Boomerang

I came across this interesting article in Store Front Back Talk magazine talking about the phenomenon occuring as retailers are moving towards a coordinated selling across multiple channels. The transition is not complete and the results are far from what the article refers to as "utopian" world of multichannel retail where a store manager can look up articles browsed by customers from in-store kiosks to determine what to order. Many retailers are using emerging channels to drive customers to in store purchasing. Example are cited of Wal Mart sending out alerts of instore items available over text messaging or an upcoming store in Madison allowing customers to read user reviews of product through a bar code scan. So where does the boomerang come from...well what is boomeranging is the movement of customer first from online to get information on products, promotions etc then to the store to try out products and again to check its user ratings back online. Now why exactly is this happening? could be multiple reasons - one of them being retailers still havent figured the right IT architecture to synch up the multiple channels at play. But is IT the only challenge here? there could be more - one of which is cited by the article as - "Such true merged channel data exchange would also require political changes, with senior management ordering that walls between channel business units be either brought down or at least made ultra-porous." In an environment like retail where distinct departments like merchandising, store ops, ecommerce, logistics, marketing have to work together change management effort and its successful implementation is critical for multi-channel success. Till that time customers will keep boomeranging!!!!
On a very separate and a very conventional note, the article states that "studies show that 25-30 percent of footwear customers leave the store as the sales associate goes to the back room to retrieve the specific size footwear for the customer." Something as simple as a handheld with software functionality to check back room stock and create a task to have the desired item retrieved from the shelf by alerting a runner could work as the store associate continues to engage the customer. Even in the emergining world of cutting edge retail technology good'ole scan gun and a personable associate can go a long way.

Multipronged approach

It goes without saying the tremendous growth seen in retail online sales. However this has resulted in parallel companies (stores, website, catalog) operating within a retail organization which seem to be sometimes disconnected in their approach. Some retailers have integrated these functions to an extent in terms of look and feel. The question however is whether is that sufficient to stay competitive? I came across an article which talks about some of the best practices implemented by retailers ahead of the curve in the multi-channel world. Below are listed some of the key observations

1. Cost Effectiveness: Carrying the right assortment in your stores and offering wider ones in your online store can help cut down costs and at the same time provide opportunities for customers to buy the items. Penny's is cited as a good example of that "What are the secrets to Penney's success? For one, its Website offers almost three times the number of products available in the merchant's stores. This gives the company a cost-effective way to sell bigger-ticket, often slower-turning items."
2. Flexibility: Being able to fulfill customer demand from across channels gives the customers flexibility and the retailer the brand value of being customer centric. The article talks about some retailers using drop shipping as a means to drive that - "That kind of channel inventory flexibility requires a willingness to ship (or allow customer pick up) from different channels to make the sale and satisfy the customer. Some direct businesses are gaining significant sales with drop-shipped product. One major retailer with direct sales exceeding $200 million has 20% of its sales drop-shipped from its merchandise suppliers." From a retail systems perspective, having a common master data, inventory planning and replenishment system can help achieve this flexibility . The article mentions about the effect of inflexibility - "An inability to move or ship product from other channels to make the sale means inventory is frozen in one channel when it's needed in another. You need to aggregate or roll up inventory needed in a specified time frame ito place purchase orders and plan receipts. "
3. Uniformity: Often you go into a store and you dont find the same deals as you see online. Many retailers provide a loyalty program only in their stores. This approach doesnt provide the customer a uniform experience which is key to building loyalty - "Returns and customer loyalty programs should also operate across channels" and how to achieve this - "The key to cross-channel consistency is having single operational data stores and data warehouses across all channels for access to cross-channel product assortment"