Cross-channel retailing is a major competitive differentiator among retailers. The evolution of cross-channel retailing stretches far beyond the e-commerce channel and has broadened itself to include increasingly popular Web 2.0 technologies as well as mobile commerce. As these channels are increasingly becoming more widespread, retailers are still grappling with ways to maintain brand consistency across channels. Beyond brand consistency, retailers also strive to offer a shopping channel based on the individual shopper's personal preference. Retailers today that have mastered both brand consistency and personalized channel retailing are reaping major rewards. E-commerce Investments Grow
Although 2009 has been one the most challenging markets for retailers in recent history, merchants are continuing to invest in e-commerce, recognizing that their Web site is one of the fastest growing areas of their business.
According to the 8th Annual Merchant Survey released this year from the e-tailing group, 70 percent of retailers indicated that they intend to invest the same or somewhat more in e-commerce as they did last year.
"Looking to the Internet for elusive sales, merchants recognize that the online channel is core to multi-channel success," says Lauren Freedman, president of the e-tailing group. "However, the pressure for performance is greater than it has ever been as senior management seeks profits while customers demand more from every e-commerce experience."
To stay ahead of competition, retailers are tweaking their Web sites for optimal performance and ROI and are continuing to focus on targeted e-mails, refining onsite search and upgrading site design including enhancing onsite merchandising.
"Platform upgrades may be on many wish lists, but 2009 will be remembered for refinement of navigation, onsite search and Web site tweaks," says Freedman.
"Merchants that truly optimize e-commerce and multi-channel potential with relevant and profitable selling solutions will survive and thrive as the dominant players in their categories."
Other major cross-channel initiatives include focusing on delivering greater customer service and meeting expectations that ideally result in more long-term loyalty. Initiatives involving site improvements that are top-of mind for retailers in 2009 include:
A/B Testing 51%
Social Networking 44%
Content Management 39%
Alternative Payments 39%
Increased clicks, usage and conversion rates remain the top metrics among retailers for measuring the success of their Web sites. This, together with revenue and order size metrics, are used for measuring effectiveness of online marketing efforts.
E-Commerce Upgrades in Action
Since The Shoe Gallery launched its e-commerce site, www.shoegalleryonline.com in 2008, the Web site has proven to be a very successful and profitable addition to the business. The Shoe Gallery uses Celerant's e-commerce platform to offers enhanced Web features and functionality. The Web site was developed with Web technology to be user- friendly and visually appealing.
"We are extremely pleased with the design and functionality of our e-commerce site," says Will Brooks, controller of Shoe Gallery. "Since going live with the site six months ago, we have experienced increased sales and have seen an exceptional number of new orders. The existing search engine optimization already embedded into the design of the site, along with the ability to feed into price comparison sites, have aided in increasing our sales without spending excess money on marketing. It has been fabulous working with the Web design team because they work with us to figure out innovative ways to improve the site, such as adding a zoom feature to our images and a special Web page where you can sift through the popular brands we sell."
In April 2009, Canada's Forzani Group selected GSI as the backbone of its multi-channel strategy. Under a seven year agreement, Forzani Group will gain e-commerce technology, order management, fulfillment and customer care services. Sport Chek will be the first of the company's Web stores to launch on the GSI platform.
"E-commerce was the next step in our multi-channel strategy," says John Hould, senior vice president of Forzani Group. "GSI was the top choice given their technology, comprehensive services, e-commerce expertise and their commitment to serving Canadian retailers and our customers."
Targeted e-mail alerts and Web recommendations have been a huge win for specialty retailer Wine Enthusiast.com, which sells everything to go with the wine lifestyle.
The online retailer was able to increase its conversion rate by 200 percent using MyBuys. Web recommendations are converting at 9.8 percent and e-mail alerts are converting at 7.4 percent for Wine Enthusiast.
"With MyBuys, we got great results right out of the chute," says Glenn Edelman, vice president, online marketing and merchandising, Wine Enthusiast. "MyBuys' recommendations are so compelling that when WineEnthusiast.com shoppers are engaged by them, conversion rate goes up dramatically."
Wine Enthusiast uses customer reviews from MyBuys' partner PowerReviews to drive revenue by including product ratings on its site. The company also includes ratings in the MyBuys-generated e-mail alerts it sends to customers on its mailing list, and in the e-mails it sends to customers to ask them to rate products. The e-mails with review requests are clicked on twice as often as e-mails without them, and are opened at three times the rate. The overall performance of messages with review requests is seven times better than messages without.
Another retailer to discover rapid success through personalized product recommendations is Burton Snowboards, which boosted its sales by 25 percent when it launched richrecs from richrelevance on store.burton.com. The software was successfully implemented in less than four weeks and is driving almost 25 percent of overall site sales.
Burton, which previously displayed static recommendations based on in-house data for top sellers, realized its customers wanted a more personalized shopping experience. Faced with a tight deployment deadline, Burton worked with the richrelevance professional services team to develop and execute an implementation plan. The team ensured that richrecs seamlessly integrated into Burton's existing technology platform, and was optimized for maximum conversion and sales lift while providing an enhanced shopping experience. Burton had immediate access to detailed program analytics and reporting through richrelevance's Web-based dashboard.
"It was natural that Burton wanted to provide its online customers with the most highly personalized product recommendations possible," says Justin Olson, head of e-commerce, Burton Snowboards. "richrelevance not only delivered on this promise, which significantly increased sales and materially improved the customer experience on day one, but did so in only four weeks and in a way that wholly exceeded our expectations of a professional services team."
Web 2.0: Retail's New Frontier
Although retailers are continuing to build out their e-commerce platforms by enhancing their customer's online experiences, companies also are investing in new rich media platforms including social networking, mobile and personalization applications.
The new rich media applications that are planned for deployment in 2009 according to the third annual Scene 7 survey from Adobe Systems are: blogs (32 percent); user ratings, rankings, comments (31 percent); 360-degree spin (29 percent); catalogs and circulars (28 percent); podcasts or live video feed (28 percent); product comparisons (27 percent) and videos (27 percent).
Retailers are also beginning to dabble in Twitter, a social networking and micro-blogging site that allows users to send and receive what are known as tweets, or text-based posts limited to 140 characters. Some of the world's largest retailers have jumped on the Twitter bandwagon including Zappos, Meijer and TJ Maxx. These retailers and hundreds of others are using the free micro-blogging site for prime marketing opportunities.
Beyond popular social networking sites, retailers are buzzing about the prospect of mobile commerce driving additional revenue. More than 1.1 billion mobile phones were shipped in 2008. Due to their high adoption rates and rich functionality, smartphones including the iPhone, will undoubtedly be the device most responsible for delivering a usable mobile commerce experience.
The iPhone is making a charge into the smartphone arena unlike any other. According to IDC, the iPhone seized 21 percent of the U.S. smartphone market share at the conclusion of 2008. The Apple iPhone's large screen size, high resolution and easy-to-use finger motions are key to enabling mobile shopping.
The challenge retailers currently face is developing a mobile commerce strategy to reach the other 79 percent of the current U.S. smartphone market that isn't using an iPhone. According to Forrester, only 14 percent of U.S. Web buyers who own a mobile device that is capable of accessing the Internet have used it to make a purchase. Typically, this purchase is digital content such as music and ringtones.
For retailers that want to be on the cutting edge by being first to market with a mobile store, the big question is how do you get started? It's critical that retailers look at how their mobile commerce strategy can be part of a larger multi-channel strategy. Mobile commerce initiatives should be considered as an extension of the retailer's Web site and brick-and-mortar experience instead of as a separate selling channel.
