Most retailers today understand the need of having a brand presence in multiple channels. Indeed, most money-making retail brands will have not only stores, but a transactional website and a catalogue, too.
Yet that is no longer enough. Retailers must now look to implement a true multichannel strategy – one where the different ways of transacting complement and grow the others for the benefit of the whole business and the customer.
At present there is no consistency of message or approach across these media: not only do these channels not talk to each other, they are also left fighting against each other for the same brand customer.
It is partly because these channels have grown independently of each other, implemented at different times and grown at wildly differing speeds – witness the explosion of ecommerce over the past decade – there may once have been a business rationale for keeping units siloed.
Today’s shopper often has to register three times for the same company across its channels, and is counted as a ‘different’ shopper at each. Where brands are striving to be – where we are advising them they should be – is putting the customer at the centre of their brand’s universe. All a brand’s touch-points should be consistent in message and be feeding to and from each other in a virtuous circle of activity.
Some have started down that road. Retail giants such as Marks & Spencer and John Lewis are investing heavily to create a seamless cross-channel customer experience, but for a large retailer, it takes time and money. Those that have not already started down this journey yet may find themselves left behind.
Retailers must consider a single-minded view where a customer is a customer however he transacts. There are reasons why this hasn’t been possible until now, but savvy retailers today have all the tools they need to action such a strategy.
Upgrading technology
Retailers must put in place a system that allows for multichannel conversations to be had. This must encompass till systems, website sales, warehouses, catalogue stock systems and so on. If the customer is to be able to ride seamlessly between touch-points your brand must already be doing it.
It takes time and is expensive, as it requires extensive upgrading or completely changing current systems. Newer or smaller retailers will have the advantage of being more fleet of foot, being able to implement such systems without too much trouble, but beware: such a technology upgrade does not come cheap, albeit one you can ill afford to implement soon.
Changing accounting systems
Pertinently, a brand’s stock system needs to be central, and this should also lead to a change in accounting procedures.
At present the marketing and store managers for the website, for the catalogue, and for the stores each have their fiefdoms – they don’t want to be driving sales to the other if it impacts on their sales and bottom lines. Equally, they don’t want to be refunding on stock that has been purchased via a different channel.
But take John Lewis, for example. John Lewis is probably the leader in multichannel, and is now recognising that an online sale should be based on where a person – a customer - is.
It records online sales to the nearest store to where the item is being delivered. That means that in-store personnel are beginning to understand and advocate the importance of the online channel.
They know that if it’s not in stock in store but is online then that sale will be allocated to them – and that means that they’re actively encouraged to log on and order the item for delivery for the customer rather than risk losing the sale.
Just that one piece of accounting policy means that John Lewis is immediately thinking in multichannel terms. It doesn’t care which channel you buy from as long as you buy from John Lewis.
Consider how customers interact on each channel – and how best to leverage this
Look too, at how the likes of John Lewis and Marks & Spencer are encouraging you to buy, collect and return goods through any one of the different channels they offer.
Such policies not only offer greater convenience to customers but also educate them to experience the brand seamlessly in their preferred way. Not every customer interacts alike. Indeed, whilst some consumers will only ever search and buy in stores, others will research online before heading to the store to buy, or they’ll buy online or over the phone and collect in store.
Some customers will only ever buy on the phone, or online, or in the shop but they are using those three areas to interact with the brand.
What we’re finding is interaction is very different in each occasion. It’s integrating those three experiences and that takes time and effort. It’s about signposting in store, messaging on a catalogue.
Retailers should be encouraging customers reading their catalogue to also go online. Thus, catalogues should include notes urging people to see video footage, or extra styles and colours. It’s about creating triggers to action, and making sure they are easy to follow.
"Brands that have a catalogue, shop and website tend to be the brands that are doing the best. They have the best online sales because they have those touch-points."
The relationship between catalogue and store is a bigger challenge as shops have physical spaces: they have geography. Again, it requires simple signposting but as yet nobody has cracked it. Think, for example, how your customer might be able to recognise the layout from catalogue to store – is there any commonality? Make sure that the same categories or labels are used in each case, take a good look at how the shop is split up and laid-out.
Content has become key in driving traffic and conversion. Retail sites often feature magazine-style design, including ‘editorial’ features, as do many of their catalogues. Many are now also launching mobile brand sites, another consumer touch-point which will also require an increasing amount of thought in coming months and years.
Of course, any multichannel retailer must look to its offering, its audience and its challengers – wherever they may be.
HMV has been quoted as saying they’re the last man standing on the high street when it comes to buying entertainment. And no wonder that already the brand is breaking out of retail, with initiatives such as cinemas within shops and music venues: simply, entertainment is so easy to buy online.
But with fashion there is still a need to have a bricks and mortar process. People want to try things on. They want to feel the fabric and touch the product.
When you’re talking about luxury goods multichannel becomes even more critical. The boutique and luxury brands who have launched transactional sites were seen as brave as even 12 months ago ecommerce was considered not luxury.
But the reality is that you have to go to where the customer is. Customers are everywhere; they’re across the globe, whereas a luxury retailer will typically have only a few boutiques albeit they might also be stocked within the big department stores as well.
Such brand footprints remain minimal in the real world so a website becomes a window to the rest of the world – a chance for customers to search and review before they plan a trip to try and buy.
Increasingly customers are even buying expensive items online, in no small way buoyed by the success of Net-a-Porter, whose concept, delivery and customer service has helped others see the benefits of ecommerce.
Extend your loyalty and promotions programmes across channes
Another way of encouraging customers to experience the various brand channels is to provide incentives such as promotions or a multichannel loyalty scheme. At the moment there are minimal incentives available to a web customer to go in store and vice versa.
This multichannel nirvana should also apply to loyalty cards and schemes. If I hold a card for a brand then I want that brand to know me across all its touch-points. That means I want to know on my account not only what I’ve bought online but also in store. The customer does not want different accounts with the same brand – it wants the system to know he’s a great, loyal customer and wants to feel rewarded.
One brand that is starting to do this is Tesco, the supermarket giant. It’s linking it’s club card customer’s in-store orders with their online orders so that wherever you shop, you have a history and therefore repeat ordering is that much slicker. That’s real cross-channel integration. It’s obvious really, but you can imagine the technology headache they faced to make this a reality.
It’s also important to note and promote the things each channel does well. In a perfect world the website will know where a shopper is surfing from – it knows where that consumer lives and its closest store and its website should be tailored, personalised to reflect that taking into account that customer’s preferences and offers available in their nearest stores.
The retailer Gieves & Hawkes is taking geography into consideration. One thing it is looking to integrate on to its transactional website is the location of each visitor, even taking into the account such variables as the weather so it can promote umbrellas in showery weather, for example.
It works for the brand to have that single view of the customer, and it works for the customer because it makes their experience more rewarding and personalised.
The first brand in each category that has that single view of the customer is going to own that market. Nobody has done it yet. We’re on the threshold of that.
Are delivery charges stifling your online potential?
Retailers must also take delivery challenges to take into account. The single biggest reason why people abandon online baskets is because of the delivery charges.
At present consumers are being challenged to decide whether it is worth a trip to the high street – perhaps to a rival brand – rather than pay for it to be delivered and wait for those goods.
At some point Pod1 believes that delivery charges will be wiped out. When considering the lifetime value of the customer versus delivery charges, you start to see the bigger picture and delivery becomes an obvious cost to absorb. Instead, all channels should be sharing costs such as delivery fees and using free postage as acquisition tools for customers.
In Manhattan, New York, and increasingly in London, some retailers offer same day delivery. You can be in store, but why don’t you order it online and have it delivered to your office or home later that day? It’s another added value. What makes the customer want you, and not your competitor? How can you make it easier to buy from you?
Digital shouldn’t mean the end of the high street store
Whilst at Pod1 we believe that online is going to firmly account for far more than flagship stores (making them a retailers biggest revenue driver) there is still a need for the high-street shop.
These bricks and mortar stores are evolving into the ultimate outdoor ads – each shop-front acting as an advertisement for the brand within, keeping that brand front-of-mind whether or not a passerby pops in or not. When you do come across those brands again, those ‘advertising’ messages will come forth.
We will also see the rise of channels within channels – increasingly stores will offer kiosks and multimedia services within their doors. Sales consultants may take their lead from the likes of Apple and John Lewis, such as by having floating service staff carrying multimedia devices that will allow them to inform the customer of size and stock levels immediately through to allowing them to pay for the goods there and then.
Evolving channels
In the medium term, devices such as smart phones will also be able to direct shoppers to shops, or sections within the shop, or allow them to compare prices or interact with marketing messages on the go. At the moment smart phone take-up, and its use by brands is tiny. Mobile will grow as a channel but we expect it to be bundled in with the web: it is a digital window to your brand with essentially the same engine behind it. It is going to grow, although there remain issues surrounding it, such as the inability to transact directly through most phones.
True multichannel
The Mecca of multichannel retailing will be when all prices are standard – nothing cheaper or more expensive, no differing charges such as for delivery depending how you choose to collect your goods – and most importantly when all information known about a customer is shared.
To do so retailers must work out how they record business profit and loss, how they account. Retailers, marketers, sales directors across all the incumbent business units must work together. The business must be seen as a holistic whole, rather than a loose collection of kingdoms in order to ensure a coherent customer experience. Start that way and expand it.
Eventually, when a retailer has that single view of the customer, it will be able to personalise its offering – and that’s where things really get interesting.
Building a multichannel strategy is not merely for the retail giants: most organisations can do it with time, well-trained teams and relatively straightforward technology.
Fadi Shuman
Co-Founder, Pod1 Group