Will mobile Twitter apps mean a decline in SMS?

As I began yet another tweet from my iPhone, the thought struck me - I wonder if there'll be a decline in SMS? Surely SMS is what Twitter was modelled on in the first place given its message limit?

I also remembered the reports suggesting that traditional email traffic was seeing a decline as Facebook users began utilising FB mail. I wonder if the same is true of the IM services?

I wonder if the Mobile Marketing Association (MMA) have spotted any trends since Twitter growth spurt?

What are your thoughts?

Getting a shared basket between brands right

Over the last week or so I've been doing some consulting work for a retail group that has a multitude of brand identities. I've been working with them on their eCommerce strategy and one piece of functionality they're keen to introduce is a shared basket across their various branded sites.

I seemed to remember that Gap had done this for their Banana Republic, Old Navy, Piperlime and Gap branded sites. The Client referenced AH in the Netherlands as an example.

So, I thought I'd take a look at the Gap site and what the general perception of how successful it had been. I found an article by eConsultancy dated January 2009 which referenced Foresee's Online Retail Satisfaction Index report indicating that Gap had seen a fall in satisfaction since the shared basket went live, citing:

"This feature may not have been important to Gap’s online customers to begin with because they may view the other brands differently in terms of price, quality, and style"

Interestingly, taking a look at the AH brands and how they've implemented shared basket, I would expect it to be quite a success. They have clearly differentiated product assortments between the brands sharing the basket; Groceries vs Wines vs Telecoms vs Photos.

The key point here and probably a lesson Gap are learning, is that when you make it easy for your customers to compare between your brands with similar assortments at different prices, in this current climate it will inevitably lead to sales cannabilisation as their customers defect across from the higher cost brands. I'm sure it's probably led to an uneasy political atmosphere as the lower cost brands exceed expectations, whilst the higher cost brands fall short.

Whilst there maybe some overall benefits in sharing IT infrastructure, as I have advised our client, be careful which of your brands end up sharing the basket, particularly given the similarities between their assortments and their online pricing models!

Multichannel Retail Roundup

Having watched my Google Alerts stack up, I thought it was time for another brief round up with a couple of highlights from what I've been reading recently...

Cranfield School of Management's view on what it takes for Multichannel Success
This recent article on the MyCustomer website caught my attention. An interesting article and a surprise to find a Management School article with a focus on technology.

As I pointed out in the comment I left, whilst I agree that integration forms a large part in terms of gaining single view of several important data elements, the real hurdle within long established retailers is securing stakeholder buy-in and funding. This is made much more difficult if the organisation is siloed and the stakeholders you are targetting do not have incentives to encourage cross-channel behaviours.

A nice cross-channel customer service anecdote
RightNow's CEO, Greg Gianforte, posted a nice anecdote on his blog of a recent experience with iRobot's customer service. It's an area I'd not paid a great deal of attention to, but it's just as important as your multiple sales channels - having a joined up aftersales customer service will generate brand loyalty and increase your customer retention.

An elegant definition of Multichannel vs Cross-channel
This interview with Kevin Ertell is an interesting read. A couple of good points in there, namely the difficulty in measuring conversion rates as retail websites evolve beyond just simply selling stuff to us and I had to quote this too:

“Multi-channel” is more than one channel while “cross-channel” is leveraging the strengths of each channel to create an overall customer experience that is greater than the sum of its parts.

Kevin has also picked up on a growing view that mobile will find a use in-store, providing the ability for customers to make purchase decisions based upon reviews, recommendations, etc right from their mobile phone. I believe Bazaarvoice's Customer Reviews offering comes out-of-the-box with the capability to deliver reviews via mobile phone.

A discussion on Web access within the store
RetailWire have published an article on web access in-store (registration required). However, it's not the article that's particularly interesting, it's the subsequent discussion. Several of the panellists hit upon the theme that customers will evolve to use their mobile smartphones if they want web access. I'll admit I don't use my iPhone as much as I should whilst shopping in-store, but that's currently because the Apps aren't necessarily there yet. It makes sense for stores to be spending their scarce budgets on targeted mobile apps (reviews/recommends, store locator, stock checker), rather than trying to deploy kiosks out in their store estate. As stated by a couple of the panellists, those investing in store technology need to be aware that mobile applications are coming and are likley to be adopted by their customers before the accountants have depreciated those in-store investments!

UK Retailers on Twitter

It's hard to miss Twitter at the moment, there seems to be dozens of posts and news articles appearing on a daily basis right now... and yes, I know I'm adding to that.

However, going through my recent Google Alerts, I chanced upon an article by eConsultancy. They're constructing a list of UK retailers on Twitter. Interesting to see a lack of presence from the big name high street retailers, though I'm sure that will change with all the current Twitter hype.

One question in the comments asking whether tweeting about offers, promotions, etc was well answered. Whilst it's valuable in terms of visibility (possibly even early visibility for those loyal twitter followers), it still needs to be combined with an engaging stream of tweets to keep people interested and engaged.

By the way, I've been tweeting myself over the last couple of months. You can follow me @mc_musings.

The Current State of Cross-Channel Retailing: Part 2

Continuing my review of RSRs “Cross-channel Retailing for the Anytime, Anywhere Consumer” benchmark study on the current state of multichannel retailing, I'll take a look at the inhibitors and technology enablers sections of the study.

Obviously a major concern for retailers currently is the impact of the economic climate, though the study does highlight how the retail winners differentiate themselves from the rest of the pack during these difficult times, “Winners know that other retailers focus inwardly in stressful times, looking for ways to cut costs and laying low until external conditions improve. Winners however are unwavering in their focus on the consumer.” Investing now whilst their competitors haul down the shutters will put them in good stead for the upturn in the economy.

The top 2 identified inhibitors to becoming an efficient cross-channel retailer indicate the survey respondents recognition that becoming customer-centric is key, as opposed to product and location:

• Inability to effectively use customer information for cross-channel marketing
• Do not have one view of the customer across all channels

The studies section entitled, “Organizational Resistance is Tenacious and Lingers On” highlights the continued issues with getting the organisation onboard with multichannel efforts. I've recently read the book “Fast Strategy” which discusses approaches on how organisations can become more agile, giving examples of recent tech company successes to allow them to adapt quickly to market forces. I wonder how some of these approaches could be applied to Retail.

Retailers are attempting to address their inhibitors, though a later graph in the study suggests there's an opportunity to greatly improve, with 67% of respondents suggesting they still have work to do synchronising customer and inventory information across channels.

On to technology...

Another clear differentiator between retail winners and their competitors becomes apparent when asked about their approach to managing cross-channel data. 52% of winners enter product and customer data into a single system of record and move electronically in to other channels, whilst 71% of their competitors are still entering that information seperately into each channel - clearly the winners have optimised their data processes.

The study highlights how retailers view the importance of real-time customer and inventory data and the need for cross-channel content and product information management, but interestingly the third most important is a modern eCommerce platform. It would be interesting to find out what retailers believe to be a “modern eCommerce platform”, what feature set do they believe such a platform should comprise? Do they think these modern platforms require more Web2.0 features? Or is this a refelction that they feel their eCommerce platform capabilities require further investment?

As discussed in my previous posting, few retailers see adding channels as important in the current climate with a distinct view that mobile is most definitely low on that list. Only 4% of Retail Winners considering it very important, even though mobile operators are predicting significant growth in this area. Could this be the retailers are holding their cards close to their chests, or are the mobile operators just trying to encourage a market in its infancy?

To summarise some of the key recommendations from the study; Winners will continue to invest during this downturn and emerge even stronger, with the help of technology vendors and some creative financing options. Though there are still some key challenges, the most significant, the lingering issue of organisational change to support cross-channel initiatives. To address this will require new metrics and processes to aid alternative compensation structures and promote cross-channel behaviours and attributes.

What are these metrics? The need to track a customers journey across channels and their spends, what product did they browse on the website? Did they go on to buy that product via an alternate channel? – this should be easy for an integrated web to store/phone journey where those channels share that customer information and have the ability to identify the customer at point-of-sale. Though I suspect from reading the study there aren't many retailers out there with that kind of sophisticated integration, or have even considered it a metric to measure – I look forward to being proved wrong.

Again, for full access to the study see the Retail Systems Research website.

The Current State of Cross-Channel Retailing: Part 1

Over the next couple of postings I'm going to review this years annual Retail Systems Research survey on the current state of multichannel retailing and some of the interesting stats the report uncovers.

This years survey results reinforce the analysts and many industry pundits views that multichannel customers are more profitable than single channel customers – 56% of the surveys respondents felt this was the case. However it appears that many retailers can't actually quantify this as 29% still don't know whether their multichannel customers are profitable or not!

The survey continues the growing trend in using the term 'cross-channel', including it in the title, “Cross-channel Retailing for the Anytime, Anywhere Consumer”. What's nice about this report is the use of the term in context, identifying cross-channel with the behaviours of the customer and multichannel with the underlying systems. It also highlights the focus on the brand, particularly with this great phrase – "the brand is the value, and the channel is how the value is delivered".

It would appear that the survey respondents are switching on to the importance of brand and that customers shop the brand not necessarily the channel these days – 76% of the respondents see creating a single brand identity across all channels as the most important opportunity to improve customer satisfaction.

However, only 20% believed it very important to explore new channels, e.g. mobile. This is probably an indicator of the current economic climate and the focus on strengthening foundation channels, or perceived barriers to entry for new channels. This is still quite a surprise, given that International should be considered an additional channel and with potential brand saturation in local markets, international expansion should be more appealing in their efforts to counter balance shrinking local revenues.

An interesting observation is that 40% of what the survey refers to as Retail Winners are fulfilling online orders from the stores. To me, this is not a scalable model – as volumes increase there's a serious risk of cannabilisation of store inventory, leading to dissatisfied local customers. Where's the incentives for that Store Manager to promote cross-channel behaviours and attributes?

The report uncovers some clear benefits to enabling cross-channel processes and behaviours. Here are some highlights below, I suggest downloading the report from RSRs website for the full picture.

- 40% report a 2-5% increase in eCommerce profitability
- 20% report a 5-10% decrease in warehouse space requirements
- 31% report a 5-10% improvement in gross margin percent
- 22% report a 10-25% sales lift on cross-channel promotions

Multichannel Retailing Reference Architecture: Update

The Multichannel Retailing Reference Architecture

This is a minor update to the architecture after the comments on the original posting. I've now added the 'Decision Support' component.

This component should contain the enterprise-wide reporting and Business Intelligence (BI) tooling not encompassed in any of the other components, such as the CRM. Ideally all reporting and BI should be performed using this component, though the reality is that many application packages will provide their own specialist reporting tools that may be better suited to the job at hand. These tools may be best placed for operational reporting, whereas the tools within Decision Support will be for non-operational reporting, such as data mining historic information and trend analysis.

The challenge here will be deciding what should be considered as operational and non-operational data. One possible approach could be as follows.

Partition the 'Master Data' in to two areas; Operational and Historic. The Operational Data Store (ODS) may enforce a policy of containing only 13-months of data, whilst the Historic Data Store (HDS) may contain all older data. Of course, each entity in the ODS may have data of varying age due to legislation and compliance issues, much as data in the HDS will also be governed by such factors. From a cost perspective the HDS may go further and implement Information Lifecycle Management (ILM) techniques to store the data, e.g. 1-3yrs online, 3-7yrs automated/retrievable offline, 7+yrs offline/offsite.

The tools providing reporting on the HDS are always likely to be generic, it's more cost-effective than having secondary instances of each of the business applications for specialist reporting on the historic data. However, this is where there will always be the challenge of the business user requiring the same level of reporting they have on their operational data. Though this frustration can usually be circumvented by demonstrating the data mining and flexibility of the BI tools. The only time it may be necessary to provide secondary instance of a business application against the HDS is for legislative compliance. A recent example I have experienced was to ensure a despatch system could reproduce all labelling for any customer orders shipped internationally for a period upto 7 years. To achieve this, we had a secondary instance of the application configured against the HDS that would only be started upon business request (e.g. during an audit) and agreed with the application vendor that this would not constitute the need for an additional software licence. A cost-effective solution, satisfying both the business stakeholders and our IT budget!

Multichannel Retail Roundup

This is the first in what I hope to make a regular spot on the blog where I'll be rounding up and summarising articles, blog posts and generally any content that's caught my attention relating to Multichannel Retail. Hopefully you'll find some of it interesting and of relevance.

UK Retailers continue to invest in multichannel programmes
First up is this recent article documenting the multichannel round table debate hosted by BT Expedite. Looks like it was a very open debate, with some great soundbites captured and addressing some common issues across retailers. I particularly like Andrew Clarkes comment relating to TopShop not becoming a social networking site, which RetailWeek decided to highlight in a callout. Reading between the lines it sounds like there could be some disagreement on strategy there between the parent and operating company. Another notable mention in the article was Comet's click to chat, whilst they were reluctant to give out figures the article seemed to suggest they've seen a measured impact on conversions. As a slight side on this, an ATG partner recently implemented a callback feature for a Health Insurance client. An email was automatically sent to the call centre when a customer abandoned their application, the call agent contacted the customer to see if they could be of assistance - this resulted in a 17% reduction in abandonment, imagine something similar for an online retail site as part of checkout abandonment.

How a Company’s Culture Can Affect Efforts to Integrate Channels
This article published by Retail Systems Research provides an interesting insight in to the multichannel strategy of US retailer, Bare Escentuals. Clearly hampered by their US growth strategy, whilst complex was primarily product-centric and store based (typical of most traditional brick'n'mortar retailers world-wide), are using their EU and Asia expansion to implement their multichannel vision. The final objective to migrate their US operations to the multichannel model once it has proved itself. This is a relatively risk free approach, as it removes any potential impact on their currently successful, if slightly hamstrung, US business.

Blog: Mobile Retail - Coming to any store near you
Finally in this roundup, a fellow blogger's post on mobile retail and the recent Forrester Report. Some nice references to recent mobile retail applications and how consumers are now using mobile devices more and more to inform their buying decisions whilst on the move.

Crowdsourcing and Online Retail

Before leaving the house this morning I caught a TV news article about http://www.galaxyzoo.org, a new website asking the public to help classify star systems and spot oddities in the vast number of photographs scientists have of the universe. What a great use of crowdsourcing I thought, how could online retailers benefit from such concepts?

An obvious example might be a competition to design a new product, similar to Walkers recent efforts to get the public to define new flavours of crisps.

Possibly slightly less obvious would be to address a couple of issues most website managers would profess to having, search result relevancy and product hierarchy. So, how about having something similar to Googles new additions allowing your users to rank site search results
or comment? Or allowing users to re-categorise products? It would be an interesting experiment to see the affects on conversion rates. The theory being these would improve as the customers with common interests improve each others routes to find products.

Using Social Media to drive footfall and customer retention

I've just been reading Joe McKendrick's SOA blog over at ZDNet where he's been blogging from the Microsoft Fastforward conference in Las Vegas. He's described what he calls the LIFT phenomenon; Linkedin, Facebook and Twitter.

I was thinking, with a good Social Media marketing strategy in place a retailer could really benefit from these platforms, gaining insight, introducing rich interaction with their followings.

Many retailers have RSS enabled their websites, but what if it were just as easy on their eCommerce platform or Enterprise Marketing Mgmt (EMM) tool to click a box when creating that latest and greatest promotion and it to appear directly on those Social Media sites?

With the advent of FaceBook Connect and the Twitter APIs that shouldn't be so difficult should it?

If these customers have already pledged allegiance by following on Twitter or becoming a Fan on Facebook, imagine how special they'll feel if they're always the first to know about special offers and discounts.

Multichannel Poster Child: Argos

Here in the UK one of the retailers regularly held aloft for being a successful multichannel retailer is Argos. Pioneering kiosks, click & collect amongst others.

However, compared to most store based retailers, Argos have a couple of distinct advantages:

• Each store is effectively a mini warehouse with tight stock control
• The customer journey is almost identical across all channels

Let's take the latter point and observe the typical in-store customer journey...

1. Customer enters the store and is presented a catalogue to browse through
2. Products of interest are placed on a list and can be checked for availability
3. Customer takes the list to the checkout and pays
4. They now wait for the product to be picked from the local warehouse and delivered to the collection desk in the store

Does that all sound familiar to those of us working on eCommerce websites? How easy must that have been to transfer this business model to the web and phone ordering? "Hey Joe, this Internet thing, how do we get ourselves on it? - Heck! It's just a virtual version of our store with a large warehouse attached, we just need to get the home delivery logistics in place"

Having only display stock on the shelves means they must have much more accurate stock visibility, none of this late check in of received stock only for it to already be out on the floor and half of it already gone! (of course this wouldn't be issue if there was real-time reconciliation between ePOS and stock management systems, as well as automated check-in).

Such stock accuracy means cross-channel functionality such as 'Click & Collect' can be implemented with confidence.

The Multichannel Retailing Reference Architecture

NOTE: I've updated this to include the Decision Support function, see the MCR-RA Updated post

For a while now, I've been pondering over what the ideal Multichannel IT architecture might look like or for want of a better term, the Multichannel Retailing Reference Architecture.

At the very highest level it might look something similar to my diagram below.

Whilst very high-level, I have attempted to address the business functions for a retail organisation rather than cross-cutting IT concerns, such as security, systems management and monitoring, etc.

The key element to this diagram is the horizontal 'Business Interaction Services' layer that separates the vertical business systems from the 'Sales & Fulfilment Channels'. By decoupling the multiple channels from the underlying business applications through a single consistent set of interactions, customers, employees, suppliers or business partners can interact with the business across any channel consistently. What I'll now attempt to do is give an overview of each element.

• Sales & Fulfilment Channels - these are the selling channels to the customer, such as Web, Phone, In-store POS, Mobile, etc. However, I have also placed fulfilment channels here too, the idea being that 3rd parties providing dropship fulfilment services, build-to-order services or logistics will interact with the retail organisation preferably through a subset of the Business Interaction Services. It also gives the opportunity for a flexible fulfilment network.


• Business Interaction Services - this horizontal layer provides a common data/services model for the whole enterprise and in a manner that can be easily expressed to non-IT people during the design phase of applications. A catalogue of services should be maintained and governance in place to ensure re-use of services and removal of duplication. In providing this layer it ensures consistent interaction with the core vertical business systems between the sales and fulfilment channels. Whilst a service may be interacting with multiple business systems to fulfil a channels request, it will appear seamless to the end user. As an end user moves between interaction channel, the selected channel will present the same services and information in an appropriate form, e.g. on an ePOS display, mobile PDA, Kiosk or Website. It should be made clear that this may not have to be a technology layer, but could simply be a catalogue of the interaction services provided by the underlying business systems, though typically due to legacy business applications it will almost always need to be a technology layer!

The reality these days is the 'Buy vs Build' tenet manifesting itself in sets of packaged or best-of-breed platforms, delivering business systems for specific functions of the retail organisation. Those vertical components in the diagram above represent these. In most cases, the business units being supported by these systems will access them directly rather than via a channel or the business interaction services (E.g. Call Centre staff accessing the CRM platform, Distribution Centre staff accessing the Warehouse Mgmt system).

• Warehouse Management - this function would be in place if the retailer manages its own warehouses, this may also be extended to logistics fleet management. Here we would see processes and services for picking, packing, dispatching and individual warehouse inventory management.


• Customer Relationship Management - a broad function, covering all customer contact - inbound calls, website visits, outbound marketing, etc. It is this function that understands and develops the interactions with the customer. It will also manage the single view of the customer, providing services to the channels for creating and manipulating customer information.


• Product Information Management - the central management of the product life cycle, here is where the product master data is managed ensuring the product data is available for consumption by all channels. This capability will also manage rich content associated to product; images, video, baseline descriptions (the channels may enrich this with localised content appropriate to the channel). One approach may be to hold this as a central catalogue and for channels to take a subset of products and localise their content.


• Order Management - providing the capability to capture and manage a customers order centrally. Ideally, the order management platform would also provide fulfilment planning to determine which home delivery enabled warehouse is best placed to process a customers order. For Global organisations (and dependent upon their organisational design) this would provide services to 3rd party fulfilment partners or their separate operating companies fulfilment operations via the business interactions service layer.


• Finance & HR Management - these core capabilities, typically implemented through the use of an ERP system, are unlikely to be exposed through any of the channels (though could be to streamline processes between the organisation and 3rd parties).


• Content Management - whilst product related content should ideally be managed within the product information management business systems, non-product content would be managed here. Examples might be marketing materials, property digital assets, non-channel specific content. A catalogue of core content could be created here, allowing channels to select content appropriate to their channel or locality and re-purpose as required.


• Retail Operations Management - this vertical contains all the systems for managing store processes, examples might be range planning, store planning, workforce task management. Again, whilst not necessarily obvious to expose processes through the business interaction services, it may be beneficial for optimising interactions with third parties.


• Master Data - the other most important part of this architecture is securing the single version of the truth. Ensuring only single data stores for each key logical data entity for the organisation. To retain integrity of that data, one of the business systems should be made responsible for maintaining that master data entity and access/modification of that data entity only possible through the services exposed by that business system.


• Technical Interaction Services - These services are provided as an alternative to the business interaction services layer, supporting legacy business systems, suppliers and partners that cannot interact through the preferred business interaction services layer. Use of these services should be kept to a minimum, though whilst transitioning to this architecture this is may be impossible to avoid.

A couple of technical points to labour; ensure loose coupling between channels and core business systems, and that a business system masters the data and access to that data is only achievable via that business system. The former will allow flexibility and choice of channels and the latter will enforce data integrity.

Of course, it doesn't take much imagine to compare the above to what we in IT commonly refer to as Service Oriented Architecture (SOA). However, given recent reports of the imminent death of SOA, at least as a term, I thought I'd avoid using it in my diagram and descriptions ;o)