Multichannel Retailing
Lynda Gamans Poloian
Copyright ©2009
Fairchild Books
• All rights reserved. No part of this presentation covered by
the copyright hereon may be reproduced or used in any
form or by any means–graphic, electronic, or mechanical,
including photocopying, recording, taping, or information
storage and retrieval systems–without written permission
of the publisher.
ISBN: 978-1-56367-6332-1
GST R 133004424
Chapter 6
Cross-Channel Collaboration
Elements of Cross-Channel
Collaboration
• Cross-Channel Organizational Design
Performance Guidelines:
– Strategies should encompass all channels
– Maintain customer-centric focus
– Select integrative technologies and performance
metrics
– Cultivate executives and associates that
embrace multichannel retailing
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©2009 Fairchild Books, A Division of Condé Nast Publications.
Cross-Channel Organizational Design
• Semi-integrated—
share some operational
and informational
tools
• Fully integrated-share all key
operational functions
• Independent—
channels run
separately
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Significance of Channel
Synchronization
• Branding, technology and communications
should be consistent across all channels
• Collaboration impacts brand equity, sales
and profits
• Cross-channel shoppers spend significantly
more than those who shop only one channel
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Solutions to Cross-Channel
Collaboration Problems
Six Areas of Concern and Possible Solutions
1. Synchronizing
Information
Technology
2. Sharing Customer Data
– Resources for crosschannel management are
plentiful
– Planning for global
distribution presents new
challenges
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– Retailers collect much data
about customers
– Not all is useful or easily
accessible
– Customer privacy concerns
retailers
– Opt-in methods of data
collection work best
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Six Areas of Concern and Possible Solutions
3. Implementing
4. Countering Limited
Customer Service
Procedures
– New channels necessitate
further training for
associates
– Compensation methods
require review
– Customers require different
levels of service
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Financial Resources
– Lack of capital may
encumber investment in
new technology
– Creative solutions include
use of e-mail
– Metrics used in tandem with
cost-saving measures
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Six Areas of Concern and Possible Solutions
5. Developing Internal
Expertise
– More retailers developing
online stores in-house
– More expertise now
available
– Directors should be part
of executive team
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6. Embracing Change
– Many companies resistant
to change
– Effective retailers plan
proactively
– Examples of innovative
change: kiosks, special
search methods, and
neuromarketing
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Integrative Marketing Strategies
• Building Brand Equity Across Channels:
– Employ common theme across channels– like
Victoria’s Secret
– Partner with other strong retailers to enhance
Web selling—like Amazon.com
– Retailers worldwide understand the strength of
branding—like House of Fraser
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©2009 Fairchild Books, A Division of Condé Nast Publications.
Integrative Marketing Strategies
• Merchandise Selling and Pricing Tactics:
– Having right goods at right price is critical
– Cross-Channel Selling—integrating order
management, fulfillment, and customer service
software
– Selling Luxury goods—targeting high income
fashion conscious shoppers can be effective
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Integrative Marketing Strategies
• Pricing Techniques:
– Online stores tend to do less promotional
pricing and take fewer markdowns
– Comparison shopping has made customers
more price conscious and better educated
– Poor economy makes price negotiations more
prevalent across channels
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©2009 Fairchild Books, A Division of Condé Nast Publications.
Price Setting Variables
• Customers influence retail prices
• Branded goods are more expensive than
generic goods
• Private-label merchandise is priced lower
and is more profitable for retailers
• Quality and price sometimes inversely
proportional
• Reducing prices improves the flow of goods
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Effective Distribution Practices
• Customer Expectations:
–
–
–
–
–
Site-to-store pickup option
Catalog selection and purchase online or in store
Cross-channel promotions and return service
Retailer access to customer history across channels
Access to all merchandise across all channels
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Effective Distribution Practices
• Fulfillment Strategy
Examples:
– REI—customers can
order online or through
store kiosk and have
goods shipped to store or
home
– Anthropologie—began
using separate systems;
moving toward common
interface
– Walmart—first to offer
site-to-store; encourages
customers to shop online
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Promotion in Perspective
• Typically depended on classic advertising,
sales promotion, and direct marketing
methods to reach customers
• Web-based new media has radically
changed customer contact options
• Recession slowed advertising spending;
online sector expected to resume growth
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Consistent Cross-Channel Exposure
• Paiva, an athletic apparel company,
maximized cross-channel tactics for its
opening:
– Online store opened three days after brick-andmortar store
– Catalog received four days later
– Branding synchronized across channels
– Catalog promoted in-store
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Modern Media Trends
• Online Media Tactics:
–
–
–
–
–
–
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Personalization
Social Network Advertising
E-mail Contact and Advertising
Banner Advertising
Search Drives Sales
Inter-Channel Promotion
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Online Media Tactics
Personalization
Social Network Advertising
• Relationship building
• MySpace, Facebook and
tools
LinkedIn as advertising
vehicles
• Individualized content
• Use customers name in • Effectiveness not yet
proven
message
• Fully engages customers
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Online Media Tactics
E-mail Customer Contact and
Advertising
• Powerful, personal, costeffective
• Transactional messages
confirm order status
• Many creative options used
to reach customers
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Banner Advertising
• Online retailers moving
away from original banner
design
• Viral marketing and
widgets more prevalent
• Use pay-per-click or per
thousand (CPM) methods
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Online Media Tactics
Search Drives Sales
• Retailers constantly
update key words and
systems
• Advanced search
functions on sites
increase sales
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Online Media Tactics
Inter-Channel
Promotion
• Maximizing customer
options across all
channels
• M-commerce
initiatives growing
• Kiosks to simple sales
announcements work
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Customer Relationship Management
• CRM dependent upon:
– Database development and use—Coldwater
Creek one of first to share customer info across
all channels
– Data mining to facilitate advertising—Retailers
use geodemographic tools, cookies, and
behavioral targeting
– Cross-channel loyalty programs—J.Jill and Gap
use cross-channel incentives
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Organizational Leadership
• To recruit and retain talent and
implement multichannel retailing:
–
–
–
–
–
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Build management team
Establish performance review guidelines
Develop new recruiting tools
Implement management training programs
Communicate well and expand globally
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Organizational Leadership
• Human resource management:
– New technological tools available
– Avatars used to interview in absentia
– Social network sites used for recruitment and
referral
– Online recruitment firms like Monster.com
– Web-based training programs
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©2009 Fairchild Books, A Division of Condé Nast Publications.
Organizational Leadership
• Profitability and Productivity:
– New channels require fresh ways to measure
profit and loss
– Online business expense allocation different
from other channels
– Proportion of revenue attributed to brick-andmortar sales usually higher than online sector
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Summary
• Multichannel retailers choose cross-channel
collaboration as a means to reach
performance goals while building customer
loyalty
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©2009 Fairchild Books, A Division of Condé Nast Publications.