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Omni-Channel Retail: A Term So Confusing, Even Those Doing it Best Don’t Know What it Means

In the late 1990's, I remember attending an e-commerce trade show and laughing with a group of colleagues about rapid rise of the term "CRM". It was on the tip of everyone's tongue in the conference sessions, and the exhibit hall was full of solution providers, most of them new, claiming to have the perfect, easy to implement system to give us all instant access to customer intimacy.

A few years later, "Web 2.0" became what "CRM" had been; a nebulous term thrown about at trade shows and on blog posts that no one really understood. CEOs asked their e-commerce directors "are we doing Web 2.0?" as if it were something one could buy and install or a box that could be checked off of a to-do list. Fortunately, the term Web 2.0 went away and we never had to face the task of defining it clearly or, God forbid, dealing with a Web 3.0 or beyond.

Yet, here we are again. The term 'omni -channel retail' dominates the headlines of trade news stories and the business sections of high profile publications. When I ask my clients and my colleagues what that term means to them, we usually laugh and admit that we can't really describe it very well. Plus, I have yet to meet someone who likes the term or thinks it serves a valuable purpose.

An Internet Retailer article last week quoted Jamie Nordstrom as saying "I'm not sure what 'omni-channel' means". Nordstrom, arguably a leader in both investment and execution of integrated retail, lauded by some as a shining example of 'omni-channel' have themselves tossed the term aside. That ought to tell us something.

I first recall hearing the 'omni-channel' term about 3 years ago, when mobile shopping was just appearing on the horizon. The phenomenon of customers bringing the web into the physical store via their smartphones created a new customer behavior that many retailers weren't prepared for. This was more than a cross-channel shopper….so what should we call them? Since then, 'omni-channel' has been used with increasing frequency, though unfortunately without much further clarity.

Here's a quick summary of the conversations I've had over the last couple of weeks on the topic:

Retailers use the terms multi-channel, cross-channel and 'omni-channel' interchangeably, but probably mean different things when they say them. When you break it down, the most confusion comes between the terms 'cross channel' and (like it or not) 'omni-channel'. While I'm no fan of the 'omni-channel' label, at the heart it represents a very real phenomenon: cross-channel capabilities are rapidly advancing and retailers are more deeply integrating their channels to enable new levels of customer convenience and delight. We need to call it something, even If it's not 'omni-channel'. For now, I'm thinking about it this way:

Multi-channel: Generally speaking, most agree that any retailer that operates more than one channel (stores, e-commerce, catalog, mobile commerce, etc.) is by default multi-channel. But, being multi-channel doesn't mean that the experience of shopping across those channels is coordinated or cohesive to the customer. Companies in the early stages of coordinating the experience usually focus on the things close to the surface, such aligning customer facing promotional events, pricing and messaging for brand consistency. But, they may not embark on the heavy operational lifting or systems integration required to offer a seamless experience for those customers using more than one channel.

Cross-channel: Historically, this term has described the capabilities that allow customers to interact and transact with a brand across multiple channels, for example, researching an item online and buying in a store, buying an item on line and picking it up in a store or buying an item online and returning to a store. These cross-channel conveniences have become commonplace for many multi-channel retailers, but they don't necessarily require the level of operational and data integration that's starting to evolve. For example, all of the scenarios described here can be done without integrating customer data, inventory or product content. They take some process work and training, but they can be done without going too far under the hood. So, while they are great conveniences for the customer and may be executed well enough, there's a whole new level of integrated customer experience that isn't being realized. From an organizational perspective, the channels still exist as, well, channels, with mostly separated staffs, goals and strategies. This makes execution and measurement of cross channel programs difficult, and few companies do cross-channel well or without significant challenges.

Omni-channel: Most of the people using this term are using it reluctantly, either because they don't like the way it sounds or, more importantly, because the term doesn't adequately express the customer centricity of what they're trying to do. Suffice to say, for some, 'omni-channel' is considered a next generation or "advanced" version of cross-channel. Here, customer data, inventory, product data, content and operations are integrated to operate as "one", with the customer in the center. The customer is able to interact and transact across touch points (note the word touch points here, not channels) interchangeably and simultaneously. For most retailers, this is a highly aspirational state, but it's where the leaders are headed. Examples of 'omni-channel' in action might mean customers having access to inventory availability regardless of the store or warehouse where it resides, or an order being fulfilled from whichever location is the fastest, most economical or convenient to the customer. It might mean customers and sales associates having access to the same rich set of product information and content regardless of whether they are looking at a cell phone screen, a tablet , a computer, a cash register, an in store kiosk or a digital sign. It might mean that marketing messages are personalized, tailored and delivered to a customer based on location, purchase or browse history and device, with service at each touch point that takes this critical data into account. Culturally and organizationally, achieving success will take huge leaps not only in IT, but just as critically, in culture, organizational structure, planning and measurement. Channel barriers will need to be broken down with more cross-functional morphing across teams to deliver the desired customer experiences. Strategic plans, budgets and goals must be centralized, with focus on key financial and customer metrics company-wide. Easy to say. Very hard to do.

Clearly the aspirational state described as 'omni-channel' is a step up from how we've thought about cross-channel in the past. It's understandable that we're confused and frustrated by the term. E-commerce is still a young industry (and yes, I know that there are many of you out there who believe that 'e-commerce' is itself an outdated term). As we grow up, as customer expectations evolve, it's only natural to need a vocabulary to describe what we're doing and experiencing. If we ditch the term 'omni-channel' (and personally, I'd be all for it), hopefully we can all agree on what to call it before we move on to the next stage of our evolution (and the inevitable new and confusing buzz terms that that will bring).

Yes, Virginia, There is a Nordstrom. My Holiday Story of Retail Fate and Therapy.

A few months ago at the Shop.org Annual Summit, I attended a session where e-commerce executives discussed the future of digital retailing. The conversation rode the waves of many intriguing topics, but for me, the most compelling moment of the session went something like this:

The moderator asked how big digital giants like Amazon are thought about in more traditional retail organizations; what strategies are retailers deploying to prevent losing market share to pure play leaders that offer price, speed and convenience? There was an awkward silence in the room. The silence itself said as much as the few participants in the room who spoke up to answer the question.

As this year's holiday season has unfolded, the importance of this topic has only intensified in the minds of retailers, as they watch customers scanning bar codes in their stores being rewarded to buy on Amazon instead, and as the Kindle Fire (design flaws and all) offers consumers an affordable device that integrates content and commerce.

I rely on Amazon for cat food, Kindle books, and a wide variety of "long tail" items that are too hard to find in the "real" world. But, there are things that Amazon can't do for me, despite the recommendation algorithms, the endless selection and the ease of buying with one click.

Last week, I was reminded of what makes great retailers truly great. My experience didn't take place online on my usual e-commerce shopping haunts, but in the brick and mortar world of a digitally savvy, customer focused multi-channel retailer. Here's the story:

It was Wednesday morning and I was in a rush. I was leaving on a 2pm flight for Europe to complete a client assignment. I've been a business traveler nearly all of my working life, but I have yet to master the art of truly being prepared for a trip. Always the last minute thing to buy or pack, the long mental list of things I need to remember (passport, converter, adapter, power cords, eyeglasses, International data plan, instructions for pet sitter and on and on and on). So, as usual, I was in my stressed frenzy, running out to take care of my last minute errands before leaving for the airport.

As I hurried to cross the street, I felt a snap. It was sound no woman ever wants to hear: the death of my black tote bag. The handle had popped off of the bag, leaving me with a useless sack of leather. Any female business traveler out there knows the critical importance of the black tote bag. It serves as both your briefcase AND your purse on business trips so that you can still carry on your suitcase. It holds your laptop and work in addition to the usual wallet, cosmetics, phone, power bar and keys. There's no point in even discussing the possibility of making a trip without it.

With less than an hour before needing to leave for the airport, I cast all decorum aside and simply went into a panic. Luckily, I was a block away from Nordstrom, one of the better places to have a meltdown. I rushed into the store and walked a blue streak to the handbag department on the first floor.

Hyperventilating, I went to a fixture and opened the first tote bag I saw. Too small. Ugly too, but I can't be picky. I went to the next fixture and reached for another bag. Then I heard a voice. A woman pulling a cart full of handbags called to me and said "You need a new tote bag and you're in a panic!"

I looked up. I showed her the amputated handle of my tote bag, and in between frantic breaths I blurted out something about the bag falling apart and needing to leave for the airport. She smiled confidently. "Ok, no problem. Let me put this cart away and we'll get you a new bag. I'm going to credit you for the one that broke and we'll get you into something that will work. Just breathe. Be glad that this happened now instead of while you were on your trip. You might want to look at these two bags to start, but I'll be back in just a minute to help."

She was good on her word. We looked at every tote bag on the floor. She was able to quickly point out every feature of each bag (inside pocket here, secure zip closure there). While I looked at one bag, she brought me another. I was like a choreographed dance. We settled on the best solution and she whisked me to the register. She looked at my broken bag. "You bought that here maybe 3 or 4 months ago, right?" I said I couldn't remember, but that was probably about right. She looked up my account at the register and immediately located the purchase of the old bag, giving me full credit. I moved my belongings into the new bag right there at the wrap desk, scraps of paper, half eaten power bar and all. As we were finishing the purchase she said. "I could just tell by the look on your face that you were in trouble. Hopefully now you'll be able to have a great trip." I thanked her (I really wanted to hug her but held back) and walked out of the store, honestly a bit wobbly from the experience. I thought, "What just happened here…?"

Well, now that I've had a week to reflect on it, I'll tell you what happened.

• I had the good fortune of having a merchandise crisis a block away from one of the best, if not the best service retailers around
• Within seconds of my arrival in the store, an amazing sales associate tuned in to my needs and without even asking, knew intuitively exactly how to solve my problem. She stepped in to help without waiting for me to find her.
• She knew her product. She could tell me the price and features of every bag without missing a beat. She asked me questions about features and styling and immediately helped me zero in on the right options.
• She had the technology at her fingertips to look up my old purchase and credit me on the spot, and she had the benefit of a service policy that allowed her to process the return, no questions asked, no manager sign off. Note that I never asked for or expected a refund. It just happened.
• Not only was I sold a great bag, I felt genuinely and personally cared for during the experience. This was truly retail therapy.
• I walked out of the store in about 15 minutes with a beautiful bag, a normal breathing pattern and a smile on my face.

Keep in mind that all of this happened during the holiday season, when the store was busy and both customers and sales associates are taxed.

For those of you multi-channel retailers out there, ask yourselves: can your organization do that? If you're worried about the battle for shoppers' attention and the aggressive actions of Amazon, think about this:

While I will likely always be an Amazon shopper for some things, Amazon can't do for me what Nordstrom did for me that day. They may personalize the site, but they can't know what I need by looking at my face or reading my emotions. Despite Amazon's stellar self service, in this case it's no substitute for the real deal; of a person who really listens and knows their stuff. Technology, while not at the center of the experience, beautifully enabled the person helping me to do her job efficiently and process my return seamlessly. Amazon delivers fast and is getting faster all the time, but 15 minute delivery with the kind of experience I had isn't in their reach.

The holiday shopping season is almost over. For most e-commerce sites, the final hours of shipping deadlines are on rapid approach. For those of you in brick and mortar, your stockrooms are emptying and likely so are your personal energy reserves. It's time to refuel and gear up for 2012. Based on my experience last week, my holiday wish this year for all retailers, large and small, online and multi-channel is that you will each find your own ways to bring unique magic and joy into the shopping experience of your customers. Yes, Virginia, there is a Nordstrom. May their magic inspire retail greatness everywhere.

10 Online Retail Lessons Learned at Least 10 Times, and Still Loving It.

I love my job. It's been a frenzied year so far and with many e-commerce teams about to hunker down for the holiday crunch, I'm at last taking a two week break to read, (hopefully) write and recharge.

One of the reasons I love my job so much is that the learning environment in digital retail is endless. The pace of change in e-commerce is at an all-time high, and every client brings a new set of circumstances, opportunities and unique challenges into the mix. But sometimes, there are common threads that run across even the most diverse of engagements and sometimes, the learning is a re-run. In a good way.

This year I have had the opportunity to work with e-commerce executives at 'household name' brands, regional retailers and fledgling startups. Most are in the U.S., some International. Most B2C, some B2B. Many are well established in selling online, others just getting started (I continue to be surprised at how many sizeable retailers are still in the early stages of e-commerce). Some are highly successful in digital retail, others, admittedly, are falling short and need serious help.

Despite the obvious diversity of these clients, they are kindred spirits in the lessons they have learned by striving for excellence in online and multi-channel retail. I am often asked "what are the most common mistakes you see retailers make online?" or, "what are the biggest challenges that you see clients face in the online space? ". I'll take a slight detour and answer that question based not on the "mistakes" and "challenges" but instead on the 10 lessons I see CEOs and executives (and myself) learn over and over again in the world of online retail.

Lesson #1: This will be harder and more expensive than you think.

This lesson is particularly important for executives new to the online channel, many of whom have little perspective on the level of effort and investment required to build and sustain an online or multi-channel endeavor. It's not just the technology. It's the people, the design, the marketing, the analysis and the ongoing improvements. Many of the "rescue 911" engagements I see are the result of underinvestment in critical areas of e-commerce.

Lesson #2: This will take longer than you think.

Online commerce moves at warp speed, but that does not mean that your return on investment or sales increases will be instantaneous. If you have a short time horizon in terms of expected success – ask yourself: "Why do I think that ROI will come quickly?" Do you have data and perspective to validate that expectation? Wishing won't make it so. Its ok (and right) to aim aggressively - but have a plan (not just a hope) to get there.

Lesson #3: You will need to get educated about how to run a digital business.

The good news here is that the e-commerce industry is full of great conferences, communities and sources of information, much of it free or low cost. The perplexing thing is that too many executives don't take advantage of them. Subscribe to newsletters, follow industry experts on Twitter, listen in on webinars, read industry research and white papers. Just when think you've read a ton, read some more. Spend a lot of time (no, just cruising the home page doesn't count) on the sites you admire. You'll be surprised how quickly things change and how quickly new technologies and tools take hold (think mobile, tablet, social, etc.) and how different this channel is from the others that you may operate. Understand the metrics that are important to the business and how they work. Make your web analyst your best friend. He/she has lots to teach you.

Lesson #4: This will impact every area and every channel of your organization.

If you ask any seasoned, successful retail executive how online commerce has changed their organization, they will tell you that the changes have been substantial and that the changes have spanned every operational and customer facing aspect of the business. Be prepared for conflict; be prepared to make hard decisions. You will need to develop a vision for integrating digital into your organization, become a digital cheerleader and bring the rest of your organization along for an exciting and at times bumpy ride.

Lesson #5: Who you hire and where you place them in the organization is critical.

Hire people who "get it" and have done this before. They are hard to find, but they are out there. Mix them with your best and brightest internal minds. Stir. Have them report either to the CEO or to an executive that not only understands but actively communicates the importance of digital endeavors in your company's future. The rest of the organization will need to understand and buy in to the online vision and be appropriately incented to align the customer experience across touch points and channels. (Go back to Lesson #1 if you think this will be easy) Send the message that this matters.

Lesson #6: The guiding principles of great retail still apply.

Shiny website, great. Even more great? Awesome product, great merchandising, effective marketing, attentive service, fast, accurate fulfillment. Don't ever think you can forget those things.

Lesson #7: There will be distractions. Have a strategy, stay focused.

Having a solid vision and strategy for e-commerce is just about the only thing that will help you determine which of the many new ideas you'll see and hear about are worthwhile and which are simply shiny objects floating by. Be open to the ideas and the possibilities; but have the discipline to prioritize and say "no" when necessary. (Note, see Lesson #1 again – this is probably the main thing I see even the most successful online retailers struggle with)

Lesson #8: Your customer is already way ahead of you, and so (likely) are your competitors.

I still have the occasional client that will tell me "our customer is not that internet savvy…" to which I say, don't kid yourself. This is no longer a choice. It's an imperative. Your customers (young old, rich and not so rich) are already shopping online on their computers, on their phones and on tablets. They may not be shopping online with you yet, but their expectations are being raised every day by the early adopters who have gotten it right. Yes, you will have to run to play catch up, but that will be less difficult than not entering the race.

Lesson #9: The longer you wait the harder and more expensive it will be.

Yes, in some ways the barriers to online entry continue to be lowered due to advancements in technology. But, at the same time, the complexity and sophistication of the online world continues to evolve and (see the point above) customer expectations continue to climb. Jump in and kick like hell. There isn't going to be a better or easier time.

Lesson #10: This will be more fun than anything you've ever done.

Despite the hard lessons above and many others, I don't know a single e-commerce executive who hasn't become completely addicted to the pace and excitement of running their online business. It's the shot of adrenaline that every retailer needs.

So, to that last point above, I admit it, I'm an addict too. Yes, I'm about to take a two week vacation, but as crazy as it sounds, I can't wait to come back to work.

It's 2010. Do You Know Where Your E-Commerce Strategy Is? 7 Signs You Need to Find It.

Happy New Year, a few weeks in.  Despite one of the most challenging years for retail in recent memory, those of us in e-commerce had, by most reports a positive 2009.   Cash strapped consumers turned to our channel for research, relevance and convenience like never before, using new devices and tools to access our brands. Most of the colleagues I speak to are teetering on that pivot point between energized and exhausted. 

Even if (or perhaps especially if) your 2009 was successful, chances are your business has changed, and the role of e-commerce in your organization has changed.  When you were in the heat of the moment reacting to the recession, the sand was shifting beneath your feet.  You were doing what needed to be done, hardly coming up for air.  Now that it's January and you can actually take a breath, you're probably finding that some of the reactionary activity of last year has become commonplace, and it 's probably time to hit "refresh" on your strategic plan (oh, and if you never HAD  a strategic plan to begin with, chances are you need one now more than ever). 

If you find your e-commerce business facing two or more of the following, it's time for a strategy check in:

1) Your competitive landscape has shifted. The recession has brought exciting innovations to e-commerce (see social and mobile points below), but it's also brought the demise and consolidation of many retailers. Some that were big (think Amazon) have gotten even bigger and expanded into new categories. Do you have an updated, clear picture of  what you're up against, where you stand and who you're trying to beat?

2) You reduced the size of your team.  A lot of pruning took place in 2009, through attrition and layoffs.  Many times, the team gets smaller but the amount of work stays the same (or even grows).  If you haven't re-examined priorities, roles and processes in light of your new resource structure, chances are you're not operating as efficiently as you could be.

3) You delayed or initiated a site redesign or re-platforming effort (or think you need to).  With demands on e-commerce sites increasing at a rapid rate, record numbers of retailers are looking to upgrade or replace their site experience and infrastructure.  As a result, the e-commerce platform landscape is more crowded, confusing and complex than ever before.  Do you have a solid understanding of what you need to innovate at the pace your company and customer expect?  Have you re-calibrated what your site experience needs to deliver to more savvy, discriminating consumer?

4) The multi-channel initiatives in your company are increasing in number and importance.  If 2009 found you shifting gears to drive in-store sales in addition to online transactions, it's time to re-evaluate and clearly re-state the purpose of the online channel in your organization.  Is it about driving direct sales? Building integrated experiences across channels? Somewhere in between?  Does everyone know and agree to the success measures for the e-commerce?

5) Mobile is moving from R&D to bread and butter.  If you launched a mobile commerce site, app, or mobile marketing initiative in 2009, it's probably time to determine mobile's strategic role in your business and how you'll fund and resource this exciting new digital touch point.  Likewise, if your company yet to make a mobile move, it's time to plan when that needs to happen and what that should look like (hint: sooner would be good).

6) Social marketing and social commerce are moving to the center of the marketing plate.  Ok, you've experimented and hopefully had enough success to say this is no longer a novelty.  The conversation with your customer is only going to continue to ramp up from here. Do you have the resources to listen, converse, measure and maximize the power of the dialogue?

7) You're going (or thinking about going) global.  With U.S. e-commerce maturing, many reatilers are looking for growth in new places and finding that it really is a whole new world out there, with plenty of challenges.  Do you have a roadmap (when, how)  for entering new markets or better serving those that you cover?

Chances are your e-commerce business has become more sophisticated and complicated than it used to be.  That's to be expected given what it needs to deliver. 

Creating (or updating) a strategic plan for the online channel doesn't have to be (and really shouldn't be) a monumental effort.  After all, you have REAL work  to do, and things in e-commerce change rapidly.   But, taking some dedicated time to get everyone informed and on the same page on what's important in the new reality, where your resources will go, and how you'll measure success will allow you to execute better, have more focus, and, yes, react more nimbly to new challenges (even recessions) when they occur.

The Mom & Pop Store: A Book Review, a Personal Perspective, and 5 Lessons for E-Commerce

I'm just back from a 2 week vacation where finally, for the first time in nearly a year, I had time to read books.  While I promised myself ahead of time that those books would not be related to e-commerce or retail, one of them was, and I am thankful that I allowed myself to break the "no working on vacation" rule.

Robert Spector's book " The Mom & Pop Store: How the Unsung Heroes of the American Economy Are Surviving and Thriving"  is well worth reading by anyone in e-commerce, retail, marketing or customer care.   While the book centers on the challenges and triumphs of small local brick and mortar businesses, there are lessons to be gleaned for anyone who interacts with customers in any channel (especially e-commerce, where personal  connections with customers are unfortunately rare).

Drawing from his own personal experience working in his family's "Mom & Pop" meat business, Spector explores the history and perspectives of dozens of small merchants from grocers to jewelers to booksellers to restaurateurs.  They range from century old legacy family businesses to 1st generation entrepreneurial ventures.

These business owners are passionate, innovative, resilient, service oriented and deeply involved in their communities.  No strangers to change, many of them are operating successful e-commerce stores in addition to their core brick and mortar businesses.

This book resonated for a personal reason.  While I was away, I periodically checked the news.  The headlines of the recession continued.  Last week's big news was the unemployment rate, now topping 10%.  The last time that happened was in the early 1980's, which coincided with my graduation from college.  Broke and discouraged by the lack of "real" jobs for new college graduates, I took a part time retail job in what could easily be described as a "Mom & Pop" store.  Without expecting to, I became a merchant. I checked in the new merchandise.  I decorated the store windows.  I helped customers (many I knew by name) and rang up sales.  And most surprisingly, despite the low wage, sore feet and weekend hours, I loved it.  That "Mom & Pop" experience was the foundation of my retail (and later e-commerce) career, and it taught me life long lessons about customers, communities and the importance of humility, whether you're selling in a store or selling online.

As I read Robert Spector's book, I realized how much these successful Mom & Pop stores have in common with one another, and how much the e-commerce community can learn from the guiding principles of successful Mom & Pops.  Here are my 5 favorites:

1) The store is uniquely yours:  I've written in the past about the importance of a compelling and unique value proposition.  Mom & Pops continually face stiff competition from national big box stores and e-commerce giants that under cut them on price and over do them on selection.  The smart Mom & Pops have done their homework and found their niche; the thing that they can offer that no one else can.  Read the story of a small urban grocer who had the nerve to get rid of Coke and Pepsi in order to carry an exhaustive selection of old fashioned bottled soda pops.  He's no longer slugging it out on price with big grocery chains, he's the long-tail merchant of soda pop and his customers love it.   Read about a tiny ice cream shop in Philly that still sells ice cream from a 5 generations old family recipe that defies the science of frozen desserts and keeps customers coming back for more.  And read about the small hardware store in Washington, D.C.  that's just blocks away from a Home Depot and takes care of customers with a well edited assortment and over the top service.   Whether it's a unique product, a unique experience or a level of service that can't be matched, these retailers (like good e-commerce merchants) have something special that is theirs alone.

2) It's personal: E-commerce sites take pride in offering algorithmically driven personalized product recommendations. Great, but is there a human touch to the site, to the service?  Read about the jeweler who visits a long time customer in the hospital.  Her terminal illness has caused her fingers to swell, so he gently cuts the ring off of her finger and has it re-sized so that she can wear it during her final days.  Read about the florist who reaches out to customers who have lost a loved one with a bouquet and a hand written note after the funeral and visitations are over.  On a brighter note, I recall buying swimwear from Landsend.com last year and receiving a friendly phone call the day after the package arrived to see if I needed to exchange a size.  Sure, e-commerce thrives on automation, but a true human touch at the right time is something your customers won't forget.

3) It's the community, stupid:  In the world of e-commerce, social networking and community are things we treat as somewhat novel and new.  Ask any successful Mom & Pop store and they'll tell you that the community is the essential foundation of their business and always has been.  Your reputation is all you've got.  Of course people talk about you.   When people shop, they connect with others, keep on top of community news and gossip and exchange information about who's got great products, who's having a sale, who sold them lousy meat last week.  Mom & Pops donate to local causes, sponsor Little League teams, hang banners out to congratulate high school graduates, take up collections for a local business or family in need.  They do it not as a means of promotion, but as a way of life.  They know that the community will be what pulls them through their own tough times.  Read Spector's example of a florist who lost everything in a fire and was back in business within 6 hours, thanks to the outpouring of support from the community (including supplies and resources from competing florists!).  Read the example of the grocery owner who was shot in a robbery.  The people of the community, including other local businesses, took up collections for the injured man and helped the family get back on their feet.

4) Invent, then re-invent. Staying in business is about change.  Read about the ethnic grocer who introduces new items as the neighborhood shifts from European immigrants to Hispanic immigrants.  Read about a long standing neighborhood bakery that now focuses on weekend business and smaller cakes and bread loaves for smaller families.  Read about an upscale London butcher  who now carries premium quality seasonal game since his neighborhood has become increasingly affluent.  Your audience might change, their needs and tastes might change, but you can still be meaningful.  You have to be.

5) Overcome adversity. Big adversity: Not every business survives recessions, fires, floods, death and destruction, but those that do teach us valuable lessons.  Read the chapter about Hurricane Katrina and the passionate bookstore owner who managed to get the store re-opened within 6 weeks after the disaster (it took Barnes & Noble 6 months to re-open).  Read about the beloved New Jersey deli that burned to the ground, only to re-open 9 months later to lines of customers wrapped around the block.  Many of the businesses in this book have been around for nearly a century and have endured much more than the e-commerce industry's "bubble" or the current recession.  They've taken the long view and weathered the inevitable hard times with dignity and perseverance.

Of course, I highly recommend reading "The Mom & Pop Store" in a beach chair with the sun on your back and a drink in your hand.  If that's not in the cards, I still recommend that you read it.  Every e-commerce leader has an inner-merchant, and this book should help you get in touch with yours.

For the record, the rest of the books I read on vacation don't have anything to do with e-commerce or retail.  Unless of course you have a lot of nasty office politics to deal with, in which case I recommend Roderick Graham's "The Life of Mary: Queen of Scots: An Accidental Tragedy".  Nothing quite like imprisonment, poisonings and be-headings to help you keep things in perspective.

Webinar Replay - More for Manufacturers. What is the Meaning of Your E-commerce Life?

If you missed last week's webinar with Elastic Path, From Manufacturer to Retailer: Expanding Your Brand Through E-commerce, you can view a recording of the webinar here

You can also check out my guest blog post on getelastic.com highlighting a portion of the webinar: Getting Your Product Content Ready for the Consumer

Still hungry?

A critical decision manufacturers face when establishing their e-commerce presence is "What is the meaning of life?", or more practically, "What is our site's role in e-commerce?"  The obvious answers of "we want to sell more product" and "we want to build our brand" immediately surface, but the subtleties of how you choose to do that can be much more interesting and complex.

While manufacturer websites are cited as one of the first places shoppers go to get product information (source: Forrester Research), these sites, while growing, aren't getting a lion's share of the online sales. See the below chart from e-Marketer:

It may be that the commerce capabilities on these sites are limited. It may be that consumers simply want to research on manufacturer sites, then go to the retailer (bricks or online) to buy.

Whatever the case, manufacturers can win by determining where they can add value to the shopping experience and how they can best facilitate the transaction, even if it's on a retail partner's site instead of their own.

Here are a few note able examples from the webinar showing distinct approaches to handling the transaction:

First, online powerhouse Nike.  Great site, well executed shopping process with extensive imagery and product information.  This is all about Nike capturing the transaction and customer relationship themselves, and they do it well. Note that access to retail partners is hardly noticeable at the bottom of the page and the store locator is utilitarian at best, no indication of whether or not those stores even carry the product I'm looking at.

 

Contrast the approach above with Patagonia, who offers a choice of seamless options to purchase, either on their own site, or at a retail partner.  They let me know that the item I'm looking at is available from a variety of partners, and take me right to the appropriate product page, with identical product descriptions to assure me that I am indeed getting the item I want.

Callaway Golf offers a good shopping and transactive experience, but then passes the order to a nearby retail partner for fulfillment  - a nice way of servicing the customer and adding value for retail partners: 

 

Samsung does the ultimate in combining great decision tools for both product selection and retail selection.  The shopping tool helps me choose the dimensions, price and specifications of my TV. Then, I can see what retailers have the item in stock and even do a price comparison.

 

Whether it's one of the above or somewhere in between, the options for taking or transferring the transaction should be  carefully considered, factoring in:

• Your brand's pervasiveness online and offline - how easy is it for customers to buy your product somewhere else?

• The size/scale and capabilities of your retail partners

• Your relationship with your retail partners

• Your own capacity/infrastructure for handling fulfillment, service and direct customer relationships

• Your brand and business objectives: is it about building a direct customer relationship? Or helping your retail partners sell more of your product? Or both?

Above all, think creatively: where can you add unique value in the customers research and purchase process? And, where can you bring value to your retail partners?

10 Reasons Why Some Manufacturers Still Ponder Selling Online

Earlier this month, I read a blog post from E-consultancy titled "Why Not Selling Online Can Damage Your Brand".   The piece covers many of the key reasons why e-commerce has become a must have for brands, and why not selling online can be more than a missed opportunity; it can actually damage the brand. 

As a long time veteran and advocate of e-commerce, I agree with all of the points in the article.  Yet, having worked with some notable manufacturer brands who have yet to take the plunge into online selling, I can offer that for many of these companies, the decision to sell online is not the "no brainer" that it might appear.

Manufacturers who sell online don't just need to become web merchants, they need to become retailers, and that presents some interesting and often sticky strategic issues.

1. Lack of in-house retail or e-commerce talent.  This means that manufacturers may not know what questions to ask or understand the complexity of what they are getting into.  It also means that there may not be a logical choice for a leader of the strategy, planning and execution of an e-commerce initiative.
2. Concern about disruption to retail relationships.  This typically tops the list of issues, as manufacturers attempt to walk the delicate line between building their brand through direct to consumer sales and cannibalizing their retail partners.  Every manufacturer selling online has faced it, and there are many flavors of potential answers to striking the balance.
3. Product offering and pricing decisions can be mired with complexity.  Manufacturers' product lines many not be "retail ready", meaning they have been assorted for the retail buyer, not the consumer.  Thus, there are key decisions to be made around the online offer. The whole assortment? An edited version? Exclusive products? Clearance items? New test products?   And then there's pricing.  There's a need to offer the consumer a competitive value,  yet the need to be sensitive to retail partner margins and not undercut.
4. Product information and assets are not e-commerce ready. Manufacturers have a unique opportunity to showcase their products online, and consumers will likely have an expectation that the best and most extensive product information will come from the manufacturer's website.  Yet, many manufacturers find that their product images and copy are geared towards product spec manuals for retail buyers vs. online shoppers.  Re-purposing and enhancing product assets for the web can be a significant undertaking.
5. Fulfillment is not set up for single piece consumer orders.  Separate processes and systems may need to be set up to effectively manage consumer shipments and returns. Ditto for new packaging. Outsourcing many need to be investigated and considered.  Similarly, managing inventory for e-commerce can be complex if the manufacturer's systems are not set up to buy and reserve inventory for the online store, or allow for easy access to overstocks.
6. Customer service takes on a whole new role.  As with fulfillment, discreet processes, systems and people will be needed for e-commerce. Whether or not to turn service over to an outsource partner can be a critical strategic decision.  Build the team and infrastructure and reap the benefits of direct communication with your customers? Or hire experts with the people and systems in place to get you up and running quickly?
7. Marketing activities have been focused on B2B relationships and broad consumer branding.  Digital direct response marketing may not be part of the company's DNA, so understanding search marketing, email, affiliate relationships, retail promotions, social media and the whole balance between traffic and conversion becomes a new skill set need.
8. E-commerce ecosystem components need attention.  While the search for an e-commerce platform will likely be part of the manufacturer's path to online selling, equally important is the suite of supporting systems (many of them possibly in "legacy" condition) that will need upgrading or readying for integration. Order management, CRM, warehouse systems, the list goes on.
9. Resources, Resources, Resources (People, Money, Time).  All of the above is a lot of work, and everyone has day jobs.  Not to mention, this sounds like it could be a significant investment.  Maybe we're just too slammed to deal with this now?
10. Lack of a deliberate process to work through #s 1-9.   It's easy to get confused and overwhelmed by the decisions and intimidated by the potential costs, especially when you're busy running your core business.   A host of manufacturers have made the transition to direct online selling successfully and profitably.  If you have not yet taken the plunge, it's probably high time that you start the investigation process to wrestle these issues to the ground.  None of them are insurmountable, but they do require some disciplined thought and decision making.  Get some help from a knowledgeable, experienced expert to help you identify the issues and opportunties, and engage in a process to work through the answers.  Your brand deserves it, and your prospective consumer customers are asking for it.

Keeping up with Your Customers: 5 Fundamentals for Tackling the Multi-Channel Monster

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.

Why CRM Matters More Than Ever in Tough Economic Times

Everywhere I go, someone is trying to save me money.  The grocery store.  The department store. Restaurants. And of course e-commerce sites.  It's everywhere: coupons, signs screaming "sale", huge percentages off.  It's like every retailer in the world is dolling out virtual dollar bills.

No question, we're in a nasty economic situation and no question, it's taking more incentive than ever to get the register to ring.  As a retailer and as someone who has spent the better part of her life trying to crack the code on getting customers to buy, it pains me to no end to see these genuinely well-intentioned efforts by retailers executed in a way that is costly and ineffective in achieving the desired result.  Here's my latest example:

There's a spa/salon not far from my house.  It's fantastic and I've been going there for years.  Actually, as I've aged, I find that I go there more frequently as there's a lot more work that needs to be done.  Brows, nails, toes, hair, the occasional facial when the wrinkles get too hard to hide.  You get the point.

I am a regular, to say the least.  Every 3-4 weeks for haircuts and brow waxing.  Typically every 4-6 weeks for pedicures and periodically, a manicure for an important meeting or occasion (too much typing to get them on a more regular basis).  While the economy is tough, and I, like everyone else have found things to trim back on, my hair and nails will not stop growing.  So it's doubtful that my spending habits at this salon will change much in the months or years ahead.

This salon has my appointment and purchase history for the last however many years.  A lot of years.  They can probably predict when I need an appointment better than I can.  The technicians all know me by name and are always pleasant to deal with. We have a nice relationship.

So, here's the kicker.  I have right now, sitting in front of me on my desk, the following:

• A letter from my hairdresser offering me $10 off my next haircut
• A gift card from a nail technician offering me $15 off my next service combo of $65 or more
• 5 (count them) $5 off coupons good on my next service or retail purchase now thru April.

So, what's going to happen?  I'll use all of them.  But, as you've probably figured out, I would have made appointments and paid for services whether or not I had this pile of discounts.  I have no doubt that business for this salon is probably not what it was a year ago (hardly anyone's is, after all).  But, they are now making their business worse by spraying discounts far and wide, giving many of them to customers like me, who show no slowdown in their purchase activity.  They'll be making less money on me without the benefit of any extra business.

I know, implementing and executing well on CRM is not an easy task, but if this one anecdotal example is any indication, the payoff would certainly be there.  What if the salon only mailed coupons to those customers that they hadn't seen in 6 months? Or those customers whose spend over a certain period of time had slowed by a certain amount?  The really painful thing here is that they HAVE the data.  I know.  Every time I call for an appointment, the service rep diligently types the info into a computer and verifies my contact and credit card information that they have on file.

Managing customers is about more than having a nice relationship, it's about having a smart and profitable relationship.  In these times, can we afford any less?

Nudge Your E-commerce Customers and Grab the Low Hanging Fruit

Often, I'm asked by clients or prospective clients to look at their e-commerce websites and identify low hanging fruit.  Usually, that means unearthing opportunities to improve the customer experience, and thus, improve conversion.

Here's one way to grab some low hanging fruit: give your customers a nudge.

In any given e-commerce shopping and buying experience, customers are faced with a large number of choices to make.  I'm not just talking about selecting the product to buy. It's all of the various configurations of choices that come after you've found the item that you want:

• What color and size do I choose?

• What shipping method do I want?

• Do I want to sign up for email, and if so, do I want HTML or text?

• Do I want the item shipped to my billing address or a different one?

• Do I want to save my personal info or create an account for next time?

• What credit card do I want to pay with?

• Do I want to donate extra dollars to a good cause?

The list goes on.  Depending on the nature of the product, there can by a myriad of custom configurations of a product (like the Timberland boot builder) or options for receiving a physical product vs. a digital version (such as an airline ticket or software product).  As many online shoppers have discovered, on some websites, it's all too easy to make the wrong choice.  In fact, some websites make matters worse by having the wrong choice "pre-selected", causing frustration, abandonment, or worse, an erroneous order followed by dissatisfaction and returns.

By dissecting all of the places on your site that your customers need to make choices and gently "nudging" them towards the appropriate choice, you can make your customers happier AND improve your e-commerce business results.  

Fortunately, some great brains at HBR have written an article and created a useful decision tree methodology for those of us who lead e-commerce efforts.  The article, Nudge Your Customers Towards Better Choices is a must-read for any information architect or designer faced with getting customers through the online decision making process, and for e-commerce business leaders wrestling with the pros and cons of making "default" choices for customers, either with the intent of achieving a business results (such as getting more email sign ups) or improving customer satisfaction (such as presenting personalized selections).  Note: you will need to pay for this article on the HBR site, but it's only $6.50 and, in my view, well worth the investment, as you'll probably refer to it again and again and put the decision tree they've created on your bulletin board.

Fundamentally, the HBR authors divide the world into two key types of "default" decisions that can be presented to a customer: a) mass defaults, where a retailer "pre-selects" the option that a majority of users will likely choose and b) personalized defaults, where implicit or explicit information about a customer is used to "pre-select" the best option for them. 

Both of these default types come in a variety of flavors, all of which are described in detail in the article, with examples of appropriate usage based on the business objectives and customer information available.   But, to quickly make they point on how useful nudging can improve the customer experience and business results, here are a few examples of my own: 

First, an easy one.  A typical illustration of an e-commerce  mass default is below.  When it's time for the customer to choose a shipping option, pre-selecting "standard" shipping makes sense.  It's the least expensive option, and if I have special circumstances that cause me to need expedited shipping, I don't expect the retailer to know that.  Of course, if they can highlight messaging about shipping deadlines here around key gift-giving holidays, all the better.

  

In the above example, specific info like the anticipated date of delivery would go a step further to helping the customer make the right choice.

Now, let's look at an example where the wrong mass default is a likely source of frustration.  On the Allen Brothers site, notice that the default quantity choice is set to "0".  Why not set it to "1", since customers ordering will order at least one, and must choose a quantity in order to add to cart?

 
How many customers do you think mistakenly hit "add to cart" without choosing a quantity?

Personalized defaults, when well executed can lead to increased conversion, loyalty and reduced returns.  Consider myShape.com, the women's apparel site that "pre-selects" the right size for the customer based on the extensive body measurement information she provides.  Assuming they have the right data, this saves customers the hassle of determining the right size, and reduces the risk of returns.  This is a form of personalized default HBR calls a "smart default".  I agree, it is smart.

Then, there are those mass defaults that would be so much more effective if they were personalized. I'm a petite.  I've stopped growing (at least vertically), so that's not likely to change. Yet, every time I shop online from my favorite stores, I have to "override" the default "regular" size setting. Sure, most women are "regular", and while most stores probably don't know enough about me to recommend a specific size, they could easily get enough data from me, either in my profile or in my purchase history to pre-select "petite".  Incidentally, when I was rushing through some shopping last holiday, I mistakenly ordered "regular" from two websites (see eddiebauer.com below) and promptly returned them, I was too aggravated to make an exchange.

    

After reading the HBR article and doing a quick drive by on a few sites, I've concluded that paying close attention to key points of customer choice and applying the right form of defaults is an area of untapped opportunity for many. If you're under pressure to improve your business results through low hanging fruit (and who isn't these days?), try this:

Buy and read the HBR article. Identify all of the decision points on your site where defaults are used or could be used. For each, ask yourself:

• Is this the appropriate form of default?
• Is the appropriate choice pre-selected?
• Are there areas where we're using mass defaults when personalized defaults would be more effective?
• What customer data could we gather or what data do we have that would help us offer a truly helpful personalized default?

Then, set up some A/B tests, and gently "nudge" your customers to the right choice.  Chances are, you'll see that a well placed nudge might just push them over the "buy" threshold, and allow you to pick some low hanging fruit.