New Strategies Have Shoppers Doing DoubletakesBy Baselinemag | Posted 2007-11-30 Print
Ever since Richard Sears sent his first direct-mail ad for watches and jewelry in 1888, retailers have been remotely targeting consumers in numerous ways. Today's options include catalogs, cell phones, call centers, e-commerce sites and physical storefronts.
These strategies collectively are known as merged channel. Although the concept is hardly new, Americans strolling through shopping malls this holiday season will see its first visible signs. All kinds of hooks into-and from-the Web, cell phones and call centers will appear through store aisles and checkout lanes.
The Utopia of merged channel-still far from a reality-is that customers can make purchases in any environment they prefer. And retailers don't have to worry whether customers shop in-store or online, by catalog or mobile phone-as long as they don't buy from the competition. In what could be called the "boomerang strategy," what consumers will see this year will be quite removed from that ideal. Instead, stores will be using new Web-based technologies and techniques to get consumers into conventional brick-and-mortar stores. In effect, the use of various technologies will boomerang customers from stores to the Web (or mobile) and back into the store.
Consider the following examples:
Flash Sales: Some Wal-Mart customers fighting the throngs for this season's hottest toys will find themselves with an edge if they keep their cell phones handy. Customers who opt in for special offers will receive text alerts about short-duration (typically one-hour) deals on select in-store purchases. The company enabling this Wal-Mart service-Air2Web-is doing similar promotions for Sam's Club, Office Depot, Domino's and Foot Locker.
Peer Feedback: At Bloomingdale's in New York City, customers may get a chance to see the experimental "magic mirror" technology. A customer goes into the dressing room and tries on an outfit. She then walks over to a Web-enabled mirror and models for online viewers, who respond with their critiques and suggestions.
Instant Reviews: In Madison, Wis., shoppers at the Fair Indigo clothing store-the latest project of the former Lands' End e-commerce wizard Bill Bass-will be able to grab an item off the shelf, scan the barcode at a kiosk and instantly see all the online user comments about that product. "Online customer reviews are something our audiences love," says Bass, the company's CEO.
Though these are examples of cross-channel marketing, they are just that-examples. Few working merged-channel marketing systems exist today. In fact, very few major retailers have yet deployed databases that cleanly exchange data across channels. Integration and management challenges have proven exceedingly difficult.
For instance, blasting out a special promotion to a list of cell phone numbers is a straightforward one-way communication. But allowing a store associate to see the Web activity logged in by an in-store customer-or a list of questions asked of a customer service representative or order clarifications phoned into a catalog call center or tech support incidents called into an IT help desk-is much more difficult.
True merged-channel data exchange would also require internal political changes at most retail chains. Like most businesses, retailers have stove-piped online sales and distribution from catalog and store sales and marketing. Senior management would have to tear down the walls-or at least make the walls ultra-porous-between business units. Tearing down the walls between business units is difficult, because executives and management teams are still compensated on their primary mission and domain. Companies that have successfully broken down these barriers have created incentives for cooperation between previously competing teams.
Not all the new retail marketing technology to be deployed this holiday season will be related to merged channel. Some apparel chains will be using handheld mobile devices-not phones-to give their salespeople a real-time view of inventory, with the ability to ask that a runner bring out merchandise in a particular size and color.
Prompt production of an item desired by customers is critical to retail sales. Studies show that 25 to 30 percent of footwear customers leave the store as the sales associate goes to the back to retrieve the specific-size footwear the customer requests, says Karen Sharma, a marketer for iCongo, a software vendor that powers mobile devices for retailers.
Another technology due to make its retail debut this holiday season will likely go unnoticed by consumers: smart closed-circuit surveillance cameras.
Cambridge, Mass., software company Intellivid is working with several major retail chains to integrate and interlink store video cameras. Data from the cameras is fed to analytic software to examine shoppers' movements through stores. The intelligence gleaned from these smart cameras lets retailers analyze traffic flows through aisles and past displays to optimize product placement and merchandising opportunities.
The company has one warehouse club customer that has programmed the system to watch big-ticket items, such as big-screen TVs, and alert customer service when it appears a shopper may need assistance.
"We're trying to fix problems before they become problems," says Intellivid CEO Patrick Sobalvarro. "It's watching customer flow, identifying dead zones where customer service needs to be."
The technology has collateral benefits, too. Sobalvarro recalls how the system being tested in a large department store helped locate a missing child. When store security received a report of the missing boy, they rewound the video to the point at which the mother and child were separated. The system essentially reconstructed the series of events to discover the child hiding behind a display.
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