February 4, 2004, 12:00 AM

SPONSORED WHITE PAPER: Multi-channel integration

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Seamless electronic order entry has allowed Eddie Bauer to significantly increase the efficiency of its e-commerce customer service representatives and reduce processing costs. But more importantly, Fry and Eddie Bauer used the web order interface device as the catalyst to build a common e-commerce platform that is helping the retailer expedite multi-channel integration.

For instance, Eddie Bauer can determine which customers are redeeming online coupons or gift certificates at certain stores, assess which shoppers are using the online version of its catalog, and track who is clicking on EddieBauer.com and staying to visit other shopping portals such as Eddie Bauer Home or Eddie Bauer Outlet. This single view of customers ultimately helps the company design merchandising and promotions that deliver a better customer experience.

Better multi-channel retailing

Better data, integrated systems, and creative design and branding standards help the retailer give a common look and feel to its merchandising outlets, while enabling business units to track the progress of specific sales plans or merchandising strategies.

"Implementing a centralized, services-based architecture,” Pataro says, “and establishing unique shopper identification numbers that reflect all activity-regardless of channel-are critical steps that enable retailers to compare customer behavior online with what`s happening in the catalog and in-store."

While there are common steps, developing a multi-channel retail strategy isn`t a cookie cutter process. “There is no one-size-fits-all approach that merchants can use to integrate their offline and online retailing segments,” says Bridget Fahrland, executive creative director of Fry. “The key is to start with the consumer rather than the technology.”

To that end, Fry recommends that retailers create “multi-channel consumer scenarios” as part of their design process by considering how and when consumers will use channels. Fahrland notes, “It’s not about having ‘everything everywhere’ it’s about providing the right information, tools, and products in the right channels. Multi-channel is not about echoing-it’s about harmonizing.”

Personal Creations, for instance, uses an online store and a catalog to sell seasonal and specialty gifts. Four years ago, e-commerce accounted for only about 10% of the retailer’s total sales, but Internet revenues are now more than 50% and growing. As a multi-channel retailer, Personal Creations sees equal value in offering customers a strong catalog and an e-commerce channel.

Personal Creations built its web store to reduce the cost of printing and mailing catalogs and manual order taking. But working with Fry, PersonalCreations.com has evolved into a retail channel that identifies catalog customers as well as drives online sales.

A newly designed site, featuring Fry’s Microsoft-based e-commerce solution Flagshiptm, is enabling Personal Creations to do a better job of cross-selling merchandise and to hone its catalog merchandising. A new cross-sell feature on PersonalCreations.com lets customers order catalog items from the web store, while analytics tools and personalization applications built into the site’s back end identify other merchandise that customers may be interested in purchasing.

Once the purchase has been made, the transaction is added to historical data that helps Personal Creations refine its merchandising strategy. Catalog sales benefit from the online analytics because Personal Creations uses its web store to test merchandise for inclusion in catalogs and refine text and images before publishing new editions.

A testing ground

“Each of our channels has its own strengths and weaknesses, but the Internet is helping us do a better job of integration and identifying who is shopping with us and where they are coming from,” says Personal Creations president of e-commerce and new business development Geoff Smith. “By using the online store as a testing ground to get a better handle on how customers are interacting with us, we can improve our contact strategy within each channel, improve our overall sales and reduce marketing costs for the business in total.”

Personal Creations considers its multiple channel retailing experience a success. With a more uniform brand, better systems integration and a keen understanding of how customers are interacting with its two channels, Personal Creations has in the past two years increased its online sales conversion rate by 25%, reduced checkout abandonment by 10% and reduced catalog marketing costs.

But as other retailers seek to achieve the same integration success as Personal Creations, they must bear in mind that true multi-channel retailing is evolutionary-not revolutionary. Eventually most catalogers will achieve what Fry defines as “phase three” multi-channel retailing. At that juncture, stores, catalogs and e-commerce sites are linked with integrated computer systems and stocked with the same assortment of merchandise, which is universally priced and available in abundant quantities. Phase three also provides customers multiple access points to all channels.

Phase three multi-channel retailing means customers can use in-store kiosks to shop online or from the catalog. They can order online and pick up in the store. They can redeem coupons and gift certificates across any channel. It also means retailers know exactly how their customers are shopping because each shopper receives a single identification number by which cross-channel activity is recorded. That, in turn, translates into better customer service because the retailer knows every interaction it has had with a customer. Further, phase three means consistent systems integration, giving merchants a single view of inventory management and availability across all channels.

Retailers can succeed with channel integration in a number of ways using Fry as a strategic planning and project management partner. Fry offers solutions for merchants of all sizes, such as a suite of managed services including hosting or a turnkey package that can include strategic consulting, information design and usability, creative design and branding, application/systems integration, and data reporting and analysis.

Fry is also launching packaged services such as Open Commerce Platform, a standardized system with reusable components that support multi-channel merchandising, membership, personalization and content management initiatives.

“Phase three is the future,” says CEO Fry. “Multi-channel retailing is truly accomplished when merchants have a 360-degree view of the customer that reflects all shopping activity and enables each shopper’s experience to be personalized and enhanced. That’s the Holy Grail of channel integration.”

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