Monday, 22 September 2008

Successful Cross-Channel Retailing Is All About The Experience

By merging physical and digital sales channels, retailers essentially hope that shoppers never leave without making a purchase because the experience was lacking or because items they wanted are not on the shelves. As online retail continues into its second decade, business strategies like customer relationship programmes and multichannel integration, that were once perceived as too complicated to integrate successfully, are now working in sync.

Multiple channels to market are therefore fast becoming the norm and the lines between these channels are blurring – particularly in terms of consumer expectation. Forward thinking retailers are moving towards a seamless customer experience across all channels. It is becoming less and less acceptable to have differential pricing, branding or experience across different channels, and successful retailers are rethinking both their organisational design and also their customer engagement strategies to ensure that their routes to market are cohesive.

The common perception is that the major driver for cross-channel retailing is cost saving through efficiency and effectiveness. Managing channels separately results in cost increases resulting from running separate order-management and customer service operations, multiple warehouses and fulfilment systems, and buyers and merchandisers duplicating effort across the different channels.

However, although emerging integration technology allowing cross-channel integration has been a key enabler, multi-channel growth is essentially driven by consumers. According to, 34% of consumers today use at least three channels when shopping. Research has also found cross-channel shoppers to spend up to 10 times more, to generate 25 to 50% more profit and demonstrate greater loyalty than their single-channel counterparts.

The core driver behind channel convergence then is customer demand.

So where do you start?

Well, Recent McKinsey research shows that only 15% of loyalty is gained from perceived product quality and promotional strategies, leaving 85% to the actual purchasing and post-sales experiences of customers. Point being that whilst establishing clear and consistent products and services is essential, the experience is what makes all the difference.

So one good place to start is to get your people culturally ready to make the most of all the channels your business takes to market. Whilst optimizing content, applications, pricing and product selection across all channels is important, the basic human experience at least should be seamless across channels. The person who answers the phone at your call centre should be equally as knowledgeable about your products and services as your store staff, consumers should be able to find out when and where items are in stock, and have you deliver or let them pick up their purchases as per their convenience. The returns processes, checkout processes, and customer journeys through your store, should be synchronised with and as easy as they are on the web. All this can be successfully done through human facilitation.

In summary, we’re talking about developing a cross-channel customer-facing culture that ensures your staff are making your customer’s journey as enjoyable as possible, with a view to building loyalty through experience and thus competitive advantage.