Transcript Chapter 6 - Retailoperation

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
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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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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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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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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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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.