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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).

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.

Time to Drop the “E” in E-commerce? A Practical (and possibly selfish) Perspective

At a conference I attended a long time ago (probably at least a decade ago) I remember an industry analyst (don't remember who) saying something along the lines of "we'll know that e-commerce has arrived when we no longer have to put the "e" in front of it."

Well, maybe we've arrived. Over the last month there have been some declarations and murmurings that it's time to drop the "e". Forrester's Brian Walker suggested it at the Internet Retailer Conference, and a few blogs have since echoed the same.

E-commerce is undeniably a part of everyday consumer life. Much as we predicted years ago, consumers have woven the web into a shopping process that now spans channels, devices and touch points. The internet influences nearly half of all retail sales. Regardless of where the transaction occurs, the web is a vital part of the discovery, research, consideration and decision process. That's of course the argument for dropping the "e". Customers don't think of e-commerce sites as a "channel" anymore than they think of their phones or retails stores that way. So why should we?

The answer to that question (and ultimately the answer to whether or not it is indeed time to go "e"-less) lies within the perspectives and practices of the retailers and the companies that support them.

For enterprise/advanced online retailers and suppliers, dropping the "e" not only makes sense, it symbolically removes obstacles and enables bigger thinking. An enterprise level platform provider today may provide e-commerce infrastructure, but must also provide mobile, multi-channel and social commerce services in order to meet the needs of its retail customers. The entire retail commerce ecosystem is involved. Advanced retailers planning the present and future needs of their business must look at online selling in relation to all other touch points and channels. For these companies the "e" can represent a restrictive silo, limiting strategic progress.

But, what about those retailers and service partners that are successful, but not yet quite so advanced? Here's my take.

Over the last 15 years, e-commerce has become a specialized discipline, or rather, a set of specialized disciplines. While customers, thankfully, shop our websites like it was second nature, it takes channel knowledgeable people on the back side to do it well.

Think about the disciplines necessary to do e-commerce well: e-commerce merchandising, e-commerce interaction and visual design, site analytics and optimization, online marketing. If someone is a great search engine marketer, do we say they are a great marketer? Sure, we could, but calling them a great search engine marketer helps us to define their specialty.

For many companies who are either in the early stages of online selling or who to whom digital DNA is not a given, the "e" is necessary, as it provides a foundational symbol for a specialized core competency.

Just in the last month of my work I have encountered the following situations that illustrate this point:

• A mature multi-channel retailer with heavy catalog DNA and without seasoned online leadership finds that they need to build e-commerce expertise in order to fully realize the online and multi-channel potential.
• A regional brick and mortar retailer taking their business online for the first time must create new positions and processes to accommodate e-commerce
• A brand manufacturer in the midst of an extensive re-design of the e-commerce site, previously 100% outsourced, is now taking steps to own and manage their online presence internally

These guys shouldn't drop the "e". In fact, I could argue that they need to get some "e" in a big way. In a few years, as their "e" competencies mature and develop, they will likely see the benefits to dropping the "e", at least in some aspects of their business and infrastructure. But for now, the "e" serves a valuable purpose. It delineates commitment to learning and growing the channel.

Are you ready to go "e" free? Take an honest assessment of where you are in your online competency:

• Do you have knowledgeable online specialists who are experts in their disciplines?
• Is the online channel at the table for all company strategic discussions and is it a part of all/most major company initiatives?
• Are the other channels at the table for strategic discussions about the online channel? Is there a cross/multi-channel component to all /most web initiatives?
• Do your operations and IT teams support and build solutions that encompass multiple channels and touch points as a matter of course?
• Is being digitally savvy a characteristic of most employees in your company, regardless of what department they work in?

If you've answered "yes" to all or most of these questions, you've already dropped the "e", at least figuratively.

If you answered "no", the e-commerce team is likely the digital center of gravity in your organization, or it might be just getting up and running. You probably need that "e", at least for a while.

So, is it time to drop the "e"? Maybe yes. Strategically. Where it makes sense. 

For some, holding on for a while is a smart move. 

Then there's the selfish side of me. As someone who uses ecommerceconsulting.com as her blog, I'm a bit attached to the "e", at least for the time being.

 

 

Want your E-commerce Project to Move Faster? Try Slowing Down: New Data Supports the Tortoise and Hare.

 

 By most people's definition, I'm a fast mover.  I learn fast. I speak fast.  I walk fast (I'm only about 5'2 so I have to in order to keep up with everyone else), and I get things done fast.  One of the reasons I've stayed in the digital world and embraced e-commerce as a career is that it's an industry that likes to move as fast as I do. 

Why then, do I become so frustrated when I hear clients say "we've got to move fast on this; I expect to get a new site up in XX days", or when the first question they ask is "so, how fast will this get done?" I like to work quickly.  I respect speed, as a general rule.  But, I detest poor execution.  My frustration typically surfaces when the client is moving too quickly to execute well.  In other words, they are jumping recklessly into execution before they have given the necessary strategic issues the time, thought and discussion that they deserve. 

Having spent plenty of time in the "real world" running e-commerce businesses, I have seen my fair share of short deadlines and jammed project queues.  I've also seen plenty of big hairy complex projects breeze through execution on time, on budget and error free, despite tight deadlines. I can cite example after example where taking time to define strategy or delaying production to deal with an unexpected strategic issue has sped projects along, and probably even saved them from total failure. 

At last, I now have some data to back up my experience and beliefs. 

A recent article in the Harvard Business Review, "Need Speed? Slow Down", got me so excited that I actually left my tea water boiling on the stove and almost ignited my home (seriously).  In a study of 343 businesses (conducted with the Economist Intelligence Unit), here's what they found: 

• Companies with the "go go go" approach had lower sales and lower profits than those that paused at key moments to be sure they were on track. 
• Firms that took the slower approach improved their top and bottom lines, averaging 40% higher sales and 25% higher operating profits over a 3 year period. 

Not convinced? Here's what I consider to be the true enlightenment of the article: not all speed is the same.   HBR explains that there are two types of speed, and companies often confuse or intermingle the two.

First, there is operational speed, which is increasing the pace of production.  Then, there is strategic speed, which is reducing the time it takes to deliver value.  The key here is that strategically fast companies, as odd as it may sound, take their time.  They take the time up front to be sure they have alignment, definition and commitment to success.  They take the time to review how the work is going along the way, and they take the time to capture and communicate lessons learned. 

My personal take, based on experience, is that operational speed without strategic speed is a no-win proposition, or a least a short lived one.  You can pile on more resources, remove production bottlenecks and horsewhip everyone to go faster faster faster.  But, if the strategic alignment, reflection on progress and post-game recapping isn't taking place, the operational gears will grind to a halt.  Decisions won't get made at critical times.  Team members will become demoralized and confused. Quality will suffer. Customers will leave (or never show up). 

If you are lusting after speed, ask yourself which kind of speed and why. To deliver value? To reduce operational time/cost? Or to quiet down an impatient CEO or board member?  First step: be honest about what's driving the need for speed.  Second step: if strategic speed is what you want (and it probably is), slow down.  Put some time in getting aligned and reviewing progress. You'll probably deliver a lot faster and make your customers (and that impatient CEO or board member) a lot happier.   

See you at the finish line.  I'll be the one in the hard green shell. 

A Lesson from Dad: Why Your E-commerce Platform Search Isn't Just About Software

When I was a kid, I used to love to listen to my father talk about politics. He was opinionated and unfalteringly convinced that his point of view was not only right, but shared by "all" Americans (at least the smart ones).  Today, I don't always agree with my dad's political views (and I'm pretty smart), but there's something I remember him saying during an election that I very much agree with, and have found to apply in many areas of my life, especially e-commerce:  "Issues change."

During the heat of an election long before I was old enough to vote, my father was frustrated by the fact that a single issue was swaying the voters to choose one candidate over another.  "Hell," he said, slapping his newspaper down like a flyswatter, "this guy is going to be in office for at least four years, maybe eight, and we're acting like there's only one problem that matters.  This issue will hardly be on the radar 6 months from now and we'll wake up and realize we've got the wrong guy!"  

The bigger point, of course is that that hot issues come and go.  When you make an important decision about someone, you need to take the long view and ask "is this the kind of person who I feel confident about, who has the kind of character, experience and perspective necessary to do a good job beyond the immediate issues at hand?"  The issues are a factor of course, but voting on those alone is short sighted. 

So, what does this have to do with e-commerce? Plenty, especially if you're thinking about a platform search.  Recently, in the middle of a very complex e-commerce solution search, a client and I were evaluating the options.  I asked the team for feedback on what they'd seen so far.  One team member immediately said, "I am not sure about company ABC.  I liked them, but the platform didn't offer a couple of features out of the box like company XYZ's did."  So I asked: 

Which company had done the most research on your business?  Answer: company ABC

Which company asked you the most questions during the call? Answer: company ABC

Which of the two companies would you prefer to do business with if the features were the same? Answer: company ABC

Which company would you choose? Certainly there are so many other things to consider. Track record, price, speed to market, installed client base, the list goes on.  But, at the end of the day, it can be easy to get side tracked by a slick e-commerce feature, just like it can be easy to let the issue of the moment be the focus of your political decisions. 

There will be another e-commerce feature that you want next month, and several more the year after that. And, not all of them will be necessary or even appropriate for your business.  Unless you have a large and highly competent IT team in house (in which case you probably really do want just e-commerce software), you are choosing an e-commerce solution provider who will be your partner in building a successful business, and the decision will likely be one you live with for many years.  Don't let the feature of the moment become the focus of your decision.  Features change.  Just like issues change.  Thanks, Dad. 

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.

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.

E-commerce History as Teacher: The Brands Have Changed, but the Lesson Lives On

I don't have a hoarding problem.  But when it comes to e-commerce, I admit I am a pack rat.  When I read a report or an article about selling online that hits the mark I tend to save it and refer to it multiple times over multiple years.  Yes, this industry moves fast and changes frequently, so sometimes dumpster diving through old files is good for little more than amusement (about a month ago I found a box full of mouse pads that e-commerce companies used to send me as "gifts" when I ordered online in the mid 90's....almost all of the companies have since flamed out).  But many times, I come across something that I'm really glad I kept. 

Earlier this week, I re-surfaced a Forrester report from (get this) 2000. I saved it because I was working at Eddie Bauer at the time and was unbelievably proud of this statement from the report:

"Style-obsessed retailers like Williams-Sonoma and Banana Republic will continue to jump into online sales with sites that deliver flash over substance, exciting and then disappointing potential customers.  Unable to resist force-fitting their offline branding campaigns into their Web boutiques, they will fall further and further behind retailers like Eddie Bauer that understand that the core of online branding is serving user needs"

Ok, so that was a long time ago.  Williams-Sonoma, Banana Republic and Eddie Bauerall now have great e-commere websites that are a true pleasure to shop and reflect and enhance their brands.  But it wasn't always that way.  And for a good many brands today, it's still not that way.  Top tier retailers and manufacturers frequently struggle with how to make the best of the e-commerce channel and strike the delicate balance between immersing visitors in the richness of the brand while still creating a focused shopping experience that results in a transaction.

Recently, I did an in-depth shopping audit across e-commerce sites at 15 brands (all recognizable names).   It became clear early in the audit that this issue of balance between brand building and a useful commerce experience is alive and kicking, a good 9 years after the Forrester article first hit my desk.  Only the names have changed.   Here's a quick summary of some of the most common mis-steps:

1. Long, slow, heavy flash intros (yes, they are still out there!) 

2. Links to my account, service , search and other critical functions are hidden in favor of gorgeous photography

3. Navigational categories that reflects the retailer's nomenclature instead of the customer's language (i.e. The Market Street Collection)

4. Search functionality that brings up null results for common terms like "suede shoes" or "hiking boots" (search was broken on just about all sites I visited!)

5. The ability to sort the category thumbnail page alphabetically by product name (who cares?) instead of basics like color, size, price. 

6. Avoidance of customer reviews and ratings due to fear of a negative review (see my previous post on this one!)

7. Customer service, return policies and shipping information buried deep on a "FAQ" page instead of surfaced at critical decision points in the shopping process.  Most service pages did not list call center hours or set expectation about when email inquiries would be answered.

8. Points of real value, like free shipping offers not surfaced until late in the shopping process instead of on a home or category page.

9. Product pages that "show" but don't "tell":  great photos but little or no copy that answers real consumer questions or highlights benefits.

 10.   Overuse of icons and symbols for technical features that are hard to decipher and de-code.

So, how does this happen? Obviously any one of the above situations does not reflect well on any brand.  Yet they occurred frequently across numerous e-commerce sites for top brands during my shops.  I think it happens for a number of reasons:

• Executives and employees at many companies rarely look past the home page of their e-commerce sites.  Approvals and creative reviews are limited to visual appeal and adherence to a style guide vs. the delivery of critical shopping functionality. 

• Agencies hired to lead or assist with site design are hired for their experience with the brand's other media or for their ability to grasp the brand's visual essence vs. their expertise in e-commerce interaction design.

• Brand managers and creative directors shy away from advocating helpful customer tools like reviews and sort/filter tools for fear of becoming to "sales" vs. "experience" focused.

• Brand terminology (The Market Street Collection, etc.) works for store signage and print media (and even in e-commerce promotional space), but fails as navigational
  nomenclature, something rarely thought about during product development.

• Many companies under-invest in copy writing and content development specifically focused on web user goals.

I think Forrester said it best back in 2000, but I'll say it again. Enhancing your brand's image online means paying attention to more than the visual integrity.  The nature of the e-commerce channel requires that we pay equal (at least) attention to the customer actions the site must deliver. Otherwise, the brand experience is eroded.

While many e-commerce sites have clearly figured this out and found the delicate balance between form and function, it's clear from my recent experience that as an industry, we're still seeking guidance and answers in this critical area.   Good thing I'm a pack rat. But I don't have a hoarding problem! (Anyone want to buy a sock puppet mouse pad?)