Channeling the right message

Utilizing technology for more consistent multi-channel retailing.

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Customers appreciate being recognized for their patronage. However, says
Holly Haines, Multi-Channel Retail Product Manager at Junction Solutions, it’s unfortunately the technology and systems that are preventing retailers from pushing out this consistent message across channels. There are many great advances in technology that can allow for data sharing between all channels, to allow for a consistent message, but companies that are multi-channel must take the leap into investing in these technologies.

ERS. Aligning brands to give consistency across the channels is a real challenge for multiple retailers. How can they do this effectively?

HH. The biggest challenge is sharing data and keeping a consistent message across channels in terms of business policies, pricing and promotions. Using shared data and software systems can greatly reduce the effects of an inconsistent message by channel. Unfortunately, many channels are not formed by companies at the same time. A company that started out as a catalog company purchased systems to manage the catalog business and then when they moved to internet or retail, these systems couldn’t accommodate the necessary functionality needed, so new systems were implemented in those channels. This causes a silo effect. A customer shopping in a catalog channel and then going onto the web or into the retail store and then not recognized as a valued catalog customer is a hindrance to providing customers with a sense of loyalty to that company or brand. If a customer is viewing a price of an item on the web, but is seeing a different price in store, this causes dissonance in the message to the customer about your brand.

ERS. The customer experience can be quite fragmented when it comes to prices, inventory, promotions and policies between channels. Yet, customers want a seamless shopping experience. How can this be successfully achieved?

HH. This goes back to the systems implementations. The best way to accomplish consistency in inventory, pricing and promotions is to have a central point of definition of this information and then allowing the order management and inventory systems used in the various channels pull from this data. This is why enterprise systems built for the multi-channel market are so valuable to a multi-channel business. Using a system built to handle the definition of pricing and promotions in the various channels from a single point of entry ensures that the pricing and promotions are the same in all channels. This data can then be pulled into the order entry systems, point of sale registers, and web sites to ensure that if a customer receives a promotion in one channel, they will be able to redeem it in any channel.

Many companies that developed channels over the years have not kept consistent business policies between channels and many times run them as completely separate operations. In some cases, a channel may require a different process,but in general, any messaging going to the customer regarding prices, promotions, inventory availability in the various locations, and return policies should be consistent to ensure customers are not getting confusing messages between your channels. If a customer sees an item in your catalog and then buys it on your website, they should be able to then return or exchange that item at your store location without any hassles or confusion. The customer sees the company as one entity. Therefore, management running these various channels needs to ensure they working together to guarantee that message.

ERS. Returning goods can also be a complex issue. What are the key steps to good customer management?

HH. Data sharing between channels is key. If I purchase something from your catalog, the company has my order history and they should know what I purchased and how much I paid for it. If I walk into that company’s retail channel and give them my order number or name and address, I would expect for that salesperson to have access to my order and be able to process my return. Turning away a customer at the retail channel and asking them to return it via mail back to the catalog or web channel is not acceptable in this day and age. The technology is there and consumers are savvy enough to know they should be able to get this type of service. Retailers must focus on putting processes in place to share this data between locations and channels to ensure customers are getting the type of service they are demanding.

ERS. How can retailers also foster customer loyalty holistically through these disparate channels?

HH. I’ve seen a few retailers that do a great job of bringing their channels together. Catalogers who offer in-store coupons on the back of their catalog to get traffic into the store. Or retail locations that offer on-site kiosks that let customers shop in the web channel to get additional product information or see other items that may not be available in the store, all while getting the customer adapted to the online shopping experience so that they will hopefully use it again at home. These are all ways of helping to build your multi-channel customer base.

They key is to identify your customer at all touch points and continually recognize their loyalty. Capturing the statistics of how often a particular customer shops online or in your store and using this information in your marketing to personalize your interaction with your customer is a great way to build loyalty and encourage that customer to shop in more channels. Customer communication and shopping behavior are very tightly related. If retailers are not consolidating and analyzing this data and acting upon it, they are missing out on many excellent opportunities to retain customers and get them to shop in additional channels. It is easier and less costly to keep an existing customer than to find new ones, so retailers must tap into their valuable customer and transactional data and use it to retain customers and generate additional sales in all channels. I have read research from AMR that states that a cross-channel shopper is worth four and a half times as much as a single channel shopper. These customers can be a goldmine if they are identified and relationships are managed properly.

ERS. Technology can now offer a 360 degree view of a multi-channel retail business for more effective customer service. How have you adapted this to streamline processes and offer the most cutting edge solutions?

HH. Junction Solutions’ vision for accomplishing retail best practices is to utilize best-in-class technologies from Microsoft including an enterprise backbone to connect and deeply integrate all channels of a retailer’s operations. It fulfills this vision through its products including:

JunctionMCR built on Microsoft Dynamics™ AX as the enterprise backbone including financial management, customer services, fulfillment, e-commerce, catalog management, and headquarters supply chain management.

JunctionISS built with Microsoft .NET to manage integrated store operations and point-of-sale (POS) for up to thousands of stores.

JunctionRQW on Microsoft SQL Server 2005 as the centralized data warehouse for all systems and the provider of advanced retail analytics, decision support tools, and merchandising/customer profiling tools.

Individually and in concert, the Junction Solutions’ Retail Product Suite offers retailers the opportunity to achieve best-in-class multi-channel integration and functionality while building on the rock solid and technologically advanced Microsoft application and platform technologies.

Through the use of Junction RQW, an integrated data warehouse tool, JunctionMCR (multi-channel retail), and JunctionISS (in-store systems) products allow for our users to manage all of their channels through one central data point. Through JunctionMCR, our users can define and manage items, customers, pricing and promotions that can all be shared through the various channel touch points to ensure a consistent message. In addition, order history is shared so that an order taken in the store through JunctionISS can be tied to a customer account that has also taken an order in the call center or on the web in our JunctionMCR application. This centralized data allows you to get that 360 degree view of the customer and their purchasing habits.

ERS. Once in place, what flexibility do your solutions offer as a company grows and changes?

JunctionMCR is built on the Microsoft Dynamics AX platform. Our company tagline is “where platform meets inspiration”, which says it all. We start with an amazing and cutting edge technology platform provided by Microsoft, and bring our industry expertise, innovation, and inspiration into the mix. By working with our customers, and keeping up-to-date on industry trends, we are able to offer innovative technology solutions for the multi-channel retailer.

Microsoft Dynamics AX enables our customers to run their business the way they want, and quickly make the data and business processes changes to the software as their business needs change. Many other software systems force the users down a path and define their business processes for them. Retailers need to be innovative to keep their customers interested, Microsoft Dynamics AX allows for the system to be adapted to manage new policies and procedures. With its unique layered development environment, our customers can customize the application to meet their specific business needs to quickly adapt to changing consumer and market demands. In addition, our customers have the benefit of utilizing our industry specific JunctionMCR solution, which contains functionality geared towards the retail industry and is built on Microsoft Dynamics AX. It truly is the best of all worlds rolled together in a single application. Microsoft Dynamics AX also runs in over 40 languages and multiple currencies, allowing for our customers to not only expand their channels, but easily expand globally if they choose to do so.

ERS. What kind of ROI can retailers expect and how is this measured?

HH. Our customers have informed us that they see immediate benefits soon after going live with our suite of products for the multi-channel industry. Some of these benefits are:
• Increased ability to handle larger order volumes
• Increased customer satisfaction due to better customer service
• Improved capability to present targeted offers due to better analytics
• Improved merchandising due to better visibility of operations across channels

Companies will decrease costs due to:
• Less IT integration and maintenance costs
• Less manual steps due to higher functionality and integration
• Lower inventory investment due to better planning capabilities
• Decreased use of outside data firms to perform such tasks as matchback, etc.

Independent research conducted by Nucleus showed that 75 percent of Microsoft Dynamics AX customers had achieved a positive ROI from Microsoft Dynamics AX with an average payback period of 23 months. Overall, a combination of careful internal planning and controls, knowledgeable consultants, and an appropriate technology match for business needs is required to ensure a positive ROI from an ERP deployment.

ERS. How do you envisage the future of multi-channel retailing and what is likely to propel its popularity?

HH. I think all retailers realize the power of multi-channel retailing. The more channels you can provide for your customers or potential customers to find you, the greater the odds are of getting the sale. I have seen many traditional store retailers moving into the web and even catalog channels which is very interesting. Many of the current multi-channel retailers started in catalog, then moved to web, then eventually put up some retail locations. But it is interesting to see that this isn’t always the typical path.

Customers will also drive the changes in the industry. As customers become more familiar with shopping on the web and using their handheld devices, they will want their retailers to provide them with this convenience. The combination of ordering online and in-store pickup satisfies a lot of customer needs. Shoppers are busy and do not have a lot of time to spend in the store, but also do not want to wait days to get delivery of items they order online or in the catalog. Therefore, this combination of online or call center ordering with an option of in-store pickup will give the customers the convenience they are looking for and should be a service all multi-channel retailers should think about implementing.

Technology advances are making their way into the retailer’s bag of tricks everyday. New innovations to tap into customer’s cell phones and handheld devices provide another means of marketing and promoting the brand. New technology even allows for retailers to pass information to the customer’s handheld through wireless technology while they are in the store. While costs of all of this technology must be justified to ensure it will increase sales, I think retailers recognize that maintaining a relationship with their customers and fostering customer loyalty is the key to their success.

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