Multi (Omni) Channel Retailing 1 DEFINITIONS Historically the physical store was the only ‘touch point’ between the retailer and the customer. The retailer provided the range and assortment for customer selection and was available only on certain days and times. Business models that can provide products and services. • Physical Stores • On line shopping • On line auctions • Free standing kiosks • Catalogues • Direct mail • Television and Radio buying (including auctions) • Social Media – Facebook/twitter • Call Centres • Mobile devices – phones, IPads Can be anything from separate URLs to create more channels and greater base of customers to real time inventory across all channels. OMNI Channel provides: • Consistent brand image • Integration between channels for ease of use • Integration between channels to meet business strategies • Allows for ordered development of new channels 2 WHAT IT MEANS FOR THE CUSTOMER Product and assortment can be ‘endless aisles’ Global sourcing for customer Best price sourcing in real time 24/7 Much discretionary shopping now done after 8pm, on line, sitting in the couch. Delay in fulfilment 3 WHAT IT MEANS FOR THE RETAILER Leverage power of the customer and their technologies e.g. mobile phone used to store loyalty cards Leverage the digital facilities available to the retail supply chain Leverage the customer experience in the physical store and all touch points. See 3.1 3.1 THE PROCESS OF THE CUSTOMER EXPERIENCE • Discovery • Research • Purchase • Fulfilment • Product maintenance/returns The retailer should be seen at all those points of the customer experience and be working to build brand loyalty, customer satisfaction and trust. The opportunity exists to personalize the customer experience at these points. 3.2 UNDERSTANDING THE CUSTOMER EXPERIENCE Rose et al, 2010, Journal of Retailing • Sensory • Emotional • Cognitive • Pragmatic • Lifestyle • Relational All lead to a ‘take away’ impression that goes into customer long term memory. 3.2.1 Cognitive Elements • Speed, Challenge and skill – no longer issues. • Ease of Use • Customization • Aesthetics not so important • Perceived benefits • Perceived control Ease of Use is #1 at the moment. Ease of use equals no information overload and no complex navigations through screens. Customers are also looking for C2C opportunities online that provide a reference point, shopping and friendship groups. The research highly recommends that this should be encouraged by the retailer to build relationships and trust on line. Note: This research is overall, it is not broken down by segments. That is for future research. 4 WHO IS DOING MULTICHANNEL RETAILING? Only a very small percentage of retail businesses do not have an on line presence. 5 CHALLENGES OF MULTICHANNEL RETAILING • May need process reengineering i.e. GAP reorganized across channels • Changes to number and configuration of Distribution Centres • Warehouses, stores as warehouses • Ship to Store i.e. Home Depot now approx. 20% buy on line, ship to store for collection; Aurora Fashion – Oasis, Warehouse, Coast. Buy online, pick up in store • Ship to Customer – single item versus pallets to store • Out of Stocks • On line cart abandonment – is a major under researched issue • Cannibalization • Information technology resources and levels of systems integration. • Customer Experience - Crumpler • Channel synergy – seamless experience for customers, ease of movement across channels • Do customers want to recognized at all touch points • Functional integration of systems so the channels share common organizational resources • Brand management – consistency across channels • Information management – what is the customer thinking? Customer dashboards • Logistics management – fulfillment from multiple sources can be major drain on profits and squeeze margins(Tate et al, 2005) 6 CHARACTERISTICS OF BEST PRACTICE Product offers and services for all channels (Bugaboo) Investigating new channels and reviewing existing channels all the time (Walmart) Know what channels drive profit, reduce costs (Zappos) What channels are cannibalizing? One brand identity across channels (JB Hi Fi, Lu Lu Lemon, Bugaboo) Using analytics to improve sales and service performances Unified marketing plans (Amazon) Adequate inventory visibility across all channels from supplier to sales and returns (RFID?) to maintain lean inventory and managing working capital (Walmart for some categories) Executive mandate and Board alignment Welcome company hosted blogs with product reviews and C2C communication (Lands’ End,) Use the digital environment to drive more in store sales (Apple, JB Hi Fi) Click and Collect (David Jones, JB Hi Fi) Find your own path to success in multi-channel