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Published in the February 2008 DMNews Essential Guide to Multi-channel Retail

Most retail executives know that shoppers online and off use multiple pathways to find their desired products or services and that this multi-channel consumer is loyal and spends more, more frequently. So why has multi-channel integration remained elusive for most retailers? Is it really that difficult to plan the groundwork for multi-channel implementation? Organizational dynamics are usually the first barrier to success. The lack of a shared stake in the success of the business leads to separate goals for each channel that are tied directly to an immediate ROI. Growth often takes a backseat because it is expensive with a delayed return. In fact, it is not uncommon to see the portion of the marketing budget allocated for growth dismissed and reallocated to fund existing channels, erroneously expecting the same rate of return. So what exactly is breaking the ties that bind?

• The C-level is uncomfortable with the investment because they are overlooking the intangible factors that growth in a new channel presents.
• They want cross-channel data analysis; without it, they are less likely to spend more now for the sake of future growth.
• They want the ability to interact with data supporting their investment, especially in the online space, before they can take a more customer-centric view of profit and loss.
• A disconnect exists between management and staff on how goals should be set and the allocation of budgets/ resources.

Retailers are also plagued by increasing demands on personnel coupled with scarce staffing and technology resources. Senior management may recognize the importance of a successful ecommerce business, but may not understand how that channel compares to more traditional sales channels. Consequently…

• Those executing the day-to-day operations of the business are placed under heavy scrutiny and are often pressured to squeeze as much out of marketing budgets as possible.
• Their duties and responsibilities become reactive and the goal of growth through finding the multi-channel customers and effectively communicating with them is lost.

More often than not, mid-managers recognize the need for a seismic shift, but lack the senior-level management support to be maximally effective. Establishing open communication channels throughout the organization will add the necessary voices to the decision-making process. Some other things to consider:

• Leadership: Essential in helping set internal priorities throughout the company
• Proactive Communication: Mid-management and staff need to push, upstream, productive feedback and potential scenarios with expected outcomes, when faced with challenges.
• Collaboration: Senior management must work with those managing the day-to-day business to create a strategic plan for multi-channel implementation and sustained growth.
• Personnel Management: Clearly defined roles and expectations matching understood goals are a vital foundation for success.

The more traditional methods of marketing need to be eschewed in this dynamic commerce landscape. It’s all about instant gratification; the customer wants what they are looking for now.

• Consumers no longer lack shopping options and if you do not engage them as they move through each channel, you risk losing them.
• The paradigm has shifted; consumers are engaging in longer-term relationships and maintaining greater control over their online experiences.
• Retailers need to embrace technology, and the necessary costs, not only to integrate data and make informed decisions, but to also reach their customers.

People are consuming media at an ever-increasing volume and frequency and they expect you to find them, or make it very easy for them to find you, and satisfy their needs. If you create an integrated experience, your customer seamlessly moves through each channel without any barriers to arriving at the ultimate goal; the sale. Embracing this new dynamic requires an unprecedented level of leadership and collaboration among varying areas of operation, across the enterprise, from merchandising to marketing, IT, sales, finance and so forth. Clearly this is not something that can evolve overnight, but it starts with a focused commitment from senior management combined with a communicated, shared vision and effective planning across the organization.