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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