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