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Fulfilling Expectations: Best Practices for Omni-Channel Retailing

BY CSA STAFF

By Lee Cote, [email protected]

Although the trend toward increased online purchasing in recent years has been universally acknowledged, the steady migration of shoppers online has occurred in even greater numbers than most probably realize. Computer-based e-commerce spending has grown by double digits year over year nearly every quarter since 2007, with the exception of the worst quarters of the recession. In the first quarter of 2013 alone, e-commerce sales increased 13%. Mobile commerce sales during the same period grew at an even faster pace, increasing 31%. Together, e-commerce and m-commerce sales increased 20% during the period.

In this environment, in-store traffic has diminished slightly but stores remain a destination even as more customers are buying online. Retailers are working hard to maintain sales by expanding their digital strategies. While no one has been completely immune to the pressure exerted on the marketplace by established industry players like Amazon and Zappos, some brick-and-mortar retailers have been better than others at finding complementary online offerings that deliver more customer access and drive more opportunity across all channels.

Wal-Mart, Victoria’s Secret and Barnes & Noble, for example, have successfully fused the old (brick-and-mortar) with the new (online), effectively integrating store and online inventories and converging store, e-commerce and m-commerce channels at all points, including customer service. As a result of these factors, these businesses have expanded their national and worldwide business. Such companies have embraced the consumer shift online and their omni-channel philosophy has and will continue to differentiate the leaders of the pack. The retail landscape will continue to change as technology evolves and in order to remain competitive and experience growth, retailers need to develop strategies that are guided by the following three principles, regardless of the channel:

  • Authenticity: The same fundamental set of core values around service and what the company stands for in a brick-and-mortar context should be integrated throughout the online presence.
  • Consistency: The customer experience across all channels should be aligned with the overall brand, positioning the retailer to have the same ‘look and feel’ between e-commerce and m-commerce platforms and brick and mortar assets.
  • Transparency: Communications with customers at all levels must clearly convey expectations with regard to pricing, product information and shipping.

The following best practices incorporating the above principles can successfully guide online strategies that will support, complement and grow entrenched brick and mortar businesses:

Customer Interface – Successful brick-and-mortar enterprises continually keep things fresh and exciting, have easy-to-navigate departments and feature clear pricing and easily accessible product information. Consumers want the same experience when shopping online. By constructing web pages that are dynamic and easy to navigate, retailers can maximize the customer’s interaction with the site and build loyalty.

Marketing and advertising campaigns should incorporate a multi-layered set of communications, backed by a heavy social media presence. Leveraging free platforms such as Twitter, Facebook and Pinterest allows for an open dialogue with customers and builds brand loyalty. Including directed calls to action in these communications drives clicks, page visits and, ultimately, sales.

Fulfillment and Logistics
– Even the most well designed websites are only as good as the product fulfillment center backing them up. Retailers must develop product fulfillment operations that can consistently meet the industry standard – which in most cases is two to three business days. As critical, returns must be seamless and easy. Excellent customer service extends beyond the point of sale, throughout the entire lifespan of the product. Retailers that have restrictive return policies or levy ‘restocking fees’ in an effort to deter habitual returns often damage the goodwill they worked hard to build with potential long-term customers.

Scalable Platforms and Data – The use of marketing affiliates, including bloggers, magazines and other third-party promotional vehicles develop a community, where there is an exchange of ideas by like-minded consumers who promote interaction and loyalty based on products. This is an effective way to reach customers and increase sales without having to budget for large and expensive advertising campaigns. Another way to get the most value for every dollar spent is to invest in a robust web analytics program. Gaining a clear line of sight into web traffic allows companies to strategically target audiences and align resources accordingly.

With consumers today having a greater number of options than ever before and with the brick-and-mortar business model becoming challenged by a growing trend towards online purchasing, retailers need to continue to evolve and develop new platforms that meet the changing demands of their customers. The leaders today have already mastered their e-commerce strategies and are now seizing the opportunity presented by the emerging m-commerce market, which is growing at an exponential pace. For many consumers, mobile devices are the first access point to the Internet each day. This behavioral trend translates into more and more sales opportunities and retailers should continue to leverage the ever-growing universe of applications to attract potential customers. Retailers simply cannot afford to ignore this next chapter of growth within the industry.

Many of the same principles that led to past successes will continue to feed future growth. The pioneers have adopted an omni-channel philosophy by vertically integrating their brick-and-mortar efforts with their e-commerce and m-commerce operations. When done successfully, this omni-channel philosophy is fused together by the guiding principles of authenticity, consistency and transparency, all while maintaining the same – or enhancing the – level of customer service. With companies becoming increasingly global in their reach, businesses that do the same by integrating all channels will have a better opportunity to maximize this fast-changing retail landscape.

Lee Cote is a principal & managing director, retail division of Gordon Brothers Group, a global advisory, restructuring and investment firm specializing in the retail, consumer products, industrial and real estate sectors. Cote is responsible for directing all store-level sales and promotional activities, including day-to-day operations, marketing, merchandising and advertising. She also serves as senior merchant for a variety of retail sectors, focusing on the department store sector. He can be reached at [email protected].


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