Retailers not providing seamless service and multi-channel experience to shoppers are falling behind, says Kiran Kumar Malathkar, Senior Project Manager, e-commerce, MindTree.
In today’s world of ubiquitous connectivity, retailers need to ensure convergence and consistency across multichannels. Harmonising consumer interactions across all the channels of a business leads to increased profits and customer satisfaction levels. The emerging new trend of consumers using mobile devices, online portals, social media and other technologies for shopping is driving the integration of multi-channel businesses. Retailers not providing seamless service and multi-channel experience to shoppers are falling behind.
Research firms such as Gartner, Forrester and National Corporate Research (NCR) have indicated that consumers expect all interactions to be fully harmonised across all the channels. This leads to customer satisfaction and boosts sales. It is clear that multi-channel consistency should be a key focus area for retailers.
In the present age of superconnected consumers, the trend curve is estimated to move up straight rather than sideways. According to Gartner, around 60 per cent of American consumers are today shopping online every month – a huge jump from 2007 when only one-third of them were doing so. The research firm also reveals that out of the estimated 177 mn adults who are online in the US, around 105 mn have two or more types of devices connected to the Internet. One third of these have at least four devices connected – these are the “super connected” consumers. Keeping in mind the connected consumer, the modern retailer should focus on the following:
- Continuous connectivity of available channels for consumers while avoiding inconsistencies across cross-channels
- Providing an environment to boost customer shopping experience by convergence of multi-channels
- Yielding benefits from crosschannel consistency
- Factors to be considered while investing in multi-channel integration
CROSS-CHANNEL INCONSISTENCIES
Inconsistencies across cross-channels (Internet, mobile, self-service tools, stores) leads to inefficient shopping experience for consumers. This results in missed opportunities to drive sales and influence customer behaviour. The disconnection and differences between different channels lead to increased call center calls, angry customers, poor customer satisfaction scores and a change in the consumer’s perception of the retailer. All this further leads to brand damage while decreasing the incentives for customers to stay and buy more. Information scattered across channels, departments and systems does not provide an opportunity to retailers to analyse the data holistically and misses out on various customer touch points.
When consumers cannot switch between various channels convenient to them and are not provided with ubiquitous connectivity (the ability to connect from any channel, anytime, anywhere), they have lesser choice. This leads to a low-quality shopping experience and purchases with decreased ease, which in turn has an impact on the customer base. A fragile integration of internal systems such as order management, inventory management and fulfillment infrastructure for multi-channel integration triggers reduced consumer satisfaction and slows down sales and growth.
According to a Gartner study, 76 per cent of multi-channel retailers do not fully coordinate brand marketing, while 74 per cent do not fully coordinate promotions planning across channels. Managing channels autonomously impairs customer relationship and increases costs. If different channels are not harmonised, retailers cannot provide customercentric merchandising and a seamless shopping experience across various touch points. Operating several channels to work independently and serve the same customer base leads to less than satisfactory customer interactions.
MULTI-CHANNEL CONVERGENCE
Cross-channel or multi-channel convergence involves the migration of autonomous retail channels to operate in coordination and collaboration with each other across various touch points so as to present a single face to the customers. Many retailers operate different channels as separate, autonomous entities. A lack of coordination and synchronisation between these channels results in high operating costs.
The challenge lies in collaboration and standardisation of catalogues, pricing, policies and structured data between these. A common structured and consistent data has to be shared across channels due to overlap of catalog, policies, data, and customer experience. With synchronisation, different channels can work together in tandem. The focus should be on increasing brand value by providing similar shopping experience across all the channels.
Many modern retailers are facing challenges in standardising and collaborating with different entities and moving into multi-channel convergence space from collaboration space. The integration of channels has to be decided by retailers by taking into account the company’s history, organisation structure, legacy systems, adaptability with new systems, branding, compatibility in each channel, staff and future strategy. To enhance consumer experience, retailers have to offer a consistent set of products, product information, product descriptions, promotions, prices and delivery charges regardless of the channel employed.
Consumers will be able to switch across different channels if retailers ensure identical return policies, regardless of the channel through which the purchase has been made, and implement centralised multichannel content management solutions. Communication of these return processes in a consistent way to customers is essential to maintain their loyalty and satisfaction.
Multi-channel integration should aim to create a greater sharing and reduced redundancy of data, processes and business rules so as to allow customers to purchase goods and services through a variety of channels (online, kiosk, mobile, catalog, in-store, and so on). When databases are fully integrated and there is consistency across channels, promotions can be personally targeted and delivered in the manner that customers prefer. Limited time offers and location-based services (such as Bluetooth) can be delivered to the mobile phones of customers while they are shopping in the store.
Consumers are increasingly comfortable with shopping online and using self-service devices such as kiosks at airports and hotels. Retailers can leverage this by, for instance, integrating mobile payment options and text messaging promotions with more familiar channels to create a seamless experience, both online and offline. Personalisation is another key element that can improve the shopping experience and help in building a large customer base and loyalty.
BENEFITS OF CONSISTENCY
Retailers can adapt faster to the market demand by integrating their assets and systems in a way that offers consistent catalogues, managed repositories, identical return policies, personalisation, organisation of assets, unified pricing, use of open technologies, crosschannel promotions and flexibility. The benefits to the retailer include a better understanding of customer needs across different channels in a structured way and familiarity of the brand value across various customer segments. Loss of sale is quite a common problem in retail, but with cross-channel synchronisation, it can be avoided.
It is a Herculean task to obtain an integrated view of customers across multiple channels without their collaboration. With convergence and a holistic approach, however, the information architecture and user experience can be structured in a way that will lead to a better understanding of customer touch points and more efficient interpretation of data.
Synchronisation would allow consistent dialogues and interactions across all the channels. Consistency is not just a matter of conversion rates – the more consistent the interactions, the higher the conversion rates.
Providing many options to customers – ordering online or by mobile, pick-up from store, etc. – improves the conversion rate. At the same time, wider interaction with customers leads to a wealth of information that helps improve the retailer’s understanding of their needs and behaviour. With better responsiveness, sensitivity to changing environments and technology; revenue and growth opportunities tend to increase.
Cross-channel consistency also leads to organisational efficiency and effective opportunities through sharing of processes, technology and information. Retailers can focus more on customers in response to unique competitive situations in each channeland adjust their retail mix to serve different segments.
INVESTING IN MULTI-CHANNEL
Consumer spending is going to increase in the coming few years and retailers are going to invest more in technology. The retailers should consider many factors while decided to invest in multi-channel.
Due to the economic downturn, most multi-store retail chains saw a decline in sales in the years 2008 and 2009. Things began to improve in 2010. The upward trend has continued into 2011. Many US and European retail chains are today expanding globally, with an increase in technology investments. Green products, green services, green facilities and green activism are being heavily publicised. These are now accepted across globe and strongly supported by consumers. Future projections of consumer spending through distinct web channels show a robust growth.
Considering all this, retailers would be better advised to focus on primary drivers of this growth such as ubiquitous connectivity (ability to connect from any channel, anytime, anywhere). They should also start using multi-channel analytics – text, voice, image, video – social media sentiment analysis to gain a view of how customers are shopping various product categories across channels. This will help them prioritise their technology investments and also support cross-channel consistency.
The focus of modern retailers should not be on providing all things in all channels, but on providing the expected level of service. They should prioritise investments and channels based on structured analytics. The potential sharing and reuse of people, processes and technology that can be achieved through an integrated channel strategy can help improve a retailer’s channel cost structure. Mapping of usage and preferences of high-value customers can help identify channel areas of over-investment and channels which are not providing their optimum ROI. Thereafter, one can narrow down channels which require some form of disinvestment and asset reallocation.
Through cross-channel consistency, retailers can respond faster to market changes and pricing can be undercut within minutes. There are many more advantages – products can be made available within a day across the various channels. As an example, a fashion retailer can copy a design from the Catwalk and get it on the high street within 72 hours. Apart from branding, multichannel management is one of the few customer-facing differentiators that can deliver true and sustainable competitive advantage.
In multi-channel interaction processes, scenario-driven communications and consistency of marketing automation should be part of the global and integrated strategy planning. Various studies and practical experience still shows that there is a room for improvement here. Synchronisation of distributed channels will gain market share for a retailer. Research has shown that multi-channel shoppers in the financial services and retail sectors represent an increasingly large proportion of the buying population.
The retailers should look for long-term value and competitive advantage rather than short-term profits. Ultimately, they have to strike a balance between continued budgetary pressures and the increasing need to grow. They should try to meet revenue targets by providing customers access to their products, pricing, promotions, stock availability and store location through multi-channel shopping with ubiquitous connectivity.
This article was originally published in August 2011 issue of Images Retail.
