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Offer Industry-Specific CRM or Lose the Business Offer Industry-Specific CRM or Lose the Business
By Kimberly Hill
October 21, 2003 1:14PM

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Customers interact with retailers in a variety of ways, not just online or through a catalog order. And they expect companies to know what they want and give it to them.
 
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In a report on the implications of multi-channel operations for the retailers, Aberdeen Group's Kent Allen said that highly specialized, vertical offerings will be key to meeting the new business challenges. Software makers will not be able to offer "re-packaged" ERP or CRM suites in response to the needs of the multi-channel retail company.

In fact, the retail industry increasingly is demanding systems that do not operate in specific software niches, such as CRM, instead preferring solutions that span business processes to manage the entire "demand chain."

Retail, more than most industries, sees the problem associated with running disparate supply chain, CRM, and ERP systems, said Allen. Thus, software makers that wish to make inroads or preserve their market share among retail companies must change the way they develop and sell their software.

A couple of holiday seasons ago, retailers spoke of "online customers" and "in-store customers." They closely tracked how many of their sales took place through their e-commerce sites and wondered if the Web ever would become a viable alternative to brick-and-mortar stores.

Those days are over, according to Allen. Retailers must offer multiple channels to remain viable, and the concept has taken a back seat to the multi-channel customer. These customers, said Allen, interact with retailers in a variety of ways, not just online or through a catalog order. And, they expect companies to know what they want and give it to them through whichever channel they prefer -- a tall order indeed for enterprises with disparate pots of customer data sitting in a variety of business units.

E-Mail in a Vacuum

For example, one practice that many retailers with an online presence employ is gathering e-mail addresses so that they can send special promotions to visitors, who then can act on them by making a catalog order, coming to a store, or ordering online.

Sheryl Kingstone of Yankee Group agreed, telling CRMDaily that e-mail promotions tend to work well with established customers, but not so well with infrequent customers or visitors. The promotions offered through various channels must be detailed enough, she said, to ensure that a customer will not perceive the communication as junk mail or spam.

"That was the holy grail of one-to-one marketing," Kingstone said. Retailers who approach the multi-channel customer wisely will start to leverage both online and offline sources of information to coordinate interactions.

Software By Any Other Name

Aberdeen analyzed how vendors at a recent retail systems conference offered their products. The majority labeled their products under the categories "systems integration" and "e-commerce." Among the customer-focused offerings, most vendors offered consulting services, while a smaller but growing number came to the show with multi-channel customer data integration products.

Allen said that the categories demonstrate more than creative product labeling. They also show that retailers are becoming more concerned with understanding how their customers use various channels and they are taking advantage of the synergy among them.

And understand they must, because once again, the holiday retail season is rolling around.

Richard Feinberg of the Purdue Center for Customer Driven Quality told CRMDaily that sales growth in the online channel depends on coordinated offerings to the new type of shopper. With each holiday buying season, more and more retail customers do research online and buy in the store, or vice versa. It is clear that retailers will have to scramble to capture the hearts and minds of these new multi-channel buyers.
 

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