A Microcosm of the Multichannel Experience in Manhattan's SoHo
However, simply opening retail locations doesn't a multichannel merchant make. DMers need to promote their multichannel abilities on the Web, in their catalogs and inside their stores.
Unfortunately, in Manhattan's SoHo neighborhood -- one of New York City's trendiest and largest shopping districts -- many catalogers with stores in the area fail to highlight their multichannel offerings or do so in such a piecemeal way that it doesn't suggest a cohesive in-store strategy.
Of 16 apparel, specialty and home furnishings stores visited between August and late September, nine of them either don't offer a catalog in the store or were out of catalogs at the time of the visit. And only three -- Sephora, J. Crew and Crate & Barrel -- promoted their brand's Web site in any meaningful way. In fact, industry experts who reviewed notes taken during the visits expressed disappointment at how little these merchants were doing to showcase the multichannel experience.
"The catalogers doing a really good job [promoting their multichannel benefits] are few and far between," said Bill LaPierre, vice president of catalog brokerage at Millard Group, Peterborough, NH.
"Not one of [the stores reviewed here] is presenting a truly integrated multichannel organization. It's all hit or miss," said Debra Ellis, president of direct marketing consultancy Wilson & Ellis Consulting, Barnardsville, NC.
The stores visited were: Ann Taylor Loft, Anthropologie, Bliss, Bloomingdale's, Crate & Barrel, Eddie Bauer, EMS, J. Crew, Patagonia, Pottery Barn, Room & Board, Sephora, Smith & Hawken, Staples, Sur La Table and Victoria's Secret.
There were exceptions to the poor showing. The Eddie Bauer store on Broadway near Prince Street had a telephone kiosk stocked with recent issues of the catalog, a phone for placing orders and signs underscoring the wider product selection available via the catalog. To entice use, a sign above the kiosk informed shoppers that they can get free shipping and handling when they order from the in-store phone. Also, postcards at checkout offered $20 off a next purchase to shoppers who signed up for e-mail.
LaPierre said he was pleased with Pottery Barn's well-stocked catalog rack at the front entrance of its Broadway and Houston Street store. The rack held the brand's many different titles. Also on the mark was a simple sign-up card near the cash register for customers who wish to receive the catalog and/or e-mails.
Farther south on Broadway, Staples was the only location visited to have an in-store Internet kiosk. Kiosks "are probably the most underutilized [multichannel strategy]," Ellis said. When they are present, they should be promoted throughout the store, she added, something Staples didn't do.
However, kiosks are a good idea only if the staff knows how to use them and deliver shoppers to them when an item is unavailable in the store, LaPierre said.
"I have had a number of experiences where store personnel has said, 'You can order from the kiosk if you want to, but I don't know how to do it,' " he said.
"I was amazed at how many stores didn't have catalogs," said Lilliane LeBel, vice president of Decision Direct Research, Millard Group's research division. Picking up a catalog in a store is just like getting one in the mail. "It will prompt shoppers to go to the Web site or bring them back to the store." This strategy is especially important because 50 percent to 60 percent of Americans don't shop from catalogs.
Ellis, on the other hand, isn't so sure of the need to offer catalogs in stores.
"A lot of folks operate on the premise that [consumers] came into the store so they're a viable prospect," she said. "Still, catalogs cost around 50 cents apiece, so you have to look at the return on them."
Many companies reviewed here are losing a chance to promote their Web sites, LeBel said. This is especially important given that while catalogs, the Internet and a retail store all work synergistically to drive overall sales for a brand, catalog and retail sales on average are being lost to the Internet, according to Decision Direct Research's post-holiday spending survey of online/catalog buyers.
The amount of respondents' holiday spending in the Internet channel grew from 43 percent in December 2002 to 47 percent in December 2004. Spending in the period decreased from 19 percent to 18 percent via catalogs, and it fell from 38 percent to 35 percent for retail stores.
Patagonia's Wooster Street store limited promotion of its Web site to printing Patagonia.com on the front door.
"This is typical of what a lot of retailers do, and what I call weak branding," LaPierre said, adding that retailers think they can slap ".com" at the end of everything and consumers will recognize what they should do.
Sephora and J. Crew, on the other hand, had large signs explaining the benefits of shopping online while Crate & Barrel had signs overhead at every cash register directing shoppers to its Web site.
Smith & Hawken was the only store that promoted a loyalty program, with a brochure explaining the benefits available near the cash register in its West Broadway store.
"By promoting a loyalty program, you're building that bond by letting shoppers know they are important," LeBel said, who noted that she was surprised more stores weren't doing this.
One reason many stores don't promote a brand's multichannel capabilities is that the individual store managers don't always understand the significance of a multichannel strategy, LaPierre said. This can be an operational issue with the performance of individual stores based on how much sales they bring in, so managers don't see the benefit of promoting other channels. To overcome the problem, DMers may need a new business model, Ellis said.
"If the store matrix is the only measure of the location's success, then the managers will continue to be reluctant to offer access to other channels," she said. "[However,] if you can make all of those channels work together, you have a branding machine that just won't quit. If you're doing it haphazardly, you're actually undermining your existing business."
Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters