April 2, 2004, 12:00 AM

The Cross-Channel Ideal

(Page 2 of 2)

Because Jenson wanted to limit the amount of integration work it would have to do with its existing software, it decided to go a with an almost completely new application suite from CommercialWare, Cachat says. “They offered to integrate with our existing systems, but we want to keep integration work to a minimum,” he says. “So they gave us a turnkey system of new applications.”

No more manual

That route required Jenson to migrate existing data, including inventory and POS records, into the new application suite, but resulted in tighter integration and smoother data flow, Cachat adds. The only existing application that remains is Jenson’s accounting software, which the company plans to replace at a later date. For now, the accounting software does an adequate job of organizing financial records, even though Jenson must still physically enter sales and other financial data into it-steps that will be automated once a new application is integrated into the CommercialWare suite, Cachat says.

In addition to inventory availability across channels, retailers must also be able to deliver customer service across channels. Retailer Lamps Plus has, among other things, automated the way it sends order status reports to customers-whether they place their orders on the web, through the call center or at a store kiosk, says Clark Linstone, Lamps Plus CFO. Lamps Plus uses a multi-channel integration system hosted by Escalate Inc. Before using the Escalate system, Linstone says, Lamps Plus would take multiple steps to pass order and fulfillment information between order management, customer service and fulfillment personnel before generating a shipment label, a tracking number and a confirmation e-mail to a customer. “It was a very manual system because the technology systems didn’t talk to each other,” Linstone says.

Low touch

Now, once a customer enters an order on the web or at a kiosk “it goes through the entire process without anyone touching it,” Linstone says. The system automatically combines a shipment tracking number with the customer e-mail address tied to the order and generates an e-mail message that gives the customer the status of the shipment and information on how to track it. “We used to get many questions like, ‘When did my order ship?’ so now we don’t have to involve a customer service person in that kind of phone call or e-mail question from a customer,” Linstone says.

Like CommercialWare, the Escalate system can be run either on a retailer’s own server or hosted by the vendor. To license the software for a user’s own server costs $200,000 to $300,000, depending on size, plus one-time installation and training fees of $50,000 to $150,000, according to Escalate CEO Michael Ker. For a hosted system, Escalate’s average customer pays about $20,000 per month based on volume of orders, plus a one-time fee of $50,000 to $150,000 for initial integration and training services.

Just like everything else having to do with retailing, analysts caution against the one-size-fits-all approach. Retailers should take a hard look at the kind of multi-channel integration that their own customers want, LakeWest’s Gupta says. “The key is understanding your industry and your customer,” she says. “In some segments it’s become a requirement to have a high degree of integration. If a customer places an order for a TV on BestBuy.com, he expects to have the option of getting it shipped or picking it up at a store. But if he’s buying a suit at a store, it’s not as important to have a multi-channel experience.”

paul@verticalwebmedia.com

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