This morning, two very good articles about multi-channel retailing popped up from Twitterers that I follow. With way too much to read already, I hesitated to click but I am glad that I did. This is a topic I have long been passionate about; and with the changing dynamics of customer behavior in a recession and mobile moving like a high speed train, more and more retailers are becoming equally passionate about aligning channels and devices to capture demand. First, a bit about the two articles and then my take.
Both articles are well worth reading.
The first, in How to Fit Into Your Customers' Multi-Channel Lives, Peter Merholz of HBR does a great job of setting the historical stage for multi-channel services. Long before e-commerce or the Internet, Kodak helped customers and built loyal relationships by breaking up the process of taking pictures an developing film, letting each step be managed by the people and places best suited to the task. Apple followed suit with the iPod decades later by separating the music purchase and management from listening. Good multi-channel food for thought for any retailer or service provider.
The second, a new blog post at X-Channel Retail provides a good overview of recent multi-channel studies from Aberdeen and Retail Systems Research. You'll find plenty of stats indicating that multi-channel initiatives are alive and well in most top-tier retail organizations, with improved visibility to inventory across channels and coordinated marketing efforts high on the priority list.
It's hard to argue that investing and executing well on a multi-channel strategy is a smart thing to do. But achieving the elusive "seamless experience" is easier said than done. With mobile adoption on a fast and furious pace, the need for retailers to orchestrate the research, shopping and buying experience not only across channels but devices (and devices within channels) means that execution will be more complex than ever. While many retailers are doing it well, many are simply not prepared for the cultural, technical or organizational challenges that come with tackling the multi-channel monster. Having spent a good portion of my career and consulting life in the multi-channel world, here are my top 5 fundamentals for taming the beast:
1. Focus on the unique strengths and uses of each channel and device. Multi-channel is about more than having the website available in your store or on a mobile phone. It's about each channel bringing unique value to the customers' shopping and buying experience along the way. Think about the Sears curbside pickup program; customers receive a text message when their online purchase is ready for pickup at the store curb. The cell phone didn't process the transaction, but made it a more convenient experience.
2. The decision to integrate across channels and devices must be deliberate. Most retailers today are multi-channel in at least some sense. Most have some level of channel synergy, but often that synergy has happened organically or accidentally. Despite the clear customer demand for multi-channel convenience, many retailers organize and incent team members to behave like silo channel operators. According to the Shop.org 2008 SORO Report, 85% of multi-channel retailers say that their website's highest priority is to drive online sales and profit. If that's the case, multi-channel initiatives are unlikely to be at the top of the priority list, with online conversion drivers taking precedent. If the decision is to integrate (and it should be), giving it the appropriate priority and resources will leapfrog internal silos and organizational boundaries.
3. The technology essentials must be defined and planned. Those in the know on multi-channel will tell you that transparency to inventory and pricing across channels, centralization of customer data and flexible access to product content are key. None of these are small things, so a clear road map will need to be created based on priorities and anticipated ROI.
4. Multi-channel integration requires clear ownership and teamwork. An executive mandate to integrate is critical, but so is "on the ground" leadership. Often, multi-channel initiatives lack a clear owner or a dedicated cross-functional team to focus on execution. According to the SORO study, only 37% of companies surveyed reported having a cross-functional team to design and roll out cross-channel features. Consistent accountability for multi-channel programs vs. treating them as "side projects" outside of normal business will go a long way. You'll need a great knowledge source from each channel, someone from customer care, someone from IT and likely others, depending on the initiative.
5. Objectives and incentives must be aligned around customer scenario success. Teams tasked with multi-channel issues need to map the "end to end" customer experience, carefully planning how each channel or device will help the customer achieve their goals. If performance metrics are focused on customer success, the right decisions will follow. Chances are someone on your e-commerce team is skilled in scenario design: tap into them for multi-channel experience design.
Finally, pace yourself and don't expect overnight success. Most multi-channel initiatives by their nature are hard to do well. Be sure roll outs are carefully planned and tested before wide release, and have mechanisms in place to gather customer and employee feedback early. You're going to have a long relationship with the multi-channel monster.
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