Holiday Results Start With a Strong Back End

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Retailers are gearing up for record sales through the Web this holiday season, but success or failure for retailers and direct marketers will be determined not only by sales activity but by what occurs after the click of the "buy" button. Therefore, now is the time when these businesses must look at their order management and fulfillment systems - the engines that drive direct commerce - and ask themselves, "Can I keep my customers coming back?"


Online retailers brought in $3.5 billion in revenue during the 1998 holiday season, exceeding all expectations. However, with that surge in sales came a sharp increase in consumer complaints about customer service. Jupiter Communications, New York, reported that 14 percent of online shoppers said their frustration with the online buying experience will prevent them from going back to those sites.


Why were they dissatisfied? Because too many companies focused purely on putting up flashy Web storefronts without building robust order-management and fulfillment infrastructures to ensure that all customer channels - Web, phone, fax, mail and kiosk - were integrated. Only by building a seamless connection between all of these channels can you serve the customer any time and any way they choose.


Forrester Research, Cambridge, MA, predicts that online retailers will bring in $18.1 billion this year. But while the Web is clearly the focal point for many retailers and direct marketers, it is important to realize the Internet is one of many commerce channels. Treating it as a new and separate entity can lead to costly customer dissatisfaction because of late or missed shipments, poor inventory management, incorrect billing or lack of automated, timely order information accessible to customer service representatives.


While the flashy Web storefronts of some companies attracted many shoppers last year, little did these consumers know that sometimes their orders were being manually printed, gathered in an in box and keyed into a legacy order-management and fulfillment system. Then, a week after their orders were supposed to arrive, shoppers learned the item was on back order.


No matter how well-designed the site, repeat customers will be few and far between without billing, order management, fulfillment and inventory communicating with each other behind the scenes.


Let's look at how this should work: Kelly places an order on the Web for a red blouse to give to a friend. An hour later, she realizes her friend already has a red blouse, so she decides to get it in green instead. The catch is, Kelly can't go online to change her order. It's three days before Christmas, so she needs to make sure the blouse goes out today. She grabs the catalog and calls the retailer.


As the call center representative receives the call, Kelly's complete order history appears on the screen, giving the representative all the details with no delay. Kelly explains her predicament and asks to switch the color to green. The inventory system shows green is out of stock, so the representative recommends a navy blue, as well as the option to purchase a silk scarf to match at a 10 percent discount. Kelly puts down her phone a happy customer.


Those companies that look beyond "the cool storefront" and focus on providing a robust, satisfying online shopping experience will define success. A litany of skills and mechanisms are necessary for serving the e-customer: real-time inventory access, instant access to order status, personalized upsells and the list goes on. Ignoring the underlying infrastructure is the surest step to the holiday blues. Here are a few key strategies to keep in mind:


• Think about the bigger picture. Although e-commerce has introduced a new paradigm in direct commerce, view it as just another channel from an order-management and fulfillment perspective, and extend the same levels of service as in traditional channels.


• Expose functionality to the Web. Bring existing capabilities in pricing, promotion, inventory management, upsell, cross-sell and affinity to the e-commerce channel.


• Bring customer service to the Web. Remember that customers online expect the same or increased customer service on the Web or they will go elsewhere.


• Think inside and out, front and back. E-commerce merchants have focused almost exclusively on front-end Web-site development without preparing properly for the e-customer's arrival. Order management and fulfillment are of equal or greater importance in terms of customer retention and satisfaction.


For retailers and direct marketers selling over the Web, the time has come to ask whether you have the systems in place and the know-how to provide a seamless customer experience.


Donny Askin is founder and senior vice president of CommercialWare Inc., Framingham, MA. His e-mail address is daskin@commercialware.com.
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