Multi channel-retailing


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Multi channel-retailing

  1. 1. Multi-channel Retailing: An Introduction Developed and published by Sponsored by GUIDE 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.
  2. 2. 2© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. Contents Page 3 About the sponsors Page 4 Introduction: What is multi-channel retailing? Page 5 Chapter 1 | Benefits of multi-channel retailing Improved customer perception Increased sales Better data collection Enhanced productivity 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 Multi-channel Retailing: An Introduction
  3. 3. 3© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. About the sponsors 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 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.
  4. 4. 4 Introduction: What is multi-channel retailing? D espite a still-weak economy, retail sales are showing a rebound. Ac- cording to the U.S. Department of Commerce, total retail sales for the third quarter of 2011 were $1,052,734. Sales improved even more during the holiday season. The National Retail Federation said retail sales for the 2011 holiday season rose 4.2 percent from 2010, reaching $471.5 bil- lion. Clearly, people are still shopping. But how people shop is changing. In the third quarter of 2011, 4.6 percent of retail sales were ecommerce sales, according to the U.S. Department of Commerce — an increase of approximately 13 percent from the previous year. 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 a smartphone, according to a recent survey by the Pew Research Center, and 11 percent own tablet computers. And sales are con- tinuing to grow; Apple, maker of the popu- lar iPhone and iPad, posted record profits for 2011, due in large part to the sale of those devices. Shoppers not only are using their smartphones and tablets to purchase, but also to do research within a store. The challenge for retailers, then, is to incor- porate new technology with their existing sales channels, to create a seamless omni- 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 Retail, the retail arm of global communica- tions company Verizon. “But the dirty little secret is that usually, those channels are all operating as different silos, not as one unified brand. It’s up to the retailer to blur those lines and create a unified experience.” This guide, sponsored by Frank Mayer and Associates, will discuss the benefits of multi-channel retailing and how to imple- ment it across various engagement points. We would like to thank Frank Mayer and Associates for allowing us to provide this guide at no cost to the reader. Multi-channel retailing involves using a variety of engagement points to create a seamless shopping experience for customers. Those engagement points include: Brick-and-mortar stores Websites Tablets Kiosks Smartphones Digital signage Call centers Social media © 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. The channels
  5. 5. 5© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. C reating a successful multi-channel experience can seem intimidating to many retailers, who may wonder if the effort is worth it. They may not have a choice, however. “Consumers are expecting this kind of in- tegration already,” said Ron Bowers, senior vice president of Frank Mayer and Associ- ates, a Grafton, Wis.-based merchandising company. “They expect that if they order an item online, they can return it in the store, that kind of thing. It’s up to retailers to make sure that expectation is met.” But multi-channel retailing also offers plenty of benefits to retailers, benefits that make investing in the strategy worthwhile. Improved customer perception “Channels are disintegrating for custom- ers,” said Jeremy Gustafson, vice president at KSC Kreate, a digital commerce agency based in Hollywood, Fla. “People are watch- ing television and using their tablet at the same time. They expect the same kind of integration with their shopping experience.” Brands who don’t provide that kind of experience, he said, are likely to lose cus- tomers, especially as the digital generation gains even more buying power. Stores who do create a seamless experi- ence that integrates all different forms of technology, however, can gain significant customer loyalty. Those brands are per- ceived as forward-thinking and responsive to customer’s needs — qualities that will keep customers coming back. That improved perception offers another advantage, as well. In a world of big-box stores and online shopping, finding the best price is easier than ever for customers. A store that is perceived as responsive to customer needs and gives customers easy access to a variety of channels can differen- tiate itself in a crowded field. That allows the brand to compete on the experience offered, rather than just price. Customers might be willing to pay a little more for the convenience, and will come back repeat- edly, and brands don’t have to slice their profits just to keep up. Increased sales The primary driver for a retailer adopting any strategy is, of course, increasing profit, most frequently by increasing sales. Multi- Chapter 1 Benefits of multi-channel retailing Shopping no longer takes place exclusively in brick-and-mortar locations. Customers are blurring the lines between touchpoints, and they expect retailers to keep up.
  6. 6. 6© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. CHAPTER 1 Benefits of multi-channel retailing channel retailing, by offering a variety of engagement points for the customer to make a purchase, increases the convenience and ease of sales, thus boosting profit. 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 customer, she can go online at home and order the pants from the store’s website. Another customer, however, might be in the store trying on the pants and decide she’d like them in a different color. In that case, she can use an in-store kiosk to find the pants in the preferred color, order them and have them delivered to her home. Still another customer can use her smartphone to take a picture of the pants, send it to a friend and discuss whether to purchase them or not. Having a variety of engagement points gives retailers more tools to make a sale. Better data collection Knowing the customer is a key tenant for successful retailing, and multi-channel en- gagement points provide more opportuni- ties to gather information about customers. There are two benefits to the data collec- tion offered by multi-channel retail: First, the possibility for gathering more infor- mation exists, and the information can be used more effectively. “People usually are more comfortable entering information themselves, rather than giving it to a salesperson,” said Steve Deckert, marketing manager for Sweet Tooth, a Toronto-based provider of loyalty programs to retailers. “So they are far more likely to enter their email address into a kiosk than give it to a cashier. At the same time, by having that information available across a variety of channels, the retailer has more opportunities to capture the infor- mation, and more of it.” If a retailer can track what a customer is purchasing, and where, more targeted marketing can be introduced. Someone who tends to browse online and then pur- chase in-store, for example, can be emailed an invitation to a private showing in a store, and the list of products to be shown can be sent before the event, increasing the likelihood of purchase. Not only is it more likely that the customer will provide important information, but if all the different channels are communicat- ing, then the information only needs to be entered once. “If you’re going to ask someone for infor- mation about themselves, it needs to be available whenever they come to you,” said Verizon’s Bagel. “Otherwise, it feels intru- sive and annoying to have to repeat the same information over and over again.” Enhanced productivity Multi-channel retailing offers benefits for more than shoppers. Workers, too, can benefit from the use of new technology, Multi-channel retailing, by offering a variety of engagement points for the customer to make a purchase, increases the convenience and ease of sales.
  7. 7. 7© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 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, so a frequent customer can be given VIP status. Then, when a purchase is ready to be made, the customer does not have to stand in line, but rather can simply con- tinue talking to the salesperson and make her purchase via tablet. Best practices While every type of channel has its own unique set of challenges, there are some strategies that are true across all engage- ment points. Be consistent. Messaging across all chan- nels should have the same look and feel; the customer should always know exactly what brand she is interacting with. “Traditionally, retailers have approached each channel individually,” said Gustafson. “What is needed, though, is to create a single marketing message, and then figure out how to deploy it across all channels. The messaging doesn’t have to be identical, but it all needs to be clearly related.” Provide a value-add. Make sure each engagement point offers something to the customer. An in-store kiosk that simply accesses the company’s website, for ex- ample, is not bringing anything unique to the customer; instead, she can check the 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 better information than the customer can access via her own tablet or smartphone, the application will not bring much value to the transaction. Security. There is a fine line between be- ing helpful and being intrusive, and it’s a line that easily is crossed. Customers are aware of security issues, and are wary of providing too much personal information. “There has to be a clear connection be- tween the information collected, how it’s used and what value the customer receives from it,” said Bagel. “Understand your brand strategy and what level of intimacy is appropriate. Depending on your clien- tele, privacy might not be as important — digital natives tend to be far less concerned with privacy than Baby Boomers, for example. But everyone wants to know that they will receive a benefit from giving you information.” When all the different retail channels are communicating with each other, information only needs to be entered once (i.e., a shopper can sign up for a loyalty card online and use it in the store).
  8. 8. 8© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 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.”
  9. 9. 9© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 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 tablet application can integrate with inven- tory management, give the salesperson access to the customer’s loyalty program and connect the salesperson with similar stores across the country, as well as corpo- rate headquarters. “The benefit of a tablet at retail is that it allows the customer (and salesperson) to bring it right to the product under con- sideration, initially providing information that the consumer can ‘double-check’ on the item itself, and possibly complete the transaction without having to spend time at a sales desk or in a check-out line,” said Dave Zoerb, senior vice president of mar- keting at Frank Mayer and Associates. “It makes for a more dynamic, interactive and convenient sales experience.” A tablet also can serve as a POS system. This most famously is occurring at Apple stores, where there no longer is a tradi- tional check-out counter. Instead, Apple associates roam the floor with enhanced iPod Touches, and can process payments directly on the devices. Customers no lon- ger have to wait in line, and the perception is that the check-out time is much faster. Chapter 2 Tablets Tablets can be powerful tools for employees, creating a more dynamic sales experience and serving as a POS system.
  10. 10. 10© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. CHAPTER 2 Tablets Training also is a benefit of a tablet system. According to the U.S. Department of Com- merce, employment in the fourth quarter of 2011 rose by 200,000 jobs, much of that seasonal retail work. Seasonal workers need to be brought up to speed quickly, and even long-term workers need to know about special deals or promotions. Tablets can offer access to that information, get- ting workers onto the floor more quickly. “Salespeople are excited to work with tab- lets,” said Tom Tamulewicz, vice president of research and development at Columbia, Md.-based MICROS-Retail, a provider of enterprise applications for retail estab- lishments. “People are comfortable using them, even if they haven’t before, and they think they’re fun to use. That gets people eager to work with them, and eager to get out on the floor and sell.” In addition to training seasonal workers, tablets also give retailers flexibility in pay- ment acceptance. Because tablets are less expensive than a traditional POS system, a few can be purchased for known busy times and shipped to a store. The store can have extra registers when needed, without having to worry about installing a complex system, including finding space and paying for wiring. And of course, when the busy season has evaporated, the tablets can be put away, unlike a permanent installation. Best practices Usefulness. As discussed in Chapter 1 it’s important that the tablet application being used by the salesperson offer more than simply the standard information on the website. If a customer approaches the salesperson with a question, she wants to feel she is getting information she could not have as easily found for herself. Make sure the tablet application is integrated with other systems. Security. If used as a POS system, make sure the system is as secure as a standard POS application. “The same best practices for security apply,” said Tamulewicz. “Make sure everything is encrypted, restrict access only to those ap- plications that need it and restrict the num- ber of systems that touch anything critical.” Wi-Fi enabled. It seems simple, but to en- courage tablet use in the store, make sure Wi-Fi is enabled, and free. Customers are becoming used to having Wi-Fi access, and may become resentful if they can’t access their tablets on demand. This is especially true for the new class of tablets, such as the Kindle Fire, that do not have any 3G capability.
  11. 11. 11© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 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 check in, any daily specials can be promoted on the welcome screen, as well as the loyalty program. Cus- 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.” One salon is taking advantage of tablets to encourage upselling, promote loyalty programs and improve training.
  12. 12. 12© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. A ccording to an August 2010 survey by Dublin, Ohio-based research firm Sterling Commerce, 15 percent of U.S. consumers have used their mobile de- vices to make purchases. Ann Arbor, Mich.- based ForeSee Results found that, in 2010, 30 percent of shoppers used their phones for research, such as comparing product details, looking up prices and using store loca- tors. Fifteen percent of shoppers compared products and prices while in-store. Clearly, mobile is an important part of the shopping experience, and growing. Benefits Mobile apps differ from simply accessing the website. Mobile apps offer retailers the opportunity to do targeted marketing, such as delivering coupons based on location, and can encourage on-site purchasing. “People use mobile phones for conve- nience,” said Jonathan Cook, head of new media at Valtech UK, a digital consultancy firm providing strategic results using engi- neering muscle and creative edge. “Mobile can be used for everything from geo-loca- tion opportunities to advice within show rooms or shops in the vicinity of a user, to ease of payment or ease of product feature comparison.” Mobile also starts a conversation. People use their phones for more than just dial- ing friends; they also use smartphones to access social media, such as Facebook and Twitter. People can “like” a brand on Facebook instantly via a smartphone, and a Twitter conversation can share a cus- tomer’s view of a store (whether positive or negative) in real time. QR codes are another use for mobile. A code can be attached to an item, and the user takes an image of the code with her phone, which brings her to a website. That website might have a special offer for that item, or provide more information about it. QR codes make shopping a more inter- active experience between customer and retailer. As with tablets, mobile applications can be used as a POS system. Using a smartphone as a POS system offers flexibility, especially for small retailers, and can decrease wait time for customers. It is important, how- ever, for there to be a clear system in place for customers to check out. Having to seek Chapter 3 Mobile Uses of smartphones in retail, 2010 30 20 10 0 Comparing product details Make purchases Research 15% 15% 30% “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
  13. 13. 13© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 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.”
  14. 14. 14© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. T ouchscreens can form an integral part of the in-store experience. 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.” In addition to interactivity, kiosks and digital signage both can be used to convey information to customers. Digital signage can advertise sales or promotions, and at- tract the attention of passersby. Kiosks can be used for wayfinding purposes, to sign up for loyalty programs or to find out more information about items in stock. One of the advantages of both digital signage and kiosks is the technology is provided by the retailer. Instead of hav- ing to depend on the customer having a smartphone or tablet, the retailer installs the kiosk or digital signage and runs it. The customer is sure to see it simply by enter- ing the store, and it requires no previous buy-in by the customer to see the messag- ing. The technology is a more passive form of marketing, which can make it more effective and give it a broader reach. Best practices Content. Content on digital signage and kiosks must be kept fresh and be relevant to the customer. Advertising high-end luxury items at a big-box store will not have an impact, because that’s not what the customer is looking for in that particular shopping experience. If the content is static or repetitive, though, the customer easily will learn to tune it out. Consider partner- ing with a content provider to ensure the best content possible is displayed. Chapter 4 Touchscreens Kiosks can be used to engage with customers, for way- finding purposes, to sign up for loyalty programs or to find out more information about items in stock. FrankMayerandAssociates
  15. 15. 15© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. 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.
  16. 16. 16© 2012 NetWorld Alliance LLC | Sponsored by Frank Mayer and Associates Inc. A s multi-channel retailing becomes more prevalent, retailers are look- ing to the future. “It’s not really about multi-channel so much,” said Frank Mayers’ Bowers. “It will ultimately become omni-channel retailing, where each engagement point is so integrated together that it offers an absolutely seamless experience across all channels, which will allow the consumer to shop the way they want, where they want and when. This shopping experience engages rather than touches and turns loyalty into customers that are evangelists for their store.” MICROS-Retail’s Tamulewicz agrees. “Today, people are focused on punching through silo holes to accommodate near-term business objectives,” he said. “But eventually, there is going to be a consolidation of systems. Instead of one system in charge of customers and one in charge of promotions, for example, there will be one system with a lot of different 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. “New technology and applications keep coming and going at a blistering pace, but the faster the flow of new elements, the more opportunities there are to create sales,” said Frank Mayers’ Zoerb. “Retailers, and even brand marketers, will need to develop the capabilities and skill sets to manage this new technology and create responsive, coordinated programs to maximize the results.” Partnering with a technology provider who has a deep understanding of all the retail engagement points can help a brand know how to take advantage of the available technology and create a program that not only will work today, but also can grow and change as customer behavior does. Conclusion The future: Omni-channel retailing “The shopping experience will ultimately become omni-channel retailing, where each engagement point is so integrated together that it offers an ab- solutely seamless experience across all channels.” — Ron Bowers, senior vice president, Frank Mayer and Associates