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Guest Comment: What’s in store for multi-channel retail?

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As the economy continues to decline, consumers are thinking more carefully before spending their hard-earned cash. No longer happy to purchase on a whim, businesses need to do so much more in terms of customer relations to get people to part with their money. Nowhere is this being felt more than in the retail sector, with its regular reports of declining sales and numerous redundancies. However, despite all the bad news, it would seem a few retailers are managing to buck the trend and prove that the high street is not entirely devoid of growth.

Although recent times have seen a move towards one day sales and limited voucher offers, businesses need to think more long term. To remain affluent in this difficult economy, retailers need to better understand their customers’ needs, providing them with a level of service that meets and exceeds their expectations.

An example can be seen in Morrisons’ better than expected leap in third-quarter sales. Having always previously trailed in performance behind that of Tesco, Morrisons now appears to be outperforming the supermarket giant. Rather than simply cutting prices (and eroding margins) across the board, Morrisons’ management is using customer intelligence to create offers, such as its cut-price Sunday lunch campaign, that also compel customers to buy more profitable lines at the same time. The extra 900,000 customers it has seen coming through its doors in recent weeks is clear proof that good customer insight can ensure that a company can remain buoyant even in these difficult times.

While listening to customers and giving them what they need is one of the most basic concepts in business, the reality is that making that work in today’s retail environment is demanding. A widening store footprint and the myriad complexities of multi-channel retailing make it very hard for retailers to emulate the successes of say, phone companies, whose every representative can call up detailed information about each customer and their interactions with the company at the push of a button.

Although most retailers, today, have realised the benefits of putting customer intelligence to a more sophisticated use, they are not going far enough. More often than not, data is collected from each channel separately and not collated across channels to provide a 360 degree view of the customer’s behaviour and interactions.

Adopting a centralised view of customers across all channels will place retailers on the front foot when planning business strategies, product developments and customer service techniques.

Creating a consistent experience

The traditional relationship between the retailer brand and the customer has been disrupted with the introduction of further channels through which to shop and interact with a company. What was once just a matter of managing the brand identity of one outlet is now a more complex affair with some businesses having to transfer this identity across online, telephone services and mail order. All this is in response to an increasing need amongst consumers for convenience. Consumers want to be able to access service delivery 24/7 and to be able to carry out their shopping/finances on the go.

As a result, retailers need to ensure that their brand value is maintained across all touch points. The same shopping experience and high-quality service must be given in every situation or they risk losing their customers. Aside from the potential lost revenue, this causes a real headache for the retailer. The solution lies in extending the face-to-face benefits of the in-store experience to a multi-channel environment.

Of course it goes without saying that staff, both in-store and working in other channels, should be appraised of the product portfolio and pricing models in real-time: Nobody’s interests are served if the same goods are priced differently online or in-store by the same company. Allowing in-store pickup of items ordered via telephone or online is the next logical step to maintaining that brand recognition across all outlets. This also provides a more practical service for those consumers who may not always be at home to receive deliveries from ‘traditional’ websites.

All of these are steps which allow multichannel retailers to maintain their level of personalization and champion their own brand values in the process. This cannot happen, however, in the absence of a central view of all customer contacts.

Customer intelligence: A strategic asset

With websites and contact centres playing an increasing role in providing service to customers, retailers have discovered that these non-traditional channels can provide an invaluable source of customer intelligence. Used effectively, this intelligence can govern every area of operations, from merchandising to supply chain and website design. The challenge, however, lies in bringing together and crunching the data in the first place.

Generally, different parts of the business have their own databases. Commonly, each database works from a different platform and records are stored in different formats and managed under differing policies. Creating a view of the customers from across all these stand-alone systems can be a laborious task. Businesses need to ensure that all this disparate data is integrated into one system in order to provide a real-time 360 view. This is where an outsourced customer service specialist can provide real value. They will be able to support almost any technology platform, thereby making it far easier to aggregate disconnected data sources. More to the point, they should be able to mine this information so it yields real insights, which can benefit the business.

Knowledge is power

Customers also like to view their transactions with a given brand as part of a continuous relationship, regardless of the channel they use — and this certainly stacks up in terms of sales figures: a multi-channel customer is generally worth three times a single-channel one. However, the sales assistants in the stores have little or no intelligence available to appreciate the value of the shopper they are serving. Yet as we’ve seen, this context is vital. Without it, an assistant may hesitate to extend the lower price for an item that is no longer on sale — risking the relationship with a potential ‘golden’ customer. Armed with the right information, however, sales staff could begin to offer the same level of personalisation as the local boutique — albeit spanning dozens of stores and thousands of customers.

So, in the mind of the customer, discrete sales channels are beginning to blur. The call to action for the retailer now is to ensure that all the experiences for the consumers mirror each other. Whether that be in-store, on the web or over the phone, the identity should remain the same.

To do this, retailers should invest in the technological innovations which sparked the e-commerce boom in the first place. This will be the best chance for multi-channel operators to fight back. Using real-time data analytics to build up a 360 view of a customer’s transaction history will enable service representatives to deliver the personal touch that most consumers expect in-store, and combine this with the compelling pricing they could find online.

• Frank Sherlock is SVP & MD International within the Global Business Unit at Convergys, a leading outsourcer focused on relationship management.

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