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Multi-channel....one of our passions
Submit On: 01-03-2010

Multi-channel retailing is an often used term, with many referring to the use of websites and online technology. In real terms, multi-channel retailing is essentially the consistency of each channel as it is linked to the overall retail strategy.


Over the last 12 months, many international retailers have been getting this right; examining all aspects of their business with reference to a multi-channel mantra. This means: new online teams, new KPI’s for business units, a multi-channel figurehead or champion and a general understanding that multi-channel isn’t a short term project; it’s a new strategic element that runs alongside existing strategic measures. One facet of a multi-channel strategy is a website or online presence. This has clearly been commonplace amongst most businesses over the last 20 years and more recently the value in a website has been to provide detailed product information for consumers to view before coming in-store.

The online-offline connection has been made by many analysts, with leading retailers actually being able to track the dollar spend that is influenced by online channel in an in-store environment. US department store, Macy’s, has stated that every dollar of online sales influences almost $6 of sales in-store. Macy’s predicts that online sales would reach US$1 billion by the end of 2009, with the potential to significantly contribute to in-store sales also.The links between these two channels are so important, and a major frustration for customers is that information they view online is not up-to-date once they reach the store. If price and quantity information is part of a retailer’s online offer, it is essential that these figures are linked to stock-on-hand figures and price changes are reflected. This frustration is also applicable when talking about Smartphones.

The increased presence of Smartphone’s will have a significant impact on retail in 2010. Some recent trend figures highlight that for consumers the importance of shopping via their phone will no longer be limited to downloadable ringtones and games, but the purchase of books, apparel and other items associated with online shopping are growing. The fusion of mobile and social networking and the growing demand for apps (among both consumers and brands) will continue unabated. In fact, location and social aware apps and utilities will be a key avenue for brands looking to engage consumers on the go.

As well as mobile phone applications, the launch of the iPad also presents a new dimension for consumers and for business. It integrates publishing and media in to a mobile platform, with the sales of the tablet sector expected to exceed 20 million, making it a $10 billion a year market.  One of the fundamental changes happening in mobile computing and communications is the migration from living in a ‘two mobile device environment’ with most people having a notebook and a mobile phone to a ‘three mobile device environment’ with most people having a notebook to create and manage content, a tablet for eBook reading and rich media playing (videos, TV, movies), and a mobile phone for calling and messaging.

We’ve seen the emergence of three primary ‘screens’: a television screen, a computer screen, and a phone screen. And some technology companies have tried to blend the two mobile devices into one: the notebook and the mobile phone. But the challenge with the mobile phone is the small screen and processor, and the inability to visually interact. And until the release of the iPad there really hasn’t been a quality combination of size, visual experience, user interface, technology and technical capability, in a tablet-style device. The iPad presents a paradigm shift, it allows people to enjoy true multimedia in a mobile way. That ultimate shift is the move towards a kinetic format that blends information in a way that’s entertaining and useful – and does it in such a way that people won’t want to be without it.

Customer expectations

In terms of customer service, a recent study by software company, RightNow Technologies, found that consumers are opting for self-service and live-chat functions over traditional methods of communication. The study found that when it comes to making online purchases, half of consumers prefer to find information on products or services via the retailer’s website and support pages. This is followed by 19% who would rather email customer services and 18% who would rather call customer services.In terms of a live chat function, more than 64% of consumers who have engaged with an agent through a chat session said they would rather use this channel than speak with an agent on the phone. 69% said they would prefer to use chat than email.

Most importantly, nearly three quarters (74%) of consumers stated that chat has a positive impact on their purchase decision, with a fifth making a purchase straight away while a quarter of consumers said they purchased later on.Looking at consumer perceptions about retailers’ multi-channel customer care, the study found, while consumers are generally happy with the interaction channels retailers provide for service and support, such as chat, email, phone and web, more than half feel that improvement needs to be made to the consistency of information provided across those channels. The survey found that where consumers have contacted a retailer via a number of channels about the same query, only 25% had received consistent responses.With the advent of sites like Twitter and YouTube, the survey found that getting the multi-channel customer experience right is more important than ever before.

Following a bad customer experience with a retailer, half of online shoppers feel duty-bound to warn others about the pitfalls of doing business with that retailer. 16% stated they communicate negative experiences specifically to stop other people buying from that particular company. Meanwhile, 30% want to vent disappointment at how they’ve been treated. This was recently our position here at Josem Consulting, when we were so incensed at the lack of service from the Lenovo computer manufacturer, that we just had to go online and talk about it, to read more about our experience see www.lenovoreview.net

Whilst the Internet is a growing channel for communicating poor customer experiences, the survey also found that it offers retailers an opportunity to interact directly with consumers on a one-to-one basis. Far from being regarded as a ‘Big Brother’ tactic, 78% of online shoppers said; yes, organisations should listen to what customers say about their products and services on social networking sites and follow up with those people. In fact, 60% said it’s entirely acceptable for retailers to monitor consumer comments on social networking sites and then make suggestions about relevant products or services

Luxury Retail

There is one category where an online presence is minimised: luxury apparel. While numerous studies have argued that affluent consumers spend more money online than any other market, many luxury retailers are still wary of accommodating their customers on the Internet. The fear remains that the Internet will dilute the exclusivity of luxury brands. But, some organisations that always avoided the Internet now at least have websites. Others, such as Ralph Lauren and Tiffany & Co. have fully embraced e-commerce. Many companies are now even developing social networking strategies. But many of the cyber-space efforts are inconsistent with brands such as Louis Vuitton, Yves Saint Laurent and Alexander McQueen selling some stock online, selling some product only in certain markets or not selling anything but accessories online. Even though many of their products are available on outside websites, such as Net-a-porter.com.

Whilst luxury markets hold back, many others in the retail space are getting right into multi-channel, and below are a few examples:

  • Walgreens has recently re-launched their website, ahead of their multi-channel strategy. The new website introduces innovative features that make managing Walgreens prescriptions online easier, as well as photo service enhancements, new mobile applications and a selection of interactive tools to help consumers better understand and monitor their health, all forming part of a more holistic online solution. Managing pharmacy solutions online has been a major part of the overhaul, with customer now able to order prescriptions repeats online, with the ability to choose the pick-up location, time and date. The prescription service will also notify customers when repeats are due and in some cases will automatically generate the prescription, notifying a customer when it is ready for pick up. Customers can also check availability of non - prescription products at local stores. Another major business unit for Walgreens is its photo services and the new website makes this service more accessible for online users. A new ImageUpload tool allows customers to add images to their online photo albums, making it easier to order prints, share photos and create personalised gifts. Photos and albums can be readily shared through e-mail and a wide variety of social media sites, including Facebook and MySpace.

  • Toys ‘R’ Us in the US has introduced many new multi-channel offerings for customers, accessible via mobile and the web. Customers can now purchase instantly online via their mobile phone and home computers as well as being able to locate stores on the run via the new store finder tool. Whilst in-store customers can check if items they’re interested in are in-stock, and if they aren’t the customer then has the option to purchase online. Customers also now have the benefit of immediately consulting the millions of customer reviews and ratings on the website when making purchase decisions in-store.

  • An innovative new website, Milo, allows people to find out where to buy things offline. Shoppers simply enter something they want to buy and a nearby location and the site presents a description and reviews of the products and a list of which local retailers carry it and which have the item in stock. The site is currently operational in the US only and plays on the idea that people actually prefer to touch a product before buying it and want instant gratification instead of waiting for it to be shipped. Milo incorporates other useful aspects of shopping online, like ratings, reviews and price comparisons, and makes it less likely that a shopper will go to a store only to discover that an item is out of stock. As a result, stores have improved their systems for updating their inventory in real time and retailers such as Best Buy and Nordstrom are currently participating.

  • With loyalty programs gaining increased popularity in the Australian market, an online community has emerged to allow Australian customers to organise their loyalty programs in one place. As an interactive online community, Perkler.com includes feedback from members that retailers can use to monitor consumer response to loyalty programs. It is also able to provide marketing for businesses that don’t collect data about their members. Members can tailor their updates to match their interests and location, streamlining the deluge of offers they receive in their inbox and reminding them of special deals. Research conducted by the site prior to launch showed that 82 per cent of Australians are members of loyalty programs but are unsure of how to make the most of the rewards they offer. There has been some interesting research conducted on the success of various loyalty programs, suggesting that non-monetary rewards create more loyal shoppers. For more info, please see the academic article entitled “Are Women More Loyal Customers Than Men? Gender Differences in Loyalty to Firms and Individual Service Providers,” Valentyna Melnyk, Stijn M.J. van Osselaer, & Tammo H.A. Bijmolt in the Journal of Marketing, Vol. 73 (July 2009), 82–96.

  • Outdoor apparel retailer, The North Face, has been having trouble luring shoppers into its stores and is about to embark on a new tactic: sending people text messages as soon as they get near a store. Starting in February 2010, shoppers in and around New York, San Francisco, Seattle and Boston may receive text alerts when they are close to stores. Embracing location-based mobile advertisements is a dream for many organizations, as it gets customers when they are so close to the point of purchase: the store. The campaign uses a practice called geo-fencing, which draws a virtual perimeter around a particular location. When someone steps into the geo-fenced area, a text message is sent, but only if consumers have opted in to receive messages. The service also has the ability to allow The North Face to tailor its messages to the weather. For now, the North Face will send texts about promotions, like a free water bottle with a purchase, and new arrivals, because the company’s gear is heavily seasonal. The North Face plans to eventually send branded texts when people arrive at a hiking trail or mountain to alert them about weather conditions or logistics for a ski competition, for example. It also created an iPhone app called the North Face Snow Report that provides snow conditions and trail maps. To determine a cellphone’s location, Placecast uses techniques including a phone’s GPS signal, location data provided by carriers to companies that sell it to Placecast and information gleaned from triangulating the phone’s distance to cell towers.
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