Deloitte's Xmas Retail Survey 2008

Just spotted Deloitte's related paper to their annual Christmas survey; 'Multichannel retailing - every cloud has a silver lining'.

It's a succinct read and I'm sure only touches the surface of the survey results. In reading it, I felt a level of vindication for my earlier posting about the need for CRM. The survey results would indicate that retailers do see the need for a CRM as an enabler to consumer x-channel behaviour - great news!

Interestingly, joint top of the key challenges faced to becoming a true multichannel retailer is 'Inflexible organisation structures and processes that are based on channel and not brand' at 41%, but 'Implementing the required cultural shift and changes to measures and incentives' was last at 9%. Surely these should be of joint importance, the latter going some way to address the former? I may not be an organisational change expert, but laying out some incentives to encourage behavioural change is a good step in the right direction for getting organisational change accepted.

Does Multichannel retailing need a re-brand to Cross-channel?

Over the past few months I've noticed the increasing use of the phrase "Cross-channel" replacing "multichannel" in presentations, whitepapers and blogs by various industry commentators and consultancies.

However this doesn't come as any surprise to me, as back in February when I posted a question on LinkedIn Q&A asking about the challenges of becoming truly multichannel, I received an interesting response.

Satindra Chakravorty believed, even back then, that we needed to decommission the phrase multichannel as it did not convey what the customer does or what's required by the retailer to enable the customer journey across channels. In fact, his view that any organisation that considered its processes as multichannel also would have the notion of boundaries between those channels. My view is that if this is the case, those espousing they are multichannel haven't really understood what it's about.

Maybe the marketing teams at these consultancies have decided that a rebranding exercise is required, though I can't help but think that maybe if they'd got the message and scope of impact right first time around we wouldn't be needing Multichannel 2.0 aka Cross-channel now.

Either way, whatever you call it the key challenge is moving from purely a product and sales centric to customer-centric retailer and overcoming the obstacles of people, process and technology that accompany all such transformations.

eCommerce Expo - Day 2

Given that I'm making this blog entry well before the end of the expo may give an indicator that I've some free time not attending the seminars. Not that the seminars have finished, more that I've given up attending them... A single word sums it up - disappointed.

Whilst many of today's sessions had multichannel in their title all but one actually had actual multichannel content. Even that session only skimmed the surface. In any case, here's a rundown of the sessions I attended.

First up, "Customer-generated content goes multichannel" with Bazaarvoice and Screwfix. This was moderately interesting, but given that I'd spoken to Bazaarvoice recently nothing particularly new surfaced. It was interesting to hear about the Screwfix experience. They are beginning to use online review content in their offline channels, though didn't indicate whether this was having a positive affect on their trade desk or catalogue sales. More interestingly, their email campaign to incentivize reviews threw up a surprise. Where the subject did not include their win £100 promo they saw 2% more reviews! In terms of uplift, Screwfix have seen a 34% uplift in sales of products with a 2 star or above rating and an overall lift of 32% in sales for products with ratings versus those with no rating. This backs up a statement in a later session featuring Bazaarvoice, "with the proliferation of advertising, reviews are a key differentiator in driving sales".

The next session, "Multichannel: the road to true retail success", didn't start off too confidently. The presenter, Chris Barling of Actinic, telling us he was the John McCain of eCommerce and that many in the room probably knew more about multichannel than he did! It was tempting to walk at that moment, but didn't want to dent his confidence further. Chris' opening slides presented a few top-level facts from recent IBM and MORI surveys on multichannel behaviours and it would have been nice to dig a bit deeper here, but as I know there's only so much you can get from a web trawl before you have to pay good money or let the consultants in to get hold of the detail! Sorry Chris, but it was obvious. The rest of the session was a Chris taking us through a selection of Actinic's SME retailers and how their only using 1 or 2 channels to do business... not a great advert I'm afraid.

The final seminar I attended was the BT Expedite/Mosaic/Wickes presentation on Multichannel integration strategies. As always, John Bovill of Mosaic spoke confidently and heaped praise on the BT Fresca platform. A few good points were how Mosaic recognised that the customer interacts with the brand, not recognising channel. The key was to ensure consistency at every touchpoint. Mosaic's biggest challenge was the cultural move to become customer centric.
The rest of the session was a quick talk from Bazaarvoice (again!) and the customer experience manager from Wickes telling us how they're doing more or less the same as Screwfix. Hat off to Justin Crandall of Bazaarvoice for getting so much airtime for his company!
Again though this was hardly multichannel or the issues we face implementing multi or cross channel retailing.

Before leaving I did get a chance to chat with the guys from Mercado, who indicated they're currently being acquired by Omniture. This could be interesting to see how they compliment each other to improve upon their closed loop analytics and merchandising. I also wonder what will happen with the relationships between Mercado and the other Web Analytics vendors such as Coremetrics?

All in all a disappointing day, I was hoping to see wider coverage of multichannel topics and advice, to name a few

• multichannel fulfilment and inventory mgmt
• how single view of customer enables multichannel
• organizational barriers to cross channel retailing

Whilst I appreciated it was an eCommerce Expo, why tempt the audience with titles if the content isn't there!

eCommerce Expo - Day 1

The day looked like it was going to turn into something of a damp squib as the first seminar I attended was a real let down. Entitled, 'Online shopping cross-border' it was billed as insight from the IMRG on international commerce. Unfortunately James Roper, Chief Exec of IMRG, first slipped up by using the phrase 'it's just another postcode' - destroying any credibility almost immediately. Obviously he's unaware of EU intrastat sales reporting, the varying sales thresholds for tax reporting across the EU countries, the x-border invoicing legislation or that not all Eire addresses have a postcode... Oh dear James. Though none of this mattered as it inevitably turned in to a pitch about the broader IMRG work. The couple of pieces of wheat that could be taken from this were the 'pathfinder' project the IMRG are spearheading. This hopes to provide a x-border working model with the EU commission (more on this would have been great) and the other, imrworld.org - a website containing lots of stats and info on x-border ecommerce.

The next session I chose was a case study, much, much better! Long Tall Sally took us through their approach to selecting Hybris and PortalTech as their ecommerce platform and SI. They kindly presented their lessons learnt;

• using traffic lights to communicate their evaluation results worked well,
  
• don't get hung up on details in the early stages of selection - use the quotation for this,
  
• ensure plenty of time for UAT - don't let downstream slips squeeze it,
  
• don't underestimate content migration,
  
• engage 3rd parties (e.g. Payment services) as early as possible checking and double checking they can meet your timescales.
  

Afterwards I caught up with Andy Piscina, UK Manager for Hybris, who was very upbeat about how brisk business in the UK is going with a couple of significant recent signings.

After a bite of lunch and a catch up with colleagues it was time to see what Tesco had up their sleeve. An excellent presentation from Charlotte Tookey, Tesco.com, and Finlay Clark of Bigmouthmedia. It outlined how their online operation interprets the core principles and
distills them to: Easy to shop and Delivery on time.

To Tesco, SEO is key to their non-food offer as it's not what customers typically know Tesco for. They teamed with bigmouthmedia who helped get them ranking highly through the use of sitemaps, understanding Googles indexing behaviour, hierarchy naming and so on. All of which they bundled up into best practise documentation to utilise across Tesco's numerous microsites. Finlay then gave a heads up on what's next, utilising social networks and growing their community microsites. A great presentation and plenty of food for thought.

The following session was disappointing, probably for the technology vendor as much as the audience. I was hoping to find out how GSI Commerce were being utilised as an enabler to Casual Male's European expansion, instead we were subjected to a pitch from CMs COO and the
GSI guy barely got 10 minutes... A shame.

The final session I attended for the day was Simon Evetts, CTO of Javelin, session on buying or renting your ecommerce platform. A good session, whilst perhaps a little too brief, showed a good level of knowledge of the current marketplace and that with the numerous delivery models it really isn't a clear cut decision. There were also some good tips in there for what to consider when going out to tender. A key point well made was to plan a 3-5yr lifecycle for the platform.

Overall a day of hit and misses, but nothing new there for those that have attended these affairs before.

Tomorrow has more multichannel on the agenda, so it should be interesting.

eCommerce Expo

I'm off to the eCommerce Expo at London Olympia over the next couple of days, where I'm sure there'll be plenty of sales pitches. Though there does appear to be a few multichannel sessions, so I'm hoping to get a feel for what other retailers and tech vendors have achieved and experienced.

Let's hope they focus on the broader issues more so than the recent multichannel summit I attended. Where it felt that the presenters were too focused on just the Internet channel.

I can only hope! Watch this space...

Will the economic downturn postpone your multichannel efforts?

With the downturn appearing to be in full swing there's a danger that
some retail execs will postpone their multichannel aspirations.

Today I attended a presentation about strategies to retain core customers. This was followed by a statement that a CRM programme was not needed and that experience had shown that no x-sell or up-sell initiatives have ever been successful. This really grated with me and seemed counter-intuitive.

The customer is king to the multichannel retailer - how do you target your core customer when you don't know who they are and cannot connect with what they're buying? You resort to sampling and lesser accurate techniques whilst your competitors use their CRM and loyalty schemes to mine customer trends and buying patterns!

Surely in the current climate knowing your customer and what they are buying is key to retaining them. I would suggest the lack of success relating to x-sells, etc is more related to the lack of the ability to measure success.

I suspect the statement was more related to the state of budgets for such a CRM programme.

My view is that now more than ever is the time to find out who your customer is, how they are interacting with you and how you can serve them better.

The impact of iphone on multichannel

It's been a while since my last posting, but I suspect I'll be posting a whole lot more now I've discovered mail-to-blog and how easy it is on the move with my new iPhone.

On the subject of the iPhone. One has to wonder what impact it will have on the use on the Internet and ecommerce. Some might say it'll open up the opportunity for a full mobile internet experience. I've got to wonder given the number of iPhone optimized websites out there already, some have already decided they need to modify their "full" Internet experience into something more digestible on the iPhone form factor.

Whatever the future of the iPhone, I suspect the feasibility of usable mCommerce capability just got a whole lot closer.

I'd be interested in others thoughts on the subject.

The Consultancy take on Multichannel Retailing

After reading the article on the BT Global Services report, the subject of my last post, I decided to take a quick look at what the other consultancies were saying (or have said) about multichannel retailing.

Wipro http://www.wipro.com/ai/images/downloads/wp/IntegratedMulti_Channel_Retailing.pdf
Whilst I've worked with Wipro in the past and on both occasions came away slightly disillusioned, I have to say that this whitepaper is excellent. Though that's not just because their introduction has an almost identical definition for Multichannel Retailing as I used in my first blog post, but because they clearly define the benefits and challenges to implementing a multichannel operation. They highlight the added complexities of legacy systems in an established retailer, the governance issues in ensuring consistency across channels, the need for organisational alignment and the difficulties of getting store staff onboard with promoting cross channel shoppers. Of course the paper finishes by promoting the Wipro appraoch, but still a good high-level paper.


Javelin
Unfortunately, Javelin Group don't have a great deal to say about Multichannel out on the web apart from their brochureware. That's a shame, as I've worked with these guys and seen them influence and advise on both purely eCommerce strategy and cross channel.


Charteris
Back in late 2006 Charteris, a UK based IT consultancy, commissioned Martec to review the current state of multichannel retail in the UK. In early 2007 I was lucky enough to attend their breakfast briefing on the subject in which several well known UK retailers discussed the challenges of multi-channel retail. The report produced by Martec highlighted a couple of areas to me, the main being the lack of decent CRM processes across channels, followed by KPIs used to measure channel effectiveness. My view on the first point is that many retailers have yet to understand the wealth of customer data that is available to them from their web channel and therefore the need for an effective CRM platform to capitalise upon it. Not only that, but how they can merge that data with their other channels and external sources. The second point always amazes me, whilst many businesses produce business cases to justify a particular project, it very rarely contains any clear success criteria on which to base KPIs, e.g. level of customer retention/acquisition. Typically it's only ever about the first 5 year projections on the incremental revenues. 9 times out of ten, these KPIs are picked up in the reporting requirements that also seem to be the last thing the project team think about. Of course, Retailers aren't the only culprits here.


Conchango
Rizwan from Conchango, a business consultancy and systems integrator, has an excellent couple of blog postings. I think he sums up Multichannel and its challenges in his posting 'What is Multi-Channel?'. Working for one of those older traditional retailers, I totally agree with his observation regarding greater gains, but higher barrier to entry due to technology and organisational obstacles. In an organisation that has grown it's business units organically and traditionally autonomously with IT aligned to business unit, there are silos of organisation and technology which first need bridging and then replacing with joint technology and process - thankfully it's something that's been started here. Rizwan also mentions Service Orientation and this is something I want to go in to more detail about in a later posting. Service Orientation is a key concept to enable multichannel retailing, allowing individual services to be called upon from multiple channels to provide that single, consistent customer experience.

All in all, the consultancies appear to concur with the definition and points I raised in my first posting. In fact, many of them use a similar definition or at least some of the same terms!

The importance of getting it right

Just spotted this posting on TheRetailBulletin - "Multichannel Strategy Drives Customers Away".

It describes a recent survey conducted by BT Global Services and highlights the fact that if you get it wrong and the customer experience isn't consistent across channels then your missing out on sales. Almost all repondent (97%) expect the interactions to be consistent across channels.

If you get it right there's the likelihood that those using 2 or more channels will spend 114% more than those only using a single channel!

An interesting final statement, “The difficulty with multichannel strategies is often a chicken and egg one. Organisations will only invest significantly in a new channel when they can prove its worth. They should remember, however, that customers will only use a new channel if it offers them a truly effective experience.” - surely this is actually a result of the barrier to adopting a new channel being too high. So, what are these barriers? It's probably a fair split between lack of IT agility and resistance to organisational change or new process adoption.

I've a few thoughts on the IT agility one that I think the NRF/ARTS are starting to address and I'll elaborate more as my blog continues.

What is Multichannel Retailing?

In the first of what I hope to be many blog posts I'm going to attempt to create a succinct definition of what is multichannel retailing.

A quick Google for the term 'multi channel retail definition' didn't really come up with much.

In my view Multichannel Retailing can be summed up with the following phrase; "Multichannel Retailing provides a consistent customer experience regardless of the channel that a customer wishes to use to interact with the organisation"

There are a few key sub-phrases in that sentence I wish to highlight. Let's take them in reverse order...

Interact
I could have easily used the word 'shop' in place of this, but I didn't. The reason is that in this day and age the customer relationship with a retail organisation should be more than simply a shopping experience. With the advent of the Web (forums, customer reviews, etc), IVR and other channel technologies there is no reason why the relationship between customer and retailer should not be more interactive.

Channel
What exactly is a 'Channel'? What makes a retailer 'Multichannel'? Nowadays we can shop with our favourite brands in a multitude of ways; the bricks & mortar shop, web, phone, catalogue/mail order, mobile phone, in-store kiosk, IDTV. Each and every one a different 'channel'. The majority of retailers have at least 2 of these channels operating. So, surely aren't all these 2+ channel retailers classed as 'Multichannel'. One might argue, 'Yes' as they're operating in multiple channels, but how many of them meet the definition I've made above? That bring me on nicely to my final point...

Consistent Customer Experience
The most important of all. I love the phrase 'Customer is King'. If that's the case, why do so many retailers fail to understand that to succeed they must provide customer-centric services. Whichever channel I interact on must know who I am, what I've bought and what my previous interactions have been. Not only will this impress the customer (or spook the more wary), but it will also provide extensive and valuable marketing intelligence and the opportunity to target customer segments and personalise the customer experience.

Not only that, but as the Banking & Finance industry all too well know, the future share value of an organisation will be proportional to the quality of customer data it maintains. (I know somebody else said that, but not sure who - anybody?)