Look beyond a consistent experience

As luck would have it, Forrester Research just released a study in which 32% of retail business executives responsible for e-commerce and/or channel strategy say their company lacks a vision for providing consumers a consistent multichannel experience. There are at least two immediate observations on this point.

First, is it really a critical element to a multi-channel strategy that there by consistent consumer experiences? As brand touchpoints, there do, of course, need to be consistent delivery of brand messages and branding visuals. However, that's a bit obvious. What is less obvious is the assumption that the actual experience of the consumer should be consistent. Why? Is it really necessary, possible or desirable for consumers at Walmart.com to have the same experience as shoppers at Walmart stores? OK, so that's a bit tongue in cheek. The Forrester study isn't really about mimicking the physical attributes, but rather delivering on those aspects of the brand premise which can be consistent across channels.

So after abandoning humor, I'm still left with: is it really a critical element? Isn't it possible that the makeup of the shopper universe differs between channels? That the experience expectations are different, and that the shopping behavioral mindset alters between channels? I think it does. So given that SOME degree of consistently of experience is essential to reinforcing brand attributes, the next question is which ones? And I have an all-to-familiar feeling that this question isn't being asked. Rather, the focus continues to be on transactional or surface level "experience" consistency. Look beyond, to what is really important, really practical, and really relevant to both the channel and to the synergy which is the inherent business purpose behind consistency.

Where has all the innovation gone?

This is not a stagnant era with regard to advances in technology, sciences, and other related areas. The internet continues to change on an almost daily basis, and how we communicate seems to evolve almost as fast. So where are the real innovations in retail? And why aren't we seeing any? Is the entire industry so mature that any form of innovation, continuous or otherwise, simply isn't probable? Or is there something culturally limiting within the industry that keeps innovation from being adopted?

As a retailer, a senior marketer selling products to retailers, and as an entrepreneur selling services to retailers, the most common question I can recall when something "new" is in question is "who have you sold this to?". And in the past decades, the world of retail contained sufficient pioneering smaller companies that new things could get bootstrapped up to the attention of the big players....often simply because the product or service WASN'T being sold or used by one of the big boys. So adoption of innovation followed a chartable path, generally beginning with small, niched or accounts needing to/able to take more risks. If the product or service performed, and performed well enough to catch the attention of someone in the big leagues, one of the major players could usually be induced to try it. From there, the public got to vote.

Today, that chartable path doesn't really exist. Yes, there are a few pioneer type retailers, but by and large, the "sell it into specialty and then broaden distribution" strategy isn't viable. Which means that innovation is becoming an endangered species in the merchandise mix. Sad, but understandable. What about the rest of the organization? Why isn't there innovation there?

What new marketing methods have been developed by retailers? Wouldn't you think they'd be prime and fertile grounds for new ways to communicate with consumers? After all, communicating with consumers is the sole objective of retail marketing. Adoption of social networking...yes....but is any of it innovative?

I think one of the critical questions to ask of any organization isn't "why aren't you producing innovations" but rather "what have you done to intentionally create and sustain innovation". Really.... if you can't articulate a specific and measurable approach to stimulating, nurturing and incorporating innovation....then you don't have one. And if you are not innovating, you are following. Followers reap lower returns, fight over scraps, and generally lead dull and limited brand lives.

Multichannel Synergy

What exactly does this term mean? Multichannel synergy. Using the dictionary, it would appear to mean the behavior of different channels of retail distribution acting in concert to produce a result different than if they were managed independently. So where, exactly, is this happening today?

Too often this phrase is used to describe such tactics as making store inventories visible online, or ship-to-store, buy online and pick up in store, using the website to make local store promotions visible....etc. Are these things really causing a unique outcome different than if the channels were acting independently? Not really.

In the end, it appears that multichannel synergy has become jargon for marketing techniques that use one channel to stimulate sales in another channel. How is this synergistic? Smart marketing....absolutely. If you have millions of monthly unique visitors to your website, it is a good idea to try to influence those people to shop your brick and mortar locations as well. Or at least to facilitate any latent or activated intention which exists regarding your brand. Similarly if you have millions of monthly footsteps moving through your brick and mortar chain, it makes sense to try to stimulate awareness of your online channel (although not quite as much sense as the reverse). But are these efforts truly synergistic?

What would multichannel synergistic behavior look like in the retail world? What if you could visit a retail website, and download/print the forms (postage prepaid) to return something you bought in a store? Certainly the online channel would not act in this way independently, and certainly customer service, and by extension brand appreciation would be enhanced. Alternatively, what if you could return an online purchase in any brick and mortar location? ALl you had to do was bring the item in, know your name, and the POS system would look you up, verify that you had bought it, and refund your money. Right there. In that amount of time. Certainly taking back unsellable returns from the online channel is NOT a way that the brick and mortar store would act independently....it takes time and effort with limited personnel resources to then actually send the product back somewhere....time and effort without immediate benefit to that channel.

So ask yourself: are you actually producing multichannel synergy? Or just being smart marketers.

Operational Exellence

The consumer shopping mood this holiday is unlikely to be festive. With unemployment at levels never seen by most families, credit card costs continuing to soar, and wages frozen, despite the upbeat indications for an economic recovery, most consumers simply are not feeling it yet.

While not as dire as last year, and with the entire year to potentially save or manage cash to make holiday gift giving more feasible, the outlook cannot be overly optimistic. Retail stores may post flat or even marginal comp store gains, but remember, those are measured against the deepest drop in retail sales in recent history. Dropping even further from those depths would be a very bad sign indeed.

Given this highly pessimistic view of the shopping climate, the focus this year should be on operational performance. Or, make the shopping experience as painless, fulfilling, easy and quick as possible. Spending less than you would like to, at places you might not usually shop, isn't going to be "fun" no matter what the retailer does. However: it CAN be a positive experience. The consumer isn't interested in "fun". They are interested in efficiency. This is not going to be a "fun" holiday season. It won't be as dismal as last year, but there is a very long leap from "dismal" to "fun". And we're not there yet.

What is operational exellence? Clean floors, easily shopped race tracks, racks straightened and made attractive. Customer service personnel (what few of them you can afford) focused on helping the consumer through the experience, NOT on selling them something they don't really want. This starts with store management, and has to be reinforced and provided with oversight. Turn this holiday season into the season where you made a difference. Courtesy, attention to detail, commitment to service and efficiency will be deeply valued......and in the long run, rewarded by the consumer through brand preference.

It's too late to alter the merchandise mix (although it is unfortunately never too late to alter the promotional posture), change the seasonal advertising, or significantly impact price ladders. What it is NOT too late for is to galvanize in-store execution. Send your merchants back out into the stores. They aren't doing you much good peering over reports which aren't critical right now anyway. Get your store personnel focused and motivated. It doesn't take a ton money. Just effort and management attention.

Cautious Optimism

The most critical component to managing through the slow and still unproven economic recovery is to provide the possibility for growth while maintaining a risk adverse posture in gross margin. Not even easy to write, let alone to accomplish. Essentially, and fundamentally, it involves planning inventory utilization near but not beyond historical peak efficiency, and certainly at but not above current or recent results.

Provide your merchants with the assets to perform, while helping them to manage against the natural tendency to aggressively pursue opportunities. It has been over a year for most merchants of constant and unremittingly difficult if not outright negative comp sales performances. Any silver lining, however slight, any break in the dark clouds of bleak results is absolutely going to awaken tendencies to be aggressive. And...that's a good thing! Pessimistic, overly cautious, and careful merchants will NOT lead you into the recovery. Just as overly aggressive, incautious and optimistic merchants COULD lead you into further difficulty.

So this time period requires extraordinary cooperation and joint merchandising efforts between those who select product and those who help manage inventory and gross margin. It is far from as simple as it sounds, yet the basis for a successful approach lies in the ability of senior management to create a joint appreciation for the necessity of each part of the organization to be involved in the recovery. Merchants, as a general rule, no matter what they say, tend NOT to appreciate Planning or Financial types who seem bent on limiting possibilities and guarding against failure. Financial or Planning executives, no matter what they say, tend NOT to appreciate that inherent optimism is a requirement to be a successful merchant, as is a short memory with convenient wholes in it.

So work together....you'll need to....or the opportunities (which are going to be both discrete and small) will be missed, and instead of participating in a recovery, you'll be watching others steal market share, engage the consumer, and position themselves to be the big winners when employment begins to rebound next year.