Multichannel Merchandising Is the Status Quo
As part of a broad partnership with the Direct Marketing Association, the e-tailing group developed proprietary research in merchandising and customer service. Our Merchandising Scan looks at 10 tool sets and more than 100 features that trace the evolution of merchandising online.
Additionally, as part of the inaugural The DMA/the e-tailing group Merchant Survey, we received more than 200 answers from catalogers and retailers reflecting their thoughts on e-commerce, site design, organizational structure and the value of 25 features to their business.
It is the customer who pushes the merchant, so I will start with what multichannel means for the consumer. Once we understand the customer, we will look at what it means to the merchant.
For the consumer, multichannel means greater choice, trusted brands accessible across channels, conveniences for pickup and return, research online, buying in-store, researching and finding efficiency, time savings, freedom to migrate across channels and round-the-clock shopping 365 days a year.
For merchants, multichannel means learning to deliver consistent experiences across all channels, selling more product to more people, excelling in unique channel disciplines that are not necessarily core strengths of the business, integrating systems that can be time consuming and taxing on the bottom line, greater customer reach, multiple ways to satisfy shoppers, drawing upon the strengths of each channel and round-the-clock shopping 365 days a year.
Multichannel and cross-channel functionality requires tools that drive shoppers from one channel to another and provide shopper conveniences that facilitate cross-channel shopping.
The strong presence of multichannel players results in continued and innovative use of features that drive traffic to offline channels to maximize total brand investments. With browsing offline playing a pivotal role in shoppers saving time and making their selections before ordering online, these cross-channel techniques can only help to direct their purchases based on shopper choice. Leveraging of catalog visibility not only reminds the shopper to visit the site but smoothly transitions newbies to test e-commerce for the first time.
One of the most powerful search tools catalogers have come to rely on is the QuickShop feature. It lets shoppers enter a SKU from a catalog and immediately be linked to that product or have that product added to their shopping cart.
As the Web proves still to be a bit browser-challenged, offline the shopper can peruse her favorite catalogs and quickly use the Web as an electronic order blank.
The industry reports that one-quarter of all Internet customers browse a catalog before buying online. They can confirm facts about a product at this time, but mostly this is an efficiency model for shoppers who wish to bypass the traditional call center. Some catalogers promote this feature throughout their catalog. Lands' End reports that just under half of their orders come via this means.
The DMA/the e-tailing group fourth-quarter 2001 study confirms the presence online of QuickShop, QuickSearch and QuickOrder functionality, as 89 percent of the 100 catalogers surveyed incorporated it on their sites. It has become standard for catalogers online and a tool demanded by shoppers.
From cost savings alone, this feature could defer some of the initial Web investments. We found in our survey that it was given the highest marks in terms of merchant value. Merchant commentary included being surprised at "how quickly customers migrated from our catalog business once we went up online."
Norm Thompson, which entered the online arena in 1998, said that given the demographics of its user skewing slightly older, it has found that QuickOrder is an excellent segue as many shoppers are still getting used to the Web. Once they complete their first purchases, they can begin to take a greater stake in e-commerce shopping. Today, more than 50 percent of Norm Thompson's orders are taken this way, and the company has found that while catalogs still drive 90 percent of their sales, e-mail marketing is making inroads.
The Web also can provide a wealth of new prospecting potential for merchants. This can be seen by an almost universal use of the catalog request feature, which has 95 percent penetration among catalogers.
In the same way that retailers made available their store locators, catalogers took advantage of the medium in the early years to test its prospecting prowess. Some merchants follow traditional models that request names of friends who also might like to receive a copy of their catalog.
To tap into the Web's viral powers, it is critical to understand and measure the performance of these Internet-generated names, ensuring their quality and performance as shoppers rather than voyeurs.
Undoubtedly the quality of names affects a merchant's choice to highlight or bury this feature or require payment with credit back on the customer's first order as Spiegel does. This fee I understand from a number of former clients keeps the quality of prospects strong. One cataloger noted that catalog requests are its No. 1 source of new names, which is crucial when the universe of new names is not expanding as it once was.
For many of us who sort and discard our catalogs knowing that another one soon will reach our mailbox, browse and shop by catalog can be a valuable tool. We may have a delayed desire for a product, and can use the Web to research and find a product, even if we no longer have the catalog.
Such a visual adaptation of the catalog is seen at Babystyle, which lets browsers quickly find a page or spread of interest. The target customer is an upscale mother or mother-to-be, and she enjoys convenience. The company understands its audience, as Babystyle is the first to brand baby and maternity into a lifestyle brand delivering "convenience for the career mom."
Company president/chief operating officer Tom Parks says the company tries to present catalog options frequently online. The goal is to convert catalog browsers into online shoppers.
"Offers for free shipping and a $10-off coupon good for those that shop online helps push 80 percent of the catalog shoppers online," Parks said.
By spring 2001, the 52-page catalog mailed to 750,000 people saw an increase in average order size from $100 to $130. Babystyle finds many customers use QuickOrder, and e-mail works to remind mothers about catalog drops and cost-savings coupons received via e-mail.
Tracking performance of promotions will be imperative to qualifying success and allocation of future marketing dollars. Today, 58 percent of merchants allow shoppers to note the promotion code they are using to receive a specific discount. We also have noted an increased frequency of catalog source codes (18 percent of the 57 catalogers surveyed), which underscores the value of direct mail in driving traffic online. Use of this feature is in its infancy and thus only tracked in the latest survey. We expect to see gains as 2002 progresses.
A cataloger's site gives customers the ultimate choice in how they can shop their site. We can expect more innovative use of these and other cataloger multi/cross-channel features as catalogers optimize their existing investment in their print vehicle that has served them so effectively to drive traffic online for showcasing, researching and selling online.