June 13, 2002, 12:00 AM

Multi-channel retailing offers multi-challenges

Multi-channel retailing may be on all retailers’ lips these days, but achieving that nirvana of retailing is no easy feat, attendees at the DMA’s Annual Catalog Conference heard Wednesday.

Multi-channel retailing may be on all retailers’ lips these days, but achieving that nirvana of retailing is no easy feat, attendees at the DMA’s Annual Catalog Conference heard Wednesday. After two days of talk about the importance of multi-channel retailing, attendees at the Winning in a Multi-Channel Environment session at the end of the day heard about the challenges from Michael Robinson, managing director of Anthropologie.com, a hip women’s clothing and small home furnishings retailer.

“It’s difficult to create a seamless and consistent perception of your company across channels,” Robinson said. “If you don’t achieve consistency, you raise questions in the consumer’s mind. And when you create uncertainty, you create hesitation.”

Among the problems that Anthropologie faces is the fact that each channel owns its own inventory, so each channel adjusts pricing of items depending on whether the product is selling in that channel. Thus an item may be discounted on the web but not in the store. The solution: “We honor all prices in all channels,” Robinson said. “If someone in the store says she saw the item for $5 less on the web, we’ll give it to her at that price.”

Not as easy to solve is the issue of returns. Anthropologie will accept returns in all channels but doesn’t promote that feature because of the headaches. For instance, web and catalog products have 7-digit item numbers while the stores have 16-digit numbers. Thus when a customer returns a web purchase to a store, the sales associate has to look up the item in a book to match the web number to the store number. In addition, customers send store returns to the warehouse, which is not equipped to process them. “The first response in the warehouse was to send the item back to the customer and tell her to return it to the store where she bought it,” he said--not an acceptable response to Anthropologie management. “The problems are ours to solve, not the customer’s,” Robinson said.

Other challenges include:
--Finding the right merchandise assortment on the web vs. in the store. For instance, the web catalog will not sell basics such as lingerie, while the store will. “Retailing is an assortment business, while the web and the catalog are an item business,” he said.
--Implementing systems that work across channels. “Catalog systems are order-taking systems while retail systems are product promotion systems,” he said.

Despite the challenges, the multi-channel strategy is worth it, Robinson concluded. A web site creates new opportunities for customers to buy and adds credibility to a brand, not only by its mere existence as a source of information about a company but also by listing store locations. In addition, Robinson said the lifetime value of a multi-channel customer is three times higher than that of a single-channel customer. “Customers want options,” he said.

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