Break Down Your Barriers to Multichannel Success

Many catalogers have evolved during the past decade from dedicated print catalogers to multichannel marketers. In expanding into other sales channels, most catalogers wisely have brought along e-commerce and brick-and-mortar retail specialists to run the additional channels.

But if your own efforts at multichannel marketing have been less than stellar, following are some success strategies that may prove useful.

Multichannel Rules

Virtually every study that looks at consumers who shop via more than one channel shows that multichannel shoppers spend more. For instance, a recently completed Shop.org survey found:

- the average retail customer spent $1,267 per year in stores;

- customers who had visited retailers’ Web sites spent on average $1,380 in stores; and

- the average customer who has bought online spent $1,887 in stores, 50 percent more than those retail shoppers who don’t use the Web.

Certainly, if you add marketing channels, you’re doing something right. But as Laura Van Sickle, director of catalog and e-commerce for shoe marketer Johnston & Murphy (J&M), and Ann Delevante, president of consulting firm Crunch Marketing, pointed out, some marketers are doing some things seriously wrong. Specifically, they said, many marketers — particularly those rooted in retail who’ve evolved into catalogers and e-tailers — must address the oft-times distant relationship between catalog, e-commerce and retail departments in order to truly maximize the benefits of being multichannel.

As direct marketers, “We speak in terms of sales per square inch, response rates, average order values and dollars per book,” said Delevante, who consults for J&M. “Direct marketing is completely accountable through measurable results and return on investment. But retailers speak in terms of sales per square foot, units per transaction, dollars per transaction and multiples. They’re not used to having the trackable response metrics that we as direct marketers take for granted. So we must do it for them.”

Delevante and Van Sickle offered their advice on multichannel marketing during their session “Improving the Marriage Between Retail Stores & Catalog/E-commerce,” held during the Annual Catalog Conference in May.

To overcome the inevitable silos that many multichannel companies operate within, “system limitations may need work-arounds, Band-Aids or duct tape,” Delevante said. To improve communications among channel departments — that is, to enable different channels to collect information about various types of customers — use a good service bureau, she advised. This will help you to overcome limitations of in-house resources.

Another tip: Have your IT department utilize a field in your retail point of sale registers to capture customers’ e-mail addresses. Once all departments are able to accurately capture customer data from other channels (e.g., your retail department accessing catalog customer data), you can see how many new customers are coming into your stores by month and by store, Delevante said. “Our goal for Johnston & Murphy is to get single-channel buyers to migrate into multichannel.”

She noted that J&M, which captures 60 percent of all customers at retail, monitors the channel mix of its customer base. For example, 13 percent of its customers shop in more than one channel, and 1 percent buy in all three channels.

Nine Tactics

1. Perform matchbacks. Every multichannel merchant must put in place database management tools so all channel departments can match back all available customer data. J&M relies on Abacus’ ChannelView matchback software, which views catalog or e-mail files and matches them back to retail sales.

“We’ve used it for two-and-a-half years now, and it’s completely changed how we view multichannel,” Delevante said. “It’s helped us communicate better with our retail marketers.”

The matchback software has enabled J&M’s catalog department to justify mailing books to the company’s retail buyers. The data proved that customers who received catalogs were buying more in stores than those retail customers who weren’t getting catalogs. In fact, data showed that 64 percent of the retail demand generated by the company’s catalogs is incremental.

2. Test new ideas. But not any old catalog can give store traffic such a lift. “Be open to testing new ideas specifically for retail,” Delevante suggested. “Test page counts, creative and merchandise.

“We found that retail customers are more fashion-oriented, while direct customers are more traditional,” she continued. “That told us to merchandise to them in the catalog in different ways. And we created a miniature catalog, which we’re currently testing.”

In its test of the new 16-page miniature catalog (above) vs. its classic 52-page book, J&M discovered that retail recipients of the miniature book not only spent 2 percent more per book ($3.34) than those who received the classic book ($3.28), but more notably they spent $209 per 1,000 catalog pages, compared to just $63 spent per 1,000 pages among those who received the classic book.

J&M tested the two catalogs among direct buyers as well, and the results were less surprising. Recipients of the classic book spent $7.69 per book, compared to just $1.47 per book among recipients of the miniature book, and $148 per 1,000 catalog pages vs. $92 per 1,000 catalog pages among miniature book recipients.

3. Repurpose promotional materials. On the direct side, “make all your photography available to your retail stores for signage [creation],” Van Sickle said. “This way, your customer sees a consistent image through all your channels of communication.

“In addition,” she continued, “this kind of redundant production saves you money when you do it right.” The direct side can pass along photos from the print catalog and Web divisions to the retail unit, because “we’re usually two to three months ahead in our production schedule than our retail stores. So it’s easy for them to use our photography, signage and banners.”

4. Hold regular meetings. Retailers, catalogers and e-commerce executives need to personally communicate. J&M holds quarterly meetings among them to review results. Specifically, J&M looks at the following:

- catalog performance at retail,

- e-mail performance at retail,

- new-to-file rates,

- customer capture rates,

- seasonal test results and

- future test ideas.

At first, these meetings were long and painful, Van Sickle recalled, “because we had to explain our language and tactics. But now we hold these meetings regularly, and the retailers understand the direct channel.” As a result of the meetings, she said, J&M’s retail team not only now has ownership of the circulation strategy but is devising good, store-traffic-building ideas to implement in the catalog.

In these meetings, the relationships among J&M’s retail, catalog and Web executives has become healthier as each has been proactive in suggesting ways that the channels can coordinate their efforts. One idea, which was new for J&M at the time, was to be sure all photographs used in the catalogs and online are available to stores, and that prices and offers are consistent across all channels.

5. Create cross-functional roles. As for the actual relationships between direct marketers and retail marketers within an organization, Van Sickle said she views such differences as home-office tactics vs. retail-store tactics. She recommended that multichannel merchants integrate their organizational structures, and create cross-functional roles in merchandising, operations, circulation planning and marketing.

For example, the J&M marketing team is responsible for creating e-mail campaign designs, so they’re consistent with the company’s brand image. That said, however, the catalog/e-commerce department is responsible for actually deploying the e-mail campaigns. “This way we know they’re segmented and properly tracked,” said Van Sickle.

6. Devise cross-channel inventory planning. “We found there was a big disconnect of inventory in stores vs. catalog,” Van Sickle said. “For instance, we weren’t getting enough products for special store promotions. So we made the merchandising team responsible for both the catalog and the Web with one big inventory picture. As a result, our inventory turns improved, and we didn’t have redundant inventory. If something didn’t sell well at one channel, we simply shipped it off to another, which became a really efficient method.”

7. Create a centralized information source. During the past two years, J&M has reorganized its catalog contact center to become a central information source for all of the company’s stores as well. Retail customers can call the toll-free number to check inventory status of items they seek at a particular J&M location. “This forces our reps to interact with our retail stores on a daily basis,” Van Sickle said. “We’re forcing them to interact, and as a result, they have a better relationship.”

8. Get accurate customer data. Van Sickle recommended retail personnel be responsible for the integration and accuracy of customer data taken at the cash register. Specifically, she suggested that retailers address privacy concerns by creating scripts for store clerks.

She also recommended that you engage retail staffers in the quest for customer data by offering them, say, $1 per customer name or e-mail address they capture. Track your capture rates either by store or sales clerk.

9. Bridge the gap. You may have to work hard to get store personnel, in particular, to overcome the suspicion that the direct channel is taking business away from them.

“Retail personnel have different priorities,” Van Sickle said. “They’re concerned with hiring and firing staff, inventory control and shrinkage. For the direct division, the integration and accuracy of customer data is our most important asset. But in the stores, it’s often [lacking]. Sales associates’ priorities are to ring up sales and get customers out of the stores — not necessarily to capture customer data that they need to help them.”

Not all channel integration involves getting the retail side to buy into direct tactics. For instance, on J&M’s Web site, customers can access drop-down menus, fill in a ZIP code or state, and click on a button to find local store availability of products. “This literally has been the single-most important relationship builder we’ve had with stores,” Van Sickle said, “because store managers get calls every day from customers. With this feature on our Web site, stores literally can have the shoes ready for customers when they come into the stores.”

Smart techniques such as these can enable you to serve your multichannel customers well and at the same time, improve your bottom-line results.

Paul Miller is a writer and editor specializing in all areas of catalog/direct marketing and e-commerce. He can be reached at p914m@aol.com.