Comments on: The Case to Cross It Up

By: Kevin Ertell

Kevin Ertell — Fri, 25 Sep 2009 16:39:29 +0000

Thanks to Chris and Kasey for a good discussion. While Kasey said much of what I would also have said, I have a few points to add to the conversation:
1. Cross-channel capabilities can be both small and large, and many retailers today are implementing various forms of them. For example, many retailers take returns in-store for online merchandise, and many don’t. From my conversations with many retailers, most of those who don’t take online returns in-store would like to take them because their customers want the ability, but retailers generally mention reasons like IT systems limitations as the impediment. Store operations people, in my direct experience, are very aware of this issue and feel the sting of unhappy customers. However, such issues don’t often reach the boardroom. Hence, my point about the 17-year-old girl, which was less about that specific instance and more about the need to make board members more aware of real-life customer issues that have an impact on customer satisfaction with the brand.
2. I’m not sure I agree that there aren’t a lot of cross-channel success stories out there. Kasey lists the Macy’s example above and also his report. I’ve seen numerous stories presented at various conferences, and we certainly had some good successes at Borders with capabilities like “In-store reserve” capabilities that allowed customers to put in-store items on hold via a web site interface. There was also real customer interest in the ability to add items to a wish list online and then access that wish list in-store. The problem may be that the cross-channel success stories are being told by and to the same group of e-commerce executives and not necessarily to CEOs and other physical business executives.
3. Large pure-play retailers like Amazon are starting to take significant market share from many businesses. As those pure-plays continue to improve their capabilities for their customers, physical businesses are going to have to come up with changes in their models in order to compete. Simply trying to compete with the pure-plays on their turf while running the physical side of the business as they always have feels like a long-term strategic mistake (see Defending the Status Quo Kills Companies at http://www.retailshakennotstirred.com/retail-shaken-not-stirred/2009/07/defending-the-status-quo-kills-companies.html). Implementing cross-channel strategies that combine to leverage store patronage to increase the viability of the online site while at the same time using online capabilities to increase the viability of the store presence may be the best way for existing businesses to blunt the impact of impressive new online competition.
4. Just to clarify, the point about the e-receipts was less about the functionality and more about it being an interesting way to developing ID’d transactions without the expense of discounts that could be associated with a loyalty program. The value of the ID’d transactions is the ability to gain customer data across channels to better understand the entirety of their interactions with a brand and to gain better insight into the value of multi-channel customers.
Chris, thanks for your comments and for starting an interesting discussion.

By: Kasey Lobaugh

Kasey Lobaugh — Wed, 23 Sep 2009 04:33:04 +0000

Chris asks a good question – is Cross-Channel something that consumers desire. He’s right in that ultimately that is the key question that retailers have to answer in order to determine if investments are appropriate.
However, I would not agree with the statement that there isn’t “compelling evidence that cross-channel is a strategy that consumers desire”.
Having spent the better part of the last 8 years studying this topic, reviewing findings of surveys, spending time with a large number of retailers, conducting focus groups on behalf of several reatilers, conducting on-line surveys and conducting in-store visits, I personally find the data overwhelming.
Now, granted, customers may not say ‘I want a cross channel experience’, however, they do expect teh brand to be integrated. They expect consistent prices on-line and in the store. They expect consistent brand image, merchandising strategies, marketing programs and they do expect that that the web channel knows the store exists and the store knows the web exists. (eg. inventory visiblity and product availabilty)
Additionally, there is real evidence that cross-channel initiatives have positive ROI and impact. Macy’s just today professed at Shop.org’s keynote that for every dollar they sell on-line, the on-line channel is the starting point for another $5.77 in the store within 10 days. This simple fact tells us that their on-line channel is worth 5x in value as the starting point of an in-store transaction. To me this is compelling, from the CEO at Macy’s – their on-line business is more valuable in a cross-channel role than in a single channel role.
Last year, I spent the better part of the year interviewing retail executives on their perspectives and have aggregated the findings in a research report titled Reinventing Retial. The net outcome of this was a unanimous view from the retail executives I interviewed that Cross-Channel retail is a real, consumer driven imperative.
http://www.deloitte.com/view/en_US/us/article/27c26426b420e110VgnVCM100000ba42f00aRCRD.htm
Now, with this all being said, I agree with Chris that cross-channel retail doesn’t mean the same thing to every retailer, and it has a stronger value proposition for some retailers and a weaker one for others.
Thanks Kevin for insights, and Chris for sharing an important point of view.

By: Chris Eagle

Chris Eagle — Tue, 22 Sep 2009 17:48:27 +0000

I think you (and probably the entire CCRC) start with the presumption that cross-channel is a good thing and that “1+1=3″.
I prefer to back up a level and not ask “why can’t companies implement cross-channel?” but instead ask “why don’t companies even try to be cross-channel?” At this point in time, there does not appear to be a lot of cross-channel success stories or even compelling evidence that cross-channel is a strategy that consumers desire.
Marketing a brand is hard enough in the first place. I think most companies prefer not to tackle the task of trying to maintain a clear, single brand identity when operating on several planes. This is not just a retail issue; other business markets like news/entertainment media and stock brokers are areas that seem like they would easily benefit from cross-channel and yet they don’t.
Until we see some more true cross-channel (and not multi-channel) retail success stories, I expect we’ll continue to see retailers go down the “We’re really a brick and mortar company but we sell stuff on the web too” path (Best Buy, Nordstroms) or skip the physical world all together (Amazon, Zappos).
If companies truly saw benefit to cross-channel business, or consumers were truly clamoring for these 1+1=3 benefits, then the impediments you list would be a moot point. But, in the meantime, most companies do not see emailed receipts or the satisfaction of a single 17-year old as reasons to make material and expensive changes to their core business strategy.