Magazine Article | April 1, 2003

The Emergence Of Cross-Channel Retail

Source: Innovative Retail Technologies

Only those suppliers who demonstrate best practices that cross Web, stores, kiosks, and call centers will be the thought leaders and solution providers of the future.

Integrated Solutions For Retailers, April 2003

Retailers have grappled and some have thrived with the emergence of multichannel commerce. With the advent of e-commerce, coupled with catalog and brick-and-mortar, retailers have been compelled to service customers in any channel their customers wanted to shop. Retailers come from all orientations: direct-to-consumer, e-commerce pure plays, and traditional brick-and-mortar stores - servicing single channels. Today, to be successful, retailers must view convergence of channels as a way of business and not just another passing trend. Retailers that can successfully service customers anytime, anywhere, and anyway customers choose will be set apart from the crowd.

Know Your Multichannel Customers' Needs
Retailers recognizing this trend have implemented systems to manage each channel without much thought given to the customer's experience. They are now faced with the challenge of keeping up with the demands of sophisticated customers who are very comfortable interacting with a variety of channels - Web, stores, kiosks, and call centers. Further, there is an increasing awareness that the various channels, if properly leveraged, can complement each other and create new opportunities for cross-channel marketing and customer retention. For example, when one channel is performing well and another is not, one can drive traffic to another channel based on cross-channel marketing campaigns driven by customer demographics, purchase history, or time-sensitive promotions. From a consumer perspective, the customer may choose to search through a catalog, order merchandise from the Web, receive merchandise from the distribution center, and return merchandise to a store. Consumers will zig-zag across-channels.

All Channels Have To Work As One
Bringing all of the channels together seamlessly and allowing retailers to interact, transact with, and service customers - ensuring high levels of customer satisfaction and loyalty - will be a requirement for all successful retailers. This confluence of the channels is currently implemented by only a handful of well-known leading retailers. As consumers become accustomed to this, it will be a requirement for all retailers in the near future. This confluence of the channels represents the migration from multichannel to cross-channel commerce.

To compete in an increasingly complex and growing cross-channel retail environment, retailers must look beyond capturing transactions or centralizing data and focus on how to manage the customer experience and service with the same level of consistency in all channels. Systems that are no longer siloed, but tightly integrated in real time, will be key. With recent advances in Internet technology and standards such as XML (extensible markup language), it is possible to traverse information on inventory, customers, orders, and service requests to virtually any channel customers wish to use, in real time.

Retailers looking to capitalize on this trend and gain significant market share in the coming years must take a hard look at their business practices and internal systems to ensure they can support the following cross-channel commerce initiatives:

  • Real-time transaction processing from any channel
  • In-store support of online and catalog purchase returns
  • Visibility of inventory in any channel from anywhere
  • Access to customer purchase history across-channels
  • Order fulfillment from anywhere regardless of order origination
  • Cross-channel sharing of loyalty and incentive programs
  • Seamless integration and data sharing with all enterprise systems
  • Robust point of sale and back office technologies
  • Up-selling, cross-selling, and personalization of the shopping experience in all channels

Over the coming months, there will be growing discussion addressing the business processes surrounding cross-channel commerce. Solutions will tend to originate from the domain of expertise of the supplier. Simply put, retail ERP (enterprise resource planning) software suppliers will approach the solutions primarily from a brick-and-mortar perspective; POS suppliers will approach the solution primarily from a POS perspective, etc.

Only those suppliers who successfully balance and recognize the parity of and the need for best practices that cross Web, stores, kiosks, and call centers will be the thought leaders and solution providers for tomorrow.