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Multi-Channel Retailing: The Way Forward

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<div>The various Channels in retail are nothing but a series of touch points where a retailer interacts with his customer base for providing sales and service and receiving feedback. The Stores, internet, mobile phones, catalogues, kiosks, and tele-shopping are all channels to a retailer. Multiple retail channels not only extend a retailer&rsquo;s reach and presence in a market, but also provide friendly ways to service a customer</div> <div><br /> Scan a QR code from a catalog, check and reserve the product online, pick it up from the nearest store, and call tele-service for installation. If you are still feeling glad about the experience, hit the &ldquo;Like&rdq0uo; button on the retailer&rsquo;s social media page and receive a voucher for your next purchase. The retailer is increasingly recognising the customer and her needs and requirements irrespective of the location and media that she is using to shop or interact. The customer is getting popular. In fact, every customer is getting popular.&nbsp;</div> <div>The question that many would ask is, are channels supplementary or complementary to each other? Multiple retail channels not only extend a retailer&rsquo;s reach and presence in a market, but also provide friendly ways to service a customer.<br /> &nbsp;</div> <div>If everyone thought that multi-channel was the holy grail of retail, then it is time that one should pause to hear the buzzword bandwagon. Multi-channel is simply operating multiple customer touch points. In many cases, these touch points function in silos and the customer is aware of the aspect that these channels operate independently. Multi-channel is what it means literally &ndash; operating multiple channels.&nbsp;</div> <div><br /> The next step towards maturity is to enable cross-channel retail through presenting an integrated brand image, availability and service across all channels. This integration is highly critical for success and requires a deep amalgamation of technology, , and operational maturity.&nbsp;</div> <div><br /> The next level of maturity is omni-channel retail where the traditional barriers across channels do not exist. A customer will have uninhibited view of the availability across all channels and the customer&rsquo;s needs can be fulfilled from the most optimum channel. Omni-channel service will involve highly personalised and intuitive marketing based on customer history, location or even the device that the customer is using to interact with the retailer. Mentioning omni-channel to a retailer today can have two possible effects: it could either be aspirational or can be dismissed as a buzzword.</div> <div><br /> Retailers venturing into establishing or maturing their multi-channel operations should realise that they are laying the foundations for the next level. These foundations are not solely about technology to bind channels together. To build a phenomenal competitive advantage in multi-channel retail, retailers need to build a cohesive strategy comprising of the operational model, clarity, channel positioning, integrated systems and customer centricity.</div> <div><br /> This is not an easy task knowing that all the channels will not be raised from the ground at the same time for most retailers. Brick and mortar retailers, who have been operating for multiple years, would have matured in terms of business practices, merchandise offerings, pricing mechanisms and supply chain. To avoid the risks of adding and integrating another channel to the existing model, retailers often establish subsequent channels as a separate entity. These individual entities will have their own merchandise management, fulfillment and distribution strategy.&nbsp;</div> <div><br /> To add to these, multiple systems functioning in silos are implemented with limited integration, possibly only for product information. As both these channels begin to function in parallel, the retailer incurs supply chain and merchandise inefficiencies in inventory holding, fulfillment and performance measurement. Some also end up cannibalizing and creating confusion in the customer&rsquo;s mind.</div> <div>&nbsp;</div> <div>The operational and transformation and integration model in multi-channel retail should be centered on products and customers. Creating, maintaining and accessing consistent merchandise hierarchy and product information across all channels should be viewed as one of the top priorities. This ensures that both the initial merchandise planning, execution and downstream operations can be performed, reviewed and analysed in an integrated manner. The retailer can clearly devise merchandise roles, assortments and allocation towards each of the channels in which the products are to be offered. This also helps in creating a single view of product information, pricing and promotions for the customers as well.</div> <div><br /> Retailers operating in both store and e-commerce models can reap immense benefits by devising a comprehensive supply chain model. The design should provide for a credible and integrated supply chain model which looks at managing customer orders, consolidating inventory across locations and fulfilling the orders through effective and visible logistics.</div> <div><br /> In many cases, it becomes imperative to integrate fulfillment and inventory processes with third party distribution and logistics providers. These need to be further integrated with the customer-facing functions in each channel to provide accurate order and service status.</div> <div><br /> Maintaining product availability across multiple channels is a significant task for any retailer. To ensure that availability in one channel does not happen at the cost of another, a retailer needs to master optimal and accurate juggling of available inventory across stores and e-commerce channels. Often, store inventory requires to be consolidated for e-commerce fulfillment or vice-versa. Merchandisers should harness the use of technology to appropriately guide replenishment and consolidation across multiple channels to ensure inventory performance, maximised margins and consistent service levels.</div> <div><br /> If creating an integrated product and supply chain backbone sounds challenging, then managing customer expectations across channels is no mean feat either. The process of creating a unified across all channels begins with the effective capture of customer information. Irrespective of the channel used by the customer to connect with the retailer, all customer information should be funneled into a single repository. Any subsequent customer interaction across any channel can be driven into this repository and mapped to a specific customer. For any multi-channel retailer, this customer information repository is sacred and a treasure trove to reap multi-channel benefits.&nbsp;</div> <div><br /> The customer repository is a single-point reference to all customer transaction history, feedback, product interactions, channel interactions, stored value balances and every other transaction that a customer would have had with a given retailer. Retailers are gaining significant maturity in harnessing this data to derive insights on the customer interactions. These are further used for formulating creative and personalised pricing, promotion and loyalty programmes. Customer data is the cornerstone for retail business decisions and a springboard to success for any multi-channel retailer.</div> <div><br /> In addition to the business function integration across products and customers, a shift in organisation culture is also warranted for multi-channel success. An organisation-wide sensitisation is required to educate the customer-facing employees across all channels to nuances of multi-channel retail.&nbsp;</div> <div>&nbsp;</div> <div>Employees at the store should be trained to handle customers who have compared products and prices online and have come to the store for a demonstration, product feel and service information. In many cases, these customers will be more aware of the product features and latest prices than the store employees. Conversely, there will also be customers who have arrived at the store to experience the product and then buy the product from the most economical location online. At every point of the customer interaction, the retail organisation should introduce and promote the other channels as well.&nbsp;</div> <div><br /> Multi-channel retail is an evolutionary process that requires a decisive and step-by-step approach. are aggressively gearing up for meeting the needs of an increasingly technology savvy population which is going to drive the next wave of retail. A lot of this retail demand is going to be fuelled from both established and upcoming urban centres. Catering to these dynamics require an integrated strategy to provide a convenient customer experience across all phases of a customer&rsquo;s shopping life cycle.</div> <div>&nbsp;</div>