May 2, 2005, 12:00 AM

Crossing the Channel

Retailers explore new horizons through multi-channel marketing

Famous Footwear, as the largest retail chain of Brown Shoe Co., has the kind of support for its e-commerce operation that many web sites can only dream of: the backing of 930 stores, and hundreds of brands available through its well-capitalized corporate parent.

But the reality of shoe retailing is that many shoppers now begin their shopping on the web, where other retailers can lure them away with equally good or better pricing and levels of customer service. And with the growth of online services like shoe size-finders and free returns from leading footwear e-retailers like Shoebuy.com and Zappos.com, the online pure-plays are grabbing market share in the business of covering feet with fit and fashion.

Daily challenge

It’s a challenge Bill Bledsoe, Famous Footwear’s manager of e-commerce, thinks about every day-and one he’s determined to meet as a multi-channel retailer. “Everyone is aware of Shoebuy.com and Zappos.com and their super customer experience,” he says. “But we offer a good customer experience too-and one that our pure-play online competitors can’t. Our customers can go to a store to try on shoes if they want.”

As Bledsoe and other multi-channel retailers know, getting customers to shop in multiple channels pays off in several ways. “Our multi-channel shoppers spend 88% more than single-channel customers,” he says.

Just as important, the multi-channel shopping experience opens up multiple ways for retailers to engage customers, building relationships with them while capturing vital data on shopping behavior that retailers can leverage for increased sales in each channel. “Our primary effort in marketing is to provide a seamless shopping experience across channels,” Bledsoe says.

If handled right, it’s a positive cycle-the more a customer shops in multiple channels, the more information she reveals on shopping preferences, the more a retailer can lure her back by marketing to her interests with a more consistent multi-channel strategy. “It can remove the variability in how the retailer interacts with customers both online and in stores,” says Rob Garf, retail industry analyst with AMR Research Inc.

Easier said than done

But that’s easier said than done. The challenge, Bledsoe says, remains in getting customers to shop in multiple channels, persuading them to stick with FamousFootwear.com and its sister stores rather than click to one of its competitors on the whim of a better deal. Meeting that challenge, he and others say, requires an effective multi-channel marketing strategy that reaches shoppers through several marketing touch points, including printed and online versions of fliers and other forms of ads, coupons, e-mail, call centers, loyalty programs and gift registries.

But an effective multi-channel marketing strategy requires more than just reaching out to consumers through a range of touch points, experts say. To make marketing messages meaningful to shoppers in a way that builds customer relationships and gets them to buy something, retailers need the infrastructure and methods to pull and analyze data on shopping behavior. “Everyone talks about multi-channel marketing, but many retailers still have some significant technology and process revamping to do to make this a reality,” Garf says.

United data

For optimal marketing resources, retailers need unified data across all channels, he adds, covering customer shopping behavior, order records, promotional programs and inventory availability. The goal is to get marketing pitches, whether in e-mailed coupons or suggestions made by store clerks, tied to something a customer is likely to be interested in.

With many existing e-commerce systems having been built and deployed several years ago, however, it can be difficult for retailers to gather and leverage customer data across channels. “E-commerce systems built six years ago were not that integrated across channels,” Garf says. In the late 1990s, he adds, retailers seeking to quickly capitalize on web commerce rushed to establish e-commerce businesses that operated in separate silos from other selling channels. “The long-term multi-channel implications were often not part of the initial design process, nor did retailers think they had the time to do it right,” Garf says in a recent report on multi-channel retailing. The result is a mixture of home-grown and legacy systems that are often too narrowly focused on a single channel, he adds.

But retailers like Famous Footwear and jewelry and gift merchant Ross-Simons have found ways to capitalize on customer experiences in multiple channels to build customer relationships and drive up cross-channel sales.

Ross-Simons does over $250 million a year through 14 stores, 60 million mailed catalogs and Ross-Simons.com. The web site accounts for more than $50 million in sales, or about a fifth of all sales.

To better leverage customer data across all channels and coordinate multi-channel marketing campaigns, Ross-Simons migrated to a single operating platform from Ecometry Corp. two and a half years ago. The platform encompasses several operations including order management, inventory records, accounting records and marketing campaigns. “Ecometry has been critical to our multi-channel strategy,” says Terry Matthies, vice president of information technology. “Prior to this, we had different systems to separately support our retail stores, our catalogs and the web. Now it’s all encompassed in the Ecometry enterprise system.”

Ross-Simons uses its new platform integration to run several types of marketing campaigns and customer service programs to maximize customer relationships and sales across its three channels. The system supports the retailer’s current strategy of refining its merchandise offerings.

With its history in selling jewelry and other luxury items, the Cranston, R.I.-based retailer has branched into other product lines like home décor and housewares, selling such practical items as tableware and cooking devices. But now Ross-Simons is refining its merchandising strategy to more closely tie it to jewelry and increase profits, Matthies says.

Increasing its base

It’s also reducing and refining its tableware offerings and planning to discontinue its tableware-focused bridal registry. “Now if it’s not jewelry, it’s mostly jewelry accessories or fine collectibles,” Matthies says. “The merchandising strategy is to build off the jewelry base.”

Meantime, Ross-Simons is taking several steps to increase its customer base of multi-channel shoppers. It offers special incentives like gift certificates and days off to store associates who get the most e-mail addresses of new customers, for example. With its expanded e-mail list, it’s using innovative ways to reach shoppers.

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