Signs of the times: Exploring new horizons through multi-channel marketing
By Paul Demery
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.
Regular customers who have opted in for e-mail marketing messages, for instance, may receive automated e-mails packaged with automated telephone calls alerting them of the special offer in their
e-mail inbox. The Ecometry platform has a built-in e-mail management system that automatically sends order confirmation notices when customers place orders online, and that can be configured to trigger marketing e-mails based on customer activity.
Promotional messages are also distributed in coordinated e-mail, printed circulars, direct mail pieces, package stuffers and notes in online store locators. “If we’re offering a 15%-off promotion in stores in the Northeast, a customer could get a postcard and an e-mail, and on the web site we’ll have a kicker to show that promotions are in stores,” Matthies says. Shoppers on Ross-Simons.com can also click on the site’s store locator to see information on the same promotions at individual stores, such as a message that all items are discounted 15% for a particular time.
Ross-Simons will run six to eight e-mail campaigns a month for all three channels, with product images in e-mail messages similar to those in coordinated printed circulars, Matthies says.
It also promotes online coupons or gift certificates that can be used for online purchases or printed out for use in stores. To promote the use of gift certificates during peak periods like Christmas and Valentine’s Day, Ross-Simons will promote them ahead of time in e-mail. “We started doing that last year, and it worked well for Christmas,” Matthies says.
Coordinating inventory
Another advantage of using the single Ecometry platform is being able to coordinate inventory records in each channel. One of the biggest challenges of running promotions is having the right amount of stock available to meet demand. With the Ecometry system, if a customer orders over the web or through the call center a $2,000 gold ring that isn’t available in the fulfillment warehouse, the platform can instantly recognize, for instance, that the ring is available from stock in a particular store and automatically forward the order to that store for fulfillment. The customer would then receive an e-mail confirming the order and shipment date.
When online orders are forwarded to stores, the customer receives an initial message on the web that the requested product is not immediately available online but that it will be processed as soon as possible. “The customer will be pleasantly surprised when the order is quickly fulfilled by a store and they get a confirmation that the order has been shipped,” Matthies says.
The system also supports orders placed through Ross-Simons’ call center. A customer service rep taking an order for the $2,000 ring could quickly check availability throughout the store chain and forward the order over the web for next-day fulfillment.
Ecometry expects to offer even higher levels of integration to support multi-channel marketing through its future association with Blue Martini Software Inc., which is being acquired by Ecometry parent Multi-Channel Holdings Inc. The deal is expected to close this quarter.
If a customer registered in a retailer’s loyalty program is about to lose her loyalty status due to lack of purchases, for example, a Blue Martini application integrated with Ecometry customer data may automatically e-mail the customer with a special offer to remain in the program, says Monte Zweben, founder and CEO of Blue Martini. “That’s one example of closely watching customers and contacting them when it’s most important to the retailer,” he says.
Store pick-up
Another service of tighter integration, he adds, is presenting online shoppers the option of selecting items in a shopping cart for a scheduled in-store purchase. A shopper carting several apparel or jewelry items, for instance, might decide that she’d rather first try on an expensive suit or ring and talk to an in-store sales rep in person before completing the purchase for it. “The online shopping basket can include a button that asks if the shopper would like to see particular items in a local store with help from a personal shopping assistant, giving times when the assistant is available,” Zweben says.
The in-store assistant would then prepare to show the requested items along with additional ones for potential cross-selling, and reply with a personal e-mail welcoming the shopper to the store. If the customer doesn’t respond, the system can automatically send a follow-up e-mail promotion. “This kind of service will become state-of-the-art in multi-channel customer experiences within a year or two among higher-end retailers, then trickle down to the middle tier, because everyone will expect this level of service,” Zweben says.
Famous Footwear, in an effort to keep a step ahead of its competition, is using web analytics to monitor customer response to multi-channel marketing and identify hot trends. Sales are up 15-20% for products identified in trends, Bledsoe says. “The web allows us to identify and react to trends, helping our overall online sales and to some extent in stores, too,” he says.
The retailer uses HBX analytics software from WebSideStory Inc. to monitor and analyze how shoppers are using its web site. The web operation shares that information with stores to help identify fast-moving products. “We get a good picture in real time of what products and categories shoppers are visiting and what they’re buying,” Bledsoe says.
Famous Footwear analyzes web traffic right after it distributes its weekly printed advertising circulars in stores and newspapers. “We expect to see an online sales boost from the circulars,” Bledsoe says. The circulars prominently display references to FamousFootwear.com.
Cross-channel sharing
If a particular product featured in the circulars is getting a large amount of online traffic, Famous Footwear will re-work its online merchandising to display it and related products more prominently, producing even larger sales, Bledsoe says. At the same time, Bledsoe will forward data on online buying trends to stores, so they can take advantage of real-time data to emphasize displays of hot-selling products.
Famous Footwear usually sells a higher concentration of fashion-
forward products online compared to in stores, because the web enables it to more quickly see how customers are reacting to new fashions as well as display more merchandise. Once it learns how customers take to new products, it shares that information with stores so they focus on the proven sellers. “We can definitely help our stores with shopping trends,” Bledsoe says.
Famous Footwear is still striving to improve the way it coordinates multi-channel marketing and merchandising, Bledsoe says. One challenge is to better coordinate online and store displays to match images in marketing campaigns. “We want customers to shop our site the way they shop our stores,” he says. “We develop product stories all the time, but from a technical standpoint we can’t always respond to the stories with online images. For example, if we’re promoting collections of pink and green shoes, we can display them in bunches in our stores but we haven’t been able to group them together in images online. But if pink and green shoes are hot for spring, we want to show them better online. So we’re seeking a third-party search and navigation tool to do that.”
The continuing quest
No doubt Bledsoe and other multi-channel retailers will continue to look for ways to leverage each of their channels to improve the way they reach out to customers to build relationships and maximize sales. Famous Footwear recently integrated its web site with its back-end CRM system to allow members of its Rewards loyalty program to manage their account information for points earned both online and in stores. It’s now planning to make gift cards available online, letting customers purchase, redeem and check balances of gift cards on the web. Both services should also serve to keep shoppers coming back to the site more often. “Whether in-store or online we’re dedicated to providing our customers with that seamless, integrated customer experience,” Bledsoe says.
Adds Ross-Simons’ Matthies: “We all believe it’s very important, but we don’t yet do as much as we might in multi-channel marketing. We do our best to convince people that Ross-Simons is the right place to buy jewelry. We’re still trying to figure out the best ways to do that.” l
paul@verticalwebmedia.com
