Channelling your energies

Retail businesses need to channel their energies with online, catalogue and physical businesses talking the same language, says Fadi Shuman, co-founder of Creative digital agency Pod1.

Fadi Shuman
Fadi Shuman

Retailers have realised that having an online presence is not just a ‘nice to have’ but also an essential in today’s world. At the start of this century all retailers wanted to do was build a brand website and make sure it worked. Then came Ecommerce 1.0 – being able to sell online no matter what the user journey.

More than ever though, today these sites have to make money and be profitable. In fact, a brand’s e-commerce store is fast becoming the highest revenue-generating element of the business – its flagship store.

Yet those retailers who will lead into the next decade and beyond will be those who understand that a true multi-channel strategy is one that works as a whole. It’s one that puts the customer at the centre of its universe. It shouldn’t matter where they actually transact from, all touchpoints are integrated and the data centralised.

Today, second and third generation websites are built with social, personalisation and multi-channel in mind. That is to say, a successful multi-channel business will be one whose combined whole is greater than the sum of its parts.

The challenge now is to convince retailers that online and offline must work together. Clients know that online is growing in importance and consumers will increasingly shop for goods and services online, particularly as issues such as payment security and delivery charges and dates are ironed out.

In fact, the Interactive Media in Retail Group (IMRG) forecasts that by 2011, online sales will have expanded by another 320%, to be worth in excess of £60bn per annum, and will represent almost 20% of all retail sales.

Up to now, online sales have grown independent of business streams such as catalogue and store sales. The individual units of a company are still operating independently of each other and fighting for the same customers with different reporting lines, marketing budgets and customer service centres. Quite simply, retailers are cannibalising sales – and they’re starting to realise that.

According to Robin Terrell, managing director of John Lewis Direct, multi-channel customers spend twice as much with the retailer per year than store-only shoppers. Furthermore, 38% of customers who select the deliver to shop for collection service go on to make an additional purchase in store when they pick up their order.

One reason it has taken until now for brands to start such conversations is the issue of technology. Till systems, stock accounting, website data, catalogue data and so on all need to be centralised. Businesses have traditionally been split into separate teams around channel lines. The technology on the website doesn’t necessarily talk to the store or the customer services department dealing with the catalogue.

Brands must stop thinking in silos and start integrating the businesses. And that must be done across technologies, marketing, design and commercial. They must think about the business profit and loss lines, how they account for stock and sales. It entails a paradigm shift in mentality with the business seen as an organic whole. The marketing directors of the catalogue, e-business and the store cannot fight over their fiefdoms.

It is clear that consumers are using the three touchpoints of catalogue, in store and online, but they’ll each be using them in different ways – some might only ever research online and buy in store, others will only ever buy over the phone and still others might interact with the brand primarily through its website.

The important thing to remember is interaction will be very different in each occasion. It’s integrating those three experiences and that takes time and effort. It’s important to create triggers to action: the signposting you use in store, the messaging on a catalogue driving customers to a rich media website. At the moment there are minimal incentives for a customer who has been in the store to go on to the website.

An integrated, multi-channel strategy will pay dividends for brands putting the customer at the heart of their experience. If the business is not siloed then nor will the customer experience be.

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