Tag Archives: Omnichannel
The Catalog is Dead.
According to the Multi Channel Merchant Outlook 2014 survey, the eCommerce website (not a surprise ) is the top channel through which merchants market (90%). The social media (87.2%) and email (83%) channels follow close behind. Although catalogs may have dropped as a marketing tool, 51.7% of retailers said they still use the catalog to market their brands.
Source: MCM Outlook 2014
The Changing Role of the Catalog
Merchants are still using catalogs to sell products. However, their role has changed from transactional to sales tool. On a scale of 1 to 10, with 10 being the most important, merchant respondents said that using catalogs as mobile traffic drivers and custom retention tools were the most important activities (both scored an 8.25). At 7.85, web traffic driver was a close third.
Source: MCM Outlook 2014
Long Live the Catalog: Prospecting
More than three-quarters of merchant respondents said catalogs were the top choice for the method of prospecting they will use in the next 12 months (77.7%). Catalog was the most popular answer, followed by Facebook (68%), email (66%), Twitter (42.7%) and Pinterest (40.8%).
What is your point of view?
How have catalogs changed in your business? What are your plans and outlook for 2015? It would be very interesting to hear points of views from different industries and countries… I’d be happy to discuss here or on Twitter @benrund. My favorite fashion retailer keeps sending me a stylish catalog, which makes me order online. Brands, retailer, consumer – how do you act, what do you expect?
I was recently searching for fishing rods for my 5-year old son and his friends to use at our neighborhood pond. I know nothing about fishing, so I needed to get educated. First up, a Google search on my laptop at home. Then, I jostled between my phone, tablet and laptop visiting websites, reading descriptions, looking at photos and reading reviews. Offline, I talked to friends and visited local stores recently, searching for fishing rods for my 5-year old son and his friends to use at our neighborhood pond. I know nothing about fishing, so I needed to get educated. First up, a Google search on my laptop at home. Then, I jostled between my phone, tablet and laptop visiting websites, reading descriptions, looking at photos and reading reviews. Offline, I talked to friends and visited local stores.
This blog post initially appeared on CMSwire.com and is reblogged here with their consent.
The product descriptions weren’t very helpful. What is a “practice casting plug”? Turns out, this was a great feature! Instead of a hook, the rod had a rubber fish to practice casting safely. What a missed opportunity for the retailers who didn’t share this information. I bought the fishing rods from the retailer that educated me with valuable product information and offered free three to five day shipping.
What does this mean for companies who sell products across multiple channels?
Virtually everyone is a cross-channel shopper: 95 percent of consumers frequently or at least occasionally shop a retailer’s website and store, according to the “Omni-Channel Insights” study by CFI Group. In the report, “The Omnichannel Opportunity: Unlocking the Power of the Connected Customer,” Deloitte predicts more than 50 percent of in-store purchases will be influenced digitally by the end of 2014.
Because of all this crosschannel activity, a new term is trending: omnichannel
What Does Omnichannel Mean?
Let’s take a look back in time. Retailers started with one channel — the brick-and-mortar store. Then they introduced the catalog and call center. Then they built another channel — e-Commerce. Instead of making it an extension of the brick-and-mortar experience, many implemented an independent strategy, including operations, resources, technology and inventory. Retailers recently started integrating brick-and-mortar and e-Commerce channels, but it’s not always consistent. And now they are building another channel — mobile sites and apps.
Multichannel is a retailer-centric, transaction-focused view of operations. Each channel operates and aims to boost sales independently. Omnichannel is a customer-centric view. The goal is to understand through which channels customers want to engage at each stage of the shopping journey and enable a seamless, integrated and consistent brand experience across channels and devices.
Shoppers expect an omnichannel experience, but delivering it efficiently isn’t easy. Those responsible for enabling an omnichannel experience are encountering barriers. Let’s look at the three barriers most relevant for marketing, merchandising, sales, customer experience and information management leaders.
Barrier #1: Shift from product-centric to customer-centric view
Many retailers focus on how many products are sold by channel. Three key questions are:
- How can we drive store sales growth?
- How can we drive online sales growth?
- What’s our mobile strategy?
This is the old way of running a retail business. The new way is analyzing customer data to understand how they are engaging and transacting across channels.
Why is this difficult? At the Argyle eCommerce Leadership Forum, Vice President of Multichannel at GameStop Corp Jason Allen shared the $8.8 billion video game retailer’s approach to overcoming this barrier. While online represents 3 percent of sales, no one measured how much the online channel was influencing overall business.
They started by collecting customer data for analytics to find out who their customers were and how they interacted with Game Stop online and in 6,600 stores across 15 countries. The analysis revealed customers used multiple channels: 60 percent engaged on the web, and 26 percent of web visitors who didn’t buy online bought in-store within 48 hours.
This insight changed the perception of the online channel as a small contributor. Now they use two metrics to measure performance. While the online channel delivers 3 percent of sales, it influences 22 percent of overall business.
Take Action: Start collecting customer data. Analyze it. Learn who your customers are. Find out how they engage and transact with your business across channels.
Barrier #2: Shift from fragmented customer data to centralized customer data everyone can use
Nikki Baird, Managing Partner at Retail Systems Research (RSR), told me she believes the fundamentals of retail are changing from “right product, right price, right place, right time” to:
- Who is my customer?
- What are they trying to accomplish?
- How can we help?
According to RSR, creating a consistent customer experience remains the most valued capability for retailers, but 54 percent indicated their biggest inhibitor was not having a single view of the customer across channels.
Why is this difficult? A $12 billion specialty retailer known for its relentless focus on customer experience, with 200 stores and an online channel had to overcome this barrier. To deliver a high-touch omnichannel experience, they needed to replace the many views of the customer with one unified customer view. They invested in master data management (MDM) technology and competencies.
Now they bring together customer, employee and product data scattered across 30 applications (e.g., e-Commerce, POS, clienteling, customer service, order management) into a central location, where it’s managed and shared on an ongoing basis. Employees’ applications are fueled with clean, consistent and connected customer data. They are able to deliver a high-touch omnichannel experience because they can answer important questions about customers and their valuable relationships, such as:
- Who is this customer and who’s in their household?
- Who do they buy for, what do they buy, where do they buy?
- Which employees do they typically buy from in store?
Take Action: Think of the valuable information customers share when they interact with different parts of your business. Tap into it by bridging customer information silos. Bring fragmented customer information together in one central location. Make it universally accessible. Don’t let it remain locked up in departmental applications. Keep it up-to-date. Automate the process of updating customer information across departmental applications.
Barrier #3: Shift from fragmented product data to centralized product data everyone can use
Two-thirds of purchase journeys start with a Google search. To have a fighting chance, retailers need rich and high quality product information to rank higher than the competition.
Take a look at the image on the left. Would you buy this product? Probably not. One-third of shoppers who don’t make a purchase didn’t have enough information to make a purchase decision. What product information does a shopper need to convert in the moment? Rich, high quality information has conversion power.
Consumers return about 40 percent of all fashion and 15 percent of electronics purchases. That’s not good for retailers or shoppers. Minimize costly returns with complete product information so shoppers can make more informed purchase decisions. Jason Allen’s advice is, “Focus less on the cart and check out. Focus more on search, product information and your store locator. Eighty percent of customers are coming to the web for research.”
Why is this difficult? Crestline is a multichannel direct marketing firm selling promotional products through direct mail and e-Commerce. The barrier to quickly bringing products to market and updating product information across channels was fragmented and complex product information. To replace the manual, time consuming spreadsheet process to manage product information, they invested in product information management (PIM) technology.
Now Crestline’s product introduction and update process is 300 percent more efficient. Because they are 100 percent current on top products and over 50 percent current for all products, the company is boosting margins and customer service.
Take Action: Think about all the product information shoppers need to research and make a decision. Tap into it by bridging product information silos. Bring fragmented product information together in one central location. Make it universally usable, not channel-specific. Keep it up-to-date. Automate the process of publishing product information across channels, including the applications used by customer service and store associates.
Delivering an omnichannel experience efficiently isn’t easy. The Game Stop team collected and analyzed customer data to learn more about who their customers are and how they interact with the company. A specialty retailer centralized fragmented customer data. Crestline centralized product information to accelerate their ability to bring products to market and make updates across channels. Which of these barriers are holding you back from delivering an omnichannel experience?
Product Information Management (PIM) is an investment, not a “cost.” This is so important it’s worth repeating: “PIM is an investment.” If you are a retailer of any size (small or big, it makes little difference), it’s likely your most painful challenges include the following:
- Lost sales from out-of-stock issues
- Lost time haggling over return disputes
- Squandered hours reconciling product information promotion discrepancies across all channels
And, if you’re comfortable experiencing the following, then no change is needed:
- Slower Time-To-Market for for new product introductions and the corresponding wasted dollars
- Wasted time spent relaying basic product information to customers and partners
- Overall brand erosion
However, for those who want to embark on a journey toward redemption, I will use this post to lay a good foundation and to demystify PIM.
Here are 6 reasons to consider transforming your business using PIM. Note that the priority order will vary by industry and situation.
1) PIM for Operational efficiency
This really boils down to a reduction in the number of call center questions regarding basic item information, a reduction in the number of instances when inventory levels are insufficient, and a reduction in the number of purchase order errors, resulting in incorrect shipments or adjustments.
2) PIM for New Product Introduction (NPI)
Introducing a new product requires the coordinated efforts of dozens of internal and external staff. It can be a fairly complex task. Even a simple product may require hundreds of attributes, all derived from multiple systems residing within and outside the organization.
3) PIM to Reduce the “Time to Market”
Studies have shown that high-performing companies generate, on average, 61 percent of their sales from successful introductions of new products and services. PIM will help you have a streamlined process for creating new products and distributing them to eCommerce and other channels in the ecosystem. The faster, the better. Why? Well, you will have them before anyone else and secondly there will be more time to sell them.
4) PIM for Business growth and improved customer satisfaction
The instantaneous nature of online retail impacts consistency and adds an additional layer of complexity to the management of product information. Customer satisfaction is (also) correlated to rich, contextual, and consistent product information across sales channels. Companies that lack this discipline experience brand erosion with consequental detrimental impact on overall business performance.
5) PIM to Improve your supplier performance
How would you answer your CFO if she asked for the average cost to on-board a product from a supplier? All things considered, my bet is that it would be in the neighborhood of $500-$700. But even if it is $200 you are still in deep water. In fact, with a bit of math you’ll figure out the incidence of this cost when considering the tens of thousands of SKUs that are introduced into the market every year. Forward-thinking retailers are leveraging an integrated supplier portal to enhance supplier collaboration. This saves precious time and manpower, often bringing down that cost to less than $5.
6) PIM for Omni-channel enablement
A retail omni-channel strategy cannot not contemplate the management of product information. This is because retailers need to collect information from multiple sources, optimizing content and facilitating timely distribution of content across multiple channels. Very often, though, information in stores, eCommerce sites, mobile apps, and print catalogs just don’t match up. Often, it is difficult to connect products and customers, resulting in poor customer experiences. This is a large topic that will be covered in upcoming posts.
Looking for more information on how PIM can actually lay the foundations to deliver on these promises? There is more in my previous blog posts here, here, and here. There is also a SlideShare presentation here. Finally, we have a new eBook called The Informed Purchase Journey available here.
For years, a customer’s purchase process was something of “An Unexpected Journey.” Lack of insight into the journey was a struggle for retailers. The journey was fraught with questions about product research habits, purchases and crucial factors that spark purchase decisions.
Today, the customer purchase journey no longer has to be a “guessing game.” Data integration and analytics are able to assist retailers in understanding this journey. To begin, let’s examine how consumer behaviors and the role of product information have changed since the advent of substantial bandwidths and social buying. To do so, lets examine the way shoppers buy today.
The customer buying experience has changed in the following ways:
The days of the single visit to a trusted retailer are behind us. Today’s shoppers are in control. They are hugely aware of their power as consumers, and they’re exercising it freely.
Buyers aren’t using one specific channel anymore. They’re shopping in stores, online, through mobile apps, on social platforms, and from catalogs simultaneously. Lacking a central focal point, quality data integration and analytics have become imperative to understanding this behavior. Retailers must be able to track the purchase decisions of one consumer as he or she switches back and forth amongst these channels. If done correctly, a retailer would be able to recognize behavior specific to individuals and act on it, serving ads or timely discounts to them.
Purchasing decisions are “crowd-informed.” Recommendations and reviews from peers guide consumers and validate their choices every step of the way. As a result, it has become increasingly necessary for retailers to understand how they are being reviewed. But more specifically, it is important for the retailer to identify and target influential reviewers. If this is done effectively, the retailer may be able to personalize their experience and make that influential consumer feel special. This may seem like a complicated task with small returns, but imagine if they write a positive review that is ultimately read by thousands of people. This could lead to a fantastic return on investment for the retailer.
Shoppers used to be dependent on a few sources of information. Now with Internet search tools, consumers are able to hunt for answers themselves. As such, retailers must understand what type of information their consumers are searching for. With this information, retailers may be able to update the content on their websites, blogs, or social channels to provide information customers need. To visualize this purchase journey we’ve created the INFAgraphic below.
So how can I learn more?
Join us at Informatica World 2014 to learn rich information about retail technology and the “purchase journey.”
Experts will share ways of leveraging your data to boost sales and heighten customer experience. The conference also has a dedicated MDM Day on Monday May 12 with workshops and sessions showing how vendors, distributors, retailers and individuals interact in the “always-on,” connected world.
Reserve your spot by signing up here.
When seeking to justify an investment in Product Information Management (PIM) and building the business case, companies can investigate which key performance indicators are impacted by PIM. The results of the international PIM study demonstrate that a return on investment (ROI) from an Enterprise Product Information Management (PIM) solution is possible within the framework of a multichannel commerce strategy.
1. Search engines
60% of web users use search engines to search for products. (Source: Searchengineland.com)
The results of the international PIM study show that a return on investment (ROI) from an Enterprise Product Information Management (PIM) solution is possible within the framework of a multichannel commerce strategy. Over 300 retailers and manufacturers from 17 countries participated in the extensive study by Heiler Software. The study delivers more than 30 pages of measurable results. One such result is that PIM leads to a 25% faster time-to-market thanks to SEO products. (Source: www.pim-roi.com)
3. Shopping cart abandonment
90% of shopping cart abandonments occur because of poor product information. (Source: Internet World Business Magazine)
4. Product returns
40 is the critical number. 40% of buyers intend to return a product when they order it. 40% order more variations of a product. 40% of all product returns are due to poor product information. (Source: Magazine Wirtschaftswoche 7.1.2013 and Return Research – average German mail-order market)
5. Print impacts online
Printed catalogs lead to a 30% boost in online sales. (Source: ECC multichannel survey)
6. Cost savings in print catalog publishing
PIM enables a saving of USD 280,000 by automating manual print catalog production. (Source: LNC PIM survey 2007)
7. In-store sales and customer service
61% of retail managers believe that shoppers are better connected to product information than in-store associates. (Source: Motorola Holiday Shopping Study 2012)
8. Margins with niche products
80% of Heiler PIM customers say they sell at higher margins by pursuing a long tail strategy and increasing assortment size. (Source: www.pim-roi.com)
9. Social sharing
Social sharing generates value. And, on average across all social networks, the value of a social share drives $3.23 in additional revenue for an event each time someone shares. (Source: Social commerce numbers, October 23, 2012)