Channel integration tastes sweet to Ghirardelli

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There's lots of talk about the need for retailers to integrate customer channels in order to improve the shopping experience and achieve operating efficiencies, but few companies have done it yet.

This fall, multichannel merchant Ghirardelli Chocolate Co. blazed the trail and integrated its catalog, 10-store retail and e-commerce channels for the first time using a Web-based system from CORESense. Previously, the company outsourced its e-commerce solution and managed the catalog and telephone businesses through various systems that had been cobbled together in-house.

"We were looking to realize savings on fulfillment and marketing costs by combining the different channels into one business unit," said Jason Zdanowicz, Ghirardelli's business development manager for restaurant and retail. The company also wanted better control of its e-commerce business as it has matured to where it warrants more attention.

Many multichannel merchants haven't integrated because they've invested a lot of time and money in their legacy systems and are reluctant to start over from scratch, or some top executives still aren't convinced of the merits of direct retailing. However, the benefits that Ghirardelli realized are significant.

Ghirardelli, San Leandro, CA, is using CORESense for its centralized product catalog, order fulfillment, inventory management and customer relationship management functionality. Orders that come through the Web site, telephone or catalog are processed the same way. This lets Ghirardelli easily track which products are selling, move inventory between its company-owned stores and online, track what products were purchased by which customers and when and have centralized fulfillment and customer service operations.

Ghirardelli didn't commit to CORESense until last summer, so both companies worked hard to get the retailer operating in time to realize some benefits for the holiday season. Ghirardelli went live with CORESense, Saratoga Springs, NY, the second week of November.

One highly visible change is the customer service experience. There is now one system where all of a customer's information is available, regardless of what channel an order has been placed in. Also, customers now can go online and track orders themselves.

The integration "allowed us to concentrate our efforts where we could have one dedicated customer service staff for all channels," Mr. Zdanowicz said. When customers are speaking with a customer service representative, that person is knowledgeable about the merchandise and that customer's history.

Though customers made little use of the online order tracking during the holidays, Mr. Zdanowicz said he expects use to pick up as Ghirardelli has time to convey all the new features it can offer.

The biggest cost savings so far has been centralizing the fulfillment needs of its catalog, telephone and Web businesses, which previously were in four locations.

Bringing the Web business in-house let Ghirardelli make it more dynamic. The company previously was locked into merchandising forecasts for the entire season. This year, however, it could put more emphasis on a specific item that was performing well or make changes to an item that wasn't doing well.

For example, Ghirardelli realized that the fastest-moving gift baskets of those it was offering online during the holidays were at the higher price points. So the company quickly put together a $149.95 gift basket - the highest-priced basket had been $99.95 at the start of the season - and got it on the Web site two weeks before Christmas.

"During those two weeks, it was one of our best-selling baskets, and we would have lost that opportunity in the past," Mr. Zdanowicz said.

The company also discovered that its business clients found a free-shipping promotion attractive, so Ghirardelli was able to extend the promotion for a longer time.

The combination of all these adjustments in Ghirardelli's holiday marketing let the company realize a full return on investment with respect to the cost of the CORESense system before the end of the year.

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