Multi-Channel Commerce - What does it mean?
In it's most simple form, the answer that gets back at you is that a retailer wants to provide their customers with the capability to "Buy online and return at stores" or "Shop online and pick up at stores" or a variant of these where invariably there is some transaction activity crossing the two channels of stores and online. Is that all it is then??
Let's first look at the business value that "multi-channel integration" brings. One of my clients found out that on an average they have incremental $10 revenue for every online customer that they can get to come to the store and a incremental $150 revenue every year for every stores customer that they get to sign-up online. However as the client CEO said to me "Sudhir, It is not about multi-channel at all. It is about providing what my customer needs across different touch-points in a way that is profitable for me".
Let's look at that statement again. Touch-points; for today's customer it includes the store, media, blogs, social commerce sites, online shoppoing sites, mobile phones, video games etc.
What does my customer need? : For a typical retailer, customer needs include information, convenience, social confirmation, perceived value etc.
Does a "buy online and return at stores" or a "shop online and pick up at stores" really meet all the above needs. No; it does so only partly.
In order to be truly multi-channel, a retailer needs to start with the obvious understanding of what their targetted customer segment desires. The entire organization then needs to orient itself along that customer dimension - whether it is design, merchandising, marketing or sales support. The multi-channel experience then needs to be stitched in each of these organizational functions taking into account the channels that make sense for the targetted customer segment.
Let's take a few examples.
A pharmacy customer with diabetes. Multi-channel needs would include information on diabetes, possibly a social community that can help him network with other customers with a similar ailment, a prescription refill or a pick-up reminder service on his phone....
A teenage girl. Multi-channel needs would include a facebook community on her favorite brand with occassional celebrity chats, a virtual apparel closet, ability to get online feedback from her friends on her next purchase, a virtual fitting room, ability to return at stores, coupons and freebies at the mall on her phone....
Many retailers built thier online organization by revamping their catalog operations and provided the channel with the independence it needed to grow. While some of the independence may still be desired; it may be time to reign back especially in the areas of brand management, marketing to help craft that integrated multi-channel experience.
Comments
Sudhir, while I agree with the thought of relooking at the Online channel and its role in the multi channel strategy of the retailers, most of the retailers have two distinct organizations and the investment required to bring them together is very high. For most of the top retailers, the Infrastructure, Merchandise, Inventory management, Systems and People supporting the two channels are all different. Hence it is very important that the multi channel strategy is well thought out and steps taken justify the return on investment.
There are two important steps. The first step in this direction is to get a good visibility into the Items and Inventory across all the channels. The other step will be to identify the customer across all the channels and understand the shopping patterns. These two form the foundation for multi channel commerce.
Posted by: Saikiran | December 22, 2009 2:55 AM