Multi-Channel Commerce & Retailing

One of the difficulties of being an online retailer is that consumers have a difficult time determining how the clothes will look and feel on their bodies.  One of two things usually happens.

1. Look Online – Decide In Store.  The consumer does not purchase online because they are worried the item won’t fit right or won’t look like it does in the pictures.  So time permitting they will select the items they like and go in store, try it on, and then make a decision.
2. Buy Online - Return. Or if they don’t have time to go into the store they simply purchase the item online and return it if it’s a disappointment.  As a result, most online retailers find they have an extremely high return rate.  This not only cuts into profitability but it also costs the company significantly to process returned merchandise.

One way that online retailers can enhance the online consumer shopping experience is through the use of virtual models and personal avatars.  While this isn’t a new concept, very few retailers have managed to implement this technology successfully and integrate the tool with other digital marketing strategies.

H&M Virtual Model

This multichannel retailer has successfully implemented My Virtual Model.  Consumers can create a personal avatar with actual body specifications that match their own and try on the latest collection in a virtual changing room.  They even allow customers to implant their own face on the avatar making it even more realistic.

This retailer is taking things a step further by allowing customers to save items in their virtual closet, and email their outfit to friends or communities to get opinions on how the outfit looks.  It’s like bringing friends and family in the changing room with you.  Now that’s socially influenced shopping if I’ve ever seen it!  It also allows customers to print out the outfit – walk into a store and say they want to buy the entire outfit – what a time saver!  H&M also provides a link to facebook where users of the group can comment on what they like about the outfit and provide additional design tips.

What's Next?
Once more companies learn to effectively use and leverage the virtual model into their every day interactions with the consumer, there are 3 additional shopping tools that can be further enhanced through the virtual model experience.

Cross Sells
Although e-tailers are used to using cross sells and up sells to recommend products to customers, the potential for customized and personal cross sells is tremendous using the virtual model.  For example, retailers can recommend products based on the avatars body type and size specifications.  Shoppers with plus size avatars can be offered recommendations based on other shoppers with similar size and style preferences.  Shoppers that are petite or with specific style preferences could be recommended products that would be enticing to them.  The same applies with virtual rooms.  Designers could have pre-assembled rooms that customers can model their rooms after, or make recommendations on pieces that the customer might not have been previously aware of.  The potential is limitless.

Targeted Advertising
The potential for targeted advertising is also very exciting since customers can opt to receive coupons, or campaigns specific to their interests and personal specifications.  Customers would welcome more relevant advertising, receiving coupons or emails based on their style or body type.

Consumer driven shopping
Eventually the virtual model can allow for consumers to drive shopping style guides and build their own closets or department stores based on their specific style and personality.  For example, if a shopper is extremely skilled at putting outfits together and mixing and matching, they could create their closet and allow for other customers to develop a fan base by subscribing to their closet and take tips from their design recommendations.  This could be especially beneficial if the shopper is a celebrity that could build a closet as to how they would mix and match items for a night out and have other shoppers rate their outfit choice or purchase the exact outfit.

The potential of the virtual model and shopping experience has only just begun.  It is an exciting concept.  I’d be interested to know of your opinion or experience using the virtual model during your online shopping experience.

Posted by Behnaz Ghahramani at 06:28 AM | Permalink | Comments (1) | TrackBacks (0)

The possibilities of using Loyalty Cards in multi-channel fashion are endless. It seems easy enough to sign-up or redeem points online. Just about everyone uses their card in store for discounts (Publix) or points accumulation (Best Buy.) Creating a seamless, multi-channel customer experience is a whole different story.

Believe it or not technology is the challenge in creating the customer experience. In order to keep your personalized offers, discounts, points balance, and arbitration synchronized retailers need real time access to such data. The use of credit cards, swipe cards, and chip cards offer different challenges to this synchronization. Chip cards can store the customer points balance but are expensive. Swipe cards and bard coded loyalty cards are commonplace but require real-time access to the points balance and customer balance. This is not easy as many retailers have grown through acquisition and have many stores that still operate stand alone (and not in real-time connection with the corporate network.)

The power of tracking loyalty spend across channels is immense. Setting unrealistic expectations on the customer experience is the risk. A quick look around the blogosphere will find you the following types of complaints about loyalty programs:
1) Receiving in inordinate amount of communication on their loyalty program via mail, email, etc.
2) Not being able to redeem points within a reasonable timeframe
3) Not being able to redeem online
4) Confusion at the Point of Sale as to what offers/discounts can be used together, or how many points you earn
Some of these problems can be attributed to technology limitations where some of them are due to a poor thought out customer experience. It is a slippery slope when designing the experience. Customers are smart, and they will inevitably find the gaps and bugs in your program.
 

What to do

Customers appreciate transparency in a retailer. Keep the operation simple and clear to the customer. The worst customer sentiment to deal with is the feeling that your loyalty program is a hoax or a scam. I myself have fallen victim to a loyalty program where the sales associate informed me that I would receive X amount of loyalty credit based on a large purchase I made. I didn't read (or couldn't find) the fine print that points can only be redeemed in $5 increments at a time, spread out over several months. Here are a few simple suggestions to keep your customers' experience positive:

• Start with clear simple initiatives that build your technical infrastructure - just the ability to display the points balance online or redeem online can be trying enough. Build the services needed to share this information real time and test them with your .com. 
• As you build on this functionality, make clear delineations in each step change you make to the customer - allowing your customer to register online is a great way to drive participation online, whereas trying to fully integrate club card management into your online account can be overly complicated if you try to include points or vouchers in the eWallet. 
• As always, apply your business case - do not suggest functionality you don't need or your customers don’t want. If you are driving for more participation, work on registration and redemption. If you are driving for more wallet share, work on personalized offers to go with your loyalty mailings.

All in all, it works like any other initiative. Define your goals, determine the functionality needed to drive them, and then build the underlying technology to enable it.
These programs have grown so much in the last 15 years with retail, travel, gaming, banking, and other industries. I look forward to reading your own experience with multi-channel retailers and their loyalty programs, good or bad.

Posted by Seth Lively at 09:36 AM | Permalink | Comments (3) | TrackBacks (0)