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Multi-channel retailing as a growth strategy for SMME retail businesses in South Africa
Author(s)
Dakora, Edward Atta Naa
Date Issued
2007
Type
Thesis
Publisher
Cape Peninsula University of Technology
Abstract
As the retail industry remains persistently competitive, progressive retailers tend to adopt
multi-channel retailing (MGR) to gain competitive advantage and to achieve other potential
benefits. Many experts argue that MGR widens the retailer's target market and operations to
satisfy the needs of a wide range of customers and, subsequently, eam the retailer potential
benefits (Dawson, 2002:5; Berman & Thelen, 2004:148-149; Ghanesh, 2004:140; Sotgiu &
Ancarani,2004:128).
According to Dawson (2002:5), MGR is being used extensively by large retail outlets
worldwide to complement their traditional operations, thereby providing the most convenient
means for customers to shop while the outlets gain competitive advantage. However, the
benefits of MGR are not achieved by retail small, micro and medium enterprises (SMMEs),
OWing to the fact that there are low levels of MGR adoption in retail SMMEs. This therefore
limits their market opportunities.
The research reported here examines how MGR could become a growth strategy for retail
SMMEs. The study necessitated an extensive literature review of retailing and multi-channel
retailing, multi-channel strategy and the multi-channel customer. Both qualitative and
quantitative data was collected through personal interviews and questionnaires, and from
large and small retail outlets and their customers in the Gape Town region.
The stUdy found that the large retail outlets studied are doing well with MGR, without having
to build concrete multi-channel strategies to integrate their different channels. What
contributes to that achievement is their ability to harmonise their channels to achieve channel
inter-dependency. The study also revealed that there is not much difference between large
and small retailers when it comes to the potential benefits of MGR; therefore size is not a
major issue. The differences lie in the different sectors, and with different target markets and
different product categories, as these require different mixes of channels. Moreover, retail
transactions in an MGR environment are found to follow a cycle of steps within the overall
process, in which a customer's visit to one channel often becomes just one step in the
purchase process. The study provides a useful guide for retail SMMEs to successfully adopt
MeR for their profitability and growth.
multi-channel retailing (MGR) to gain competitive advantage and to achieve other potential
benefits. Many experts argue that MGR widens the retailer's target market and operations to
satisfy the needs of a wide range of customers and, subsequently, eam the retailer potential
benefits (Dawson, 2002:5; Berman & Thelen, 2004:148-149; Ghanesh, 2004:140; Sotgiu &
Ancarani,2004:128).
According to Dawson (2002:5), MGR is being used extensively by large retail outlets
worldwide to complement their traditional operations, thereby providing the most convenient
means for customers to shop while the outlets gain competitive advantage. However, the
benefits of MGR are not achieved by retail small, micro and medium enterprises (SMMEs),
OWing to the fact that there are low levels of MGR adoption in retail SMMEs. This therefore
limits their market opportunities.
The research reported here examines how MGR could become a growth strategy for retail
SMMEs. The study necessitated an extensive literature review of retailing and multi-channel
retailing, multi-channel strategy and the multi-channel customer. Both qualitative and
quantitative data was collected through personal interviews and questionnaires, and from
large and small retail outlets and their customers in the Gape Town region.
The stUdy found that the large retail outlets studied are doing well with MGR, without having
to build concrete multi-channel strategies to integrate their different channels. What
contributes to that achievement is their ability to harmonise their channels to achieve channel
inter-dependency. The study also revealed that there is not much difference between large
and small retailers when it comes to the potential benefits of MGR; therefore size is not a
major issue. The differences lie in the different sectors, and with different target markets and
different product categories, as these require different mixes of channels. Moreover, retail
transactions in an MGR environment are found to follow a cycle of steps within the overall
process, in which a customer's visit to one channel often becomes just one step in the
purchase process. The study provides a useful guide for retail SMMEs to successfully adopt
MeR for their profitability and growth.
Additional information
Thesis (MTech (Retail Business Management))--Cape Peninsula University of Technology, 2007
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