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Multi-channel retailing

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Multi-channel retailing

  1. 1. GUIDE Multi-channel Retailing: An Introduction New technologies, such as mobile, touchscreens and tablets, are offering retailers more ways to connect with customers. Learn what technologies are available and how to maximize their effectiveness. Developed and published by Sponsored by
  2. 2. Contents Multi-channel Retailing: An Introduction Page 3 About the sponsors Page 4 Introduction: What is multi-channel retailing? Page 5 Chapter 1 | Benefits of multi-channel retailing customer perception Improved sales Increased collection Better data productivity Enhanced Best practices Page 9 Chapter 2 | Tablets Benefits Best practices Page 12 Chapter 3 | Mobile Benefits Best practices Page 14 Chapter 4 | Touchscreens Benefits Best practices Page 16 Conclusion | The future: Omni-channel retailing© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 2
  3. 3. About the sponsors Frank Mayer and Associates Inc. designs, engineers, prototypes and produces retail merchandising displays, interactive programs, kiosks, store fixtures and promotional marketing programs that engage the customer at the point of sale, provide a competitive advantage in the retail environment, maximize client objectives and increase sales. Its in- house resources of design, engineering, production, prototyping, assembly, distribution and customer service provides an environment of tightly in- tegrated resources for complete project management from creative design through store delivery. These resources allow the company to be flexible to program changes, compress timeframes and deliver a final product that is on-time and on-budget, with quality results. In an ever changing marketplace, Frank Mayer is the constant that provides clients with a creative, responsive and thorough approach to every in-store merchandising or interactive kiosk program. The com- pany’s mission is to create an environment which focuses on turning targeted in-store merchandising initiatives into guaranteed results., operated by Louisville, Ky.- based NetWorld Alliance, is the leading online publisher of news and information on how retailers can differentiate their offerings, create customer excitement and loyalty, and increase revenue by improving the customer experience. The content, which is updated every business day and read by professionals around the world, is provided free of charge to readers. Published by NetWorld Alliance © 2012 NetWorld Alliance LLC Written by Emily Wheeler, contributing editor, Tom Harper, president and publisher Joseph Grove, vice president and executive editor Emily Wheeler, managing editor of special publications Courtney Bailey, assistant managing editor of special publications© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 3
  4. 4. Introduction:What is multi-channel retailing? D espite a still-weak economy, retail sales are showing a rebound. Ac- The channels cording to the U.S. Department of Commerce, total retail sales for the third Multi-channel retailing involves using quarter of 2011 were $1,052,734. Sales a variety of engagement points to improved even more during the holiday create a seamless shopping experience season. The National Retail Federation said for customers. Those engagement retail sales for the 2011 holiday season rose points include: 4.2 percent from 2010, reaching $471.5 bil- Brick-and-mortar stores lion. Clearly, people are still shopping. Websites But how people shop is changing. In the Tablets third quarter of 2011, 4.6 percent of retail Kiosks sales were ecommerce sales, according to Smartphones the U.S. Department of Commerce — an Digital signage increase of approximately 13 percent from the previous year. Call centers Social media Not only are people shopping more from their home computers, they also are using new technology within a store. Approxi- mately 35 percent of American adults own Retail, the retail arm of global communica- a smartphone, according to a recent survey tions company Verizon. “But the dirty little by the Pew Research Center, and 11 percent secret is that usually, those channels are own tablet computers. And sales are con- all operating as different silos, not as one tinuing to grow; Apple, maker of the popu- unified brand. It’s up to the retailer to blur lar iPhone and iPad, posted record profits those lines and create a unified experience.” for 2011, due in large part to the sale of those devices. Shoppers not only are using This guide, sponsored by Frank Mayer their smartphones and tablets to purchase, and Associates, will discuss the benefits of but also to do research within a store. multi-channel retailing and how to imple- ment it across various engagement points. The challenge for retailers, then, is to incor- We would like to thank Frank Mayer and porate new technology with their existing Associates for allowing us to provide this sales channels, to create a seamless omni- guide at no cost to the reader. channel experience for shoppers. “To the consumer who uses multiple en- gagement points, such as the Web, a call center and digital signage within a store, it’s all one brand,” said Ravi Bagal, vice presi- dent for Washington, D.C.-based Verizon© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 4
  5. 5. Chapter 1 Benefits of multi-channel retailing C reating a successful multi-channel tomers, especially as the digital generation experience can seem intimidating to gains even more buying power. many retailers, who may wonder if the effort is worth it. They may not have a Stores who do create a seamless experi- choice, however. ence that integrates all different forms of technology, however, can gain significant “Consumers are expecting this kind of in- customer loyalty. Those brands are per- tegration already,” said Ron Bowers, senior ceived as forward-thinking and responsive vice president of Frank Mayer and Associ- to customer’s needs — qualities that will ates, a Grafton, Wis.-based merchandising keep customers coming back. company. “They expect that if they order an item online, they can return it in the That improved perception offers another store, that kind of thing. It’s up to retailers advantage, as well. In a world of big-box to make sure that expectation is met.” stores and online shopping, finding the best price is easier than ever for customers. But multi-channel retailing also offers A store that is perceived as responsive to plenty of benefits to retailers, benefits that customer needs and gives customers easy make investing in the strategy worthwhile. access to a variety of channels can differen- tiate itself in a crowded field. That allows the brand to compete on the experience Improved customer perception offered, rather than just price. Customers “Channels are disintegrating for custom- might be willing to pay a little more for the ers,” said Jeremy Gustafson, vice president convenience, and will come back repeat- at KSC Kreate, a digital commerce agency edly, and brands don’t have to slice their based in Hollywood, Fla. “People are watch- profits just to keep up. ing television and using their tablet at the same time. They expect the same kind of integration with their shopping experience.” Increased sales The primary driver for a retailer adopting Brands who don’t provide that kind of any strategy is, of course, increasing profit, experience, he said, are likely to lose cus- most frequently by increasing sales. Multi-Shopping no longer takes place exclusively in brick-and-mortar locations. Customers are blurring the lines between touchpoints, and theyexpect retailers to keep up.© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 5
  6. 6. CHAPTER 1 Benefits of multi-channel retailing channel retailing, by offering a variety of Multi-channel retailing, by offering a engagement points for the customer to variety of engagement points for the make a purchase, increases the convenience customer to make a purchase, increases and ease of sales, thus boosting profit. the convenience and ease of sales. A customer who thinks about buying a pair of pants, for example, may not want to drive to the mall, park, walk to the store, find the pants and try them on. For that likely to enter their email address into a customer, she can go online at home and kiosk than give it to a cashier. At the same order the pants from the store’s website. time, by having that information available Another customer, however, might be in across a variety of channels, the retailer has the store trying on the pants and decide more opportunities to capture the infor- she’d like them in a different color. In mation, and more of it.” that case, she can use an in-store kiosk to find the pants in the preferred color, If a retailer can track what a customer is order them and have them delivered to her purchasing, and where, more targeted home. Still another customer can use her marketing can be introduced. Someone smartphone to take a picture of the pants, who tends to browse online and then pur- send it to a friend and discuss whether to chase in-store, for example, can be emailed purchase them or not. Having a variety of an invitation to a private showing in a engagement points gives retailers more store, and the list of products to be shown tools to make a sale. can be sent before the event, increasing the likelihood of purchase. Better data collection Not only is it more likely that the customer Knowing the customer is a key tenant for will provide important information, but if successful retailing, and multi-channel en- all the different channels are communicat- gagement points provide more opportuni- ing, then the information only needs to be ties to gather information about customers. entered once. There are two benefits to the data collec- “If you’re going to ask someone for infor- tion offered by multi-channel retail: First, mation about themselves, it needs to be the possibility for gathering more infor- available whenever they come to you,” said mation exists, and the information can be Verizon’s Bagel. “Otherwise, it feels intru- used more effectively. sive and annoying to have to repeat the same information over and over again.” “People usually are more comfortable entering information themselves, rather than giving it to a salesperson,” said Steve Enhanced productivity Deckert, marketing manager for Sweet Multi-channel retailing offers benefits for Tooth, a Toronto-based provider of loyalty more than shoppers. Workers, too, can programs to retailers. “So they are far more benefit from the use of new technology,© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 6
  7. 7. CHAPTER 1 Benefits of multi-channel retailing because it arms them with more informa- tion and increases their efficiency. A tablet, for example, frees employees from the point-of-sale system, instead allowing them to carry the register with them. Employees can go directly to the aid of customers, helping them to find out what is in stock, what is available at other stores and when new products might be launching. The tablet also can contain information about the loyalty program, When all the different retail channels are communicating with each other, information only needs to be entered so a frequent customer can be given VIP once (i.e., a shopper can sign up for a loyalty card online status. Then, when a purchase is ready to and use it in the store). be made, the customer does not have to stand in line, but rather can simply con- ample, is not bringing anything unique to tinue talking to the salesperson and make the customer; instead, she can check the her purchase via tablet. website at home, on her own. The same is true of a tablet. If the salesperson with the tablet does not have access to more or Best practices better information than the customer can While every type of channel has its own access via her own tablet or smartphone, unique set of challenges, there are some the application will not bring much value strategies that are true across all engage- to the transaction. ment points. Security. There is a fine line between be- Be consistent. Messaging across all chan- ing helpful and being intrusive, and it’s a nels should have the same look and feel; line that easily is crossed. Customers are the customer should always know exactly aware of security issues, and are wary of what brand she is interacting with. providing too much personal information. “Traditionally, retailers have approached “There has to be a clear connection be- each channel individually,” said Gustafson. tween the information collected, how it’s “What is needed, though, is to create a used and what value the customer receives single marketing message, and then figure from it,” said Bagel. “Understand your out how to deploy it across all channels. brand strategy and what level of intimacy The messaging doesn’t have to be identical, is appropriate. Depending on your clien- but it all needs to be clearly related.” tele, privacy might not be as important — digital natives tend to be far less concerned Provide a value-add. Make sure each with privacy than Baby Boomers, for engagement point offers something to the example. But everyone wants to know that customer. An in-store kiosk that simply they will receive a benefit from giving you accesses the company’s website, for ex- information.”© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 7
  8. 8. CHAPTER 1 Benefits of multi-channel retailing Be committed. Multi-channel retailing requires an investment in time and money. There needs to be a clear strategy across all teams, and cooperation is critical to success. “In order to have a totally seamless solu- tion, all stakeholders need to be involved, giving their insight and taking ownership and having support and understanding as to what is being done, why and how,” said Bowers. “This is not a sometime commit- ment; this is a total marketing strategy for the retailer to invest in the future of the customer acquisition, retention process and loyalty programs.”© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 8
  9. 9. Chapter 2 Tablets T here are more than 30 different tablets available on the market today. Some of the most popular include Apple’s iPad, Amazon’s Kindle Fire and Samsung’s Galaxy Tab, according to PCMag. Tablets are an increasingly popular option for both consumers and retailers, due to their relatively low price point and powerful computing capabilities. Benefits Tablets can be used by both customers and in-store personnel. For customers, the tablet serves as an extension of the website, and as a comparison shopper. Custom- ers can access the company website to see what’s available. At the same time, and the challenge that retailers need to overcome, a shopper can find a product she likes, and then see if another vendor offers it for less. For the salesperson, tablets can be a pow- erful customer service and line-busting tool. If a retailer develops a specific tablet application, it can provide more informa- tion than simple access to the website. A Tablets can be powerful tools for employees, creating tablet application can integrate with inven- a more dynamic sales experience and serving as a POS tory management, give the salesperson system. access to the customer’s loyalty program and connect the salesperson with similar stores across the country, as well as corpo- makes for a more dynamic, interactive and rate headquarters. convenient sales experience.” “The benefit of a tablet at retail is that it A tablet also can serve as a POS system. allows the customer (and salesperson) to This most famously is occurring at Apple bring it right to the product under con- stores, where there no longer is a tradi- sideration, initially providing information tional check-out counter. Instead, Apple that the consumer can ‘double-check’ on associates roam the floor with enhanced the item itself, and possibly complete the iPod Touches, and can process payments transaction without having to spend time directly on the devices. Customers no lon- at a sales desk or in a check-out line,” said ger have to wait in line, and the perception Dave Zoerb, senior vice president of mar- is that the check-out time is much faster. keting at Frank Mayer and Associates. “It© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 9
  10. 10. CHAPTER 2 Tablets Training also is a benefit of a tablet system. Best practices According to the U.S. Department of Com- Usefulness. As discussed in Chapter 1 merce, employment in the fourth quarter it’s important that the tablet application of 2011 rose by 200,000 jobs, much of that being used by the salesperson offer more seasonal retail work. Seasonal workers than simply the standard information on need to be brought up to speed quickly, the website. If a customer approaches the and even long-term workers need to know salesperson with a question, she wants to about special deals or promotions. Tablets feel she is getting information she could can offer access to that information, get- not have as easily found for herself. Make ting workers onto the floor more quickly. sure the tablet application is integrated with other systems. “Salespeople are excited to work with tab- lets,” said Tom Tamulewicz, vice president Security. If used as a POS system, make of research and development at Columbia, sure the system is as secure as a standard Md.-based MICROS-Retail, a provider POS application. of enterprise applications for retail estab- lishments. “People are comfortable using “The same best practices for security apply,” them, even if they haven’t before, and they said Tamulewicz. “Make sure everything is think they’re fun to use. That gets people encrypted, restrict access only to those ap- eager to work with them, and eager to get plications that need it and restrict the num- out on the floor and sell.” ber of systems that touch anything critical.” In addition to training seasonal workers, Wi-Fi enabled. It seems simple, but to en- tablets also give retailers flexibility in pay- courage tablet use in the store, make sure ment acceptance. Because tablets are less Wi-Fi is enabled, and free. Customers are expensive than a traditional POS system, becoming used to having Wi-Fi access, a few can be purchased for known busy and may become resentful if they can’t times and shipped to a store. The store can access their tablets on demand. This is have extra registers when needed, without especially true for the new class of tablets, having to worry about installing a complex such as the Kindle Fire, that do not have system, including finding space and paying any 3G capability. for wiring. And of course, when the busy season has evaporated, the tablets can be put away, unlike a permanent installation.© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 10
  11. 11. CHAPTER 2 Tablets Seva Beauty: A tablet success story One chain that has successfully integrated tablets is Seva Beauty, a salon located in Walmart stores that of- fers a full range of services, including manicures, pedi- cures and eyebrow threading. Seva Beauty operates in nine states, with plans to open more. Each Seva Beauty location has at least one iPad, used for check-in and check-out. A secondary iPad also is used as a POS system. “Because customers can check themselves in and out, it’s created a really dynamic in-store aspect,” said Vas Maniatis, co-founder of Seva Beauty. “The iPads also changed the aesthetics of the salon.” The iPads also encourage upselling. When customers One salon is taking advantage of tablets to check in, any daily specials can be promoted on the encourage upselling, promote loyalty programs welcome screen, as well as the loyalty program. Cus- and improve training. tomers are guaranteed to see that marketing, and since they are already using the iPad, they are more likely to agree to sign up for the loyalty program. Monitoring is easier with the iPad, as well. Since the entire POS system can be accessed re- motely via an iPad, a manager can check sales numbers, notice any deviations and determine solutions. The Facetime ability also allows a manager to see how an aesthetician is performing a service, without having to be onsite. Training is another benefit. With the iPad, workers can download training videos whenever there is downtime. The system can track who has watched the videos, and can administer tests after the video has been watched to ensure the information has been retained. The train- ing is dynamically tied into the POS system, so a worker only can perform a service once she has been certified. “The iPad just gives us more flexibility,” said Maniatis. “And we’re always finding new uses for it.”© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 11
  12. 12. Chapter 3 Mobile A ccording to an August 2010 survey Uses of smartphones in retail, 2010 by Dublin, Ohio-based research firm Sterling Commerce, 15 percent of 30 U.S. consumers have used their mobile de- 30% vices to make purchases. Ann Arbor, Mich.- 20 based ForeSee Results found that, in 2010, 30 percent of shoppers used their phones for 10 15% 15% research, such as comparing product details, looking up prices and using store loca- 0 tors. Fifteen percent of shoppers compared Comparing Make Research products and prices while in-store. Clearly, product purchases details mobile is an important part of the shopping experience, and growing. and Twitter. People can “like” a brand on Benefits Facebook instantly via a smartphone, and Mobile apps differ from simply accessing a Twitter conversation can share a cus- the website. Mobile apps offer retailers the tomer’s view of a store (whether positive or opportunity to do targeted marketing, such negative) in real time. as delivering coupons based on location, and can encourage on-site purchasing. QR codes are another use for mobile. A code can be attached to an item, and the “People use mobile phones for conve- user takes an image of the code with her nience,” said Jonathan Cook, head of new phone, which brings her to a website. That media at Valtech UK, a digital consultancy website might have a special offer for that firm providing strategic results using engi- item, or provide more information about neering muscle and creative edge. “Mobile it. QR codes make shopping a more inter- can be used for everything from geo-loca- active experience between customer and tion opportunities to advice within show retailer. rooms or shops in the vicinity of a user, to ease of payment or ease of product feature As with tablets, mobile applications can be comparison.” used as a POS system. Using a smartphone as a POS system offers flexibility, especially Mobile also starts a conversation. People for small retailers, and can decrease wait use their phones for more than just dial- time for customers. It is important, how- ing friends; they also use smartphones ever, for there to be a clear system in place to access social media, such as Facebook for customers to check out. Having to seek “Mobile can be used for everything from geo-location opportunities to ad- vice within show rooms or shops in the vicinity of a user, to ease of payment or ease of product feature comparison.” — Jonathan Cook, head of new media, Valtech UK© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 12
  13. 13. CHAPTER 3 Mobile out a salesperson to pay can feel frustrating and chaotic to some customers. Make sure salespeople are easily identifiable, and keep the check-out process efficient. Best practices Design. It may be tempting to use the website as a mobile application. However, it’s worth it to invest in a specific mobile app, one that is designed for smartphones. Doing so will ensure a better user experi- ence, and decrease the chances of crashing, leading to frustration on the part of the customer and salesperson. Security. As with tablet applications, it’s important to implement security stan- dards. Encrypt information whenever possible, and restrict access only to people who need it. Be part of the conversation. Because smartphones encourage the use of social media, it is important for a retailer to be a part of that conversation. “Anywhere someone can say something negative about your company, you should be there,” said Sweet Tooth’s Deckert. “It actually can present an opportunity to be extraordinary. Say someone tweets some- thing negative about their experience at your store. If you’re paying attention, you can see that tweet, and approach them to fix the problem before they leave. With that kind of attention to detail, they’re likely to tweet about that, too, leaving the customer (and their friends) with a positive feeling about your service.”© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 13
  14. 14. Chapter 4 Touchscreens T ouchscreens can form an integral part of the in-store experience. Frank Mayer and Associates They come in two forms, which can be used either separately or together: kiosks and digital signage. Benefits A touchscreen encourages interactivity and engagement on the part of the user. People are becoming more used to them, thanks to the prevalence of smartphones and tablets, and feel comfortable using a touchscreen. “Touchscreens are really changing tech- nology,” said Chad Wagner, industry marketing and PR manager for retail store solutions at Palo Alto, Calif.-based HP, a provider of technology solutions. “People expect it now. I’ve seen them walk up to a kiosk with a keyboard and try to touch the screen, and get frustrated when that doesn’t work.” Kiosks can be used to engage with customers, for way- finding purposes, to sign up for loyalty programs or to In addition to interactivity, kiosks and find out more information about items in stock. digital signage both can be used to convey information to customers. Digital signage can advertise sales or promotions, and at- of marketing, which can make it more tract the attention of passersby. Kiosks can effective and give it a broader reach. be used for wayfinding purposes, to sign up for loyalty programs or to find out more information about items in stock. Best practices Content. Content on digital signage and One of the advantages of both digital kiosks must be kept fresh and be relevant signage and kiosks is the technology is to the customer. Advertising high-end provided by the retailer. Instead of hav- luxury items at a big-box store will not ing to depend on the customer having a have an impact, because that’s not what the smartphone or tablet, the retailer installs customer is looking for in that particular the kiosk or digital signage and runs it. The shopping experience. If the content is static customer is sure to see it simply by enter- or repetitive, though, the customer easily ing the store, and it requires no previous will learn to tune it out. Consider partner- buy-in by the customer to see the messag- ing with a content provider to ensure the ing. The technology is a more passive form best content possible is displayed.© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 14
  15. 15. CHAPTER 4 Touchscreens Durability. Kiosks, especially, can see hard use from a variety of customers. But if the kiosk is inoperable when the cus- tomer goes to use it, it will leave a negative impression. Make sure to choose a durable, ruggedized kiosk. Ease of use. Kiosks must be intuitive and easy to use. Don’t have too much informa- tion on any one screen, and make sure there are large buttons that clearly indi- cate what the customer is supposed to do. When using a touchscreen that requires a customer to type information, make sure the buttons are large enough that typos don’t occur, and sensitive enough that it is not difficult to type the information in. If the loyalty program requires an email ad- dress, make sure the “@” button is clearly visible when typing in the address. Easy to read. Digital signage only has a few seconds to grab a customer’s attention. Don’t fill the screen with small text. Keep it simple and eye-catching. Integration. Integrate social media and QR codes with the digital signage. Perhaps keep the Facebook page posted on the digital signage, or let tweets be displayed in real-time. That allows customers to interact directly with the brand, and keeps them engaged.© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 15
  16. 16. Conclusion The future: Omni-channel retailing A “The shopping experience will ultimately become s multi-channel retailing becomes more prevalent, retailers are look- omni-channel retailing, where each engagement ing to the future. point is so integrated together that it offers an ab- “It’s not really about multi-channel so solutely seamless experience across all channels.” much,” said Frank Mayers’ Bowers. “It — Ron Bowers, senior vice president, Frank Mayer and Associates will ultimately become omni-channel retailing, where each engagement point is so integrated together that it offers an absolutely seamless experience across all “New technology and applications keep channels, which will allow the consumer coming and going at a blistering pace, but to shop the way they want, where they the faster the flow of new elements, the want and when. This shopping experience more opportunities there are to create engages rather than touches and turns sales,” said Frank Mayers’ Zoerb. “Retailers, loyalty into customers that are evangelists and even brand marketers, will need to for their store.” develop the capabilities and skill sets to manage this new technology and create MICROS-Retail’s Tamulewicz agrees. responsive, coordinated programs to maximize the results.” “Today, people are focused on punching through silo holes to accommodate Partnering with a technology provider who near-term business objectives,” he said. has a deep understanding of all the retail “But eventually, there is going to be a engagement points can help a brand know consolidation of systems. Instead of one how to take advantage of the available system in charge of customers and one in technology and create a program that not charge of promotions, for example, there only will work today, but also can grow and will be one system with a lot of different change as customer behavior does. functionality.” According to Stamford, Conn.-based research firm Gartner, sales of smartphones will reach 1.1 billion by 2015, and more than 408 million tablet computers will be sold by 2014. It is incumbent on retailers to integrate these technologies into their marketing efforts. Doing so may seem intimidating, but these technologies also present an opportunity for retailers to create a personalized, one-on-one relationship with customers that engenders loyalty and ultimately boosts profits.© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 16