and drive-to-store purchases): -15% off your next online purchase, for your birthday, take advantage of a 20% in-store discount on the product of your choice;…
• Loyalty > encourage and offer an omnichannel experience: homogenize the customer experience through a global program: exclusive access to new collections/products to discover in-store (or online), free make-up session, personal shopping sessions, free samples delivered to your home, loyalty points offered for dropping off bottles or clothes in-store, etc. These are just a few of the mechanisms that help create commitment.