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American Express Sees Customer Shift to Web

NEW YORK — The Internet found a champion at the archly traditional National Retail Federation's 92nd Annual Convention & Expo in New York: Kenneth I. Chenault, chairman/CEO of American Express Co.

Speaking at an industry luncheon to honor outstanding executives for their contribution to retail, the keynote speaker emphasized the importance of the online channel to a packed hall of attendees.

“I believe not to walk away from the Internet,” Chenault said.

He was addressing executives assembled to honor Jeffrey Seaman, president/CEO of furniture retailer Rooms-to-Go, as retail innovator of the year; Dr. Hans-Joachim Korber, CEO of German-run grocery chain Metro AG, as international retailer of the year; and M. Farooq Kathwari, recipient of the prestigious Gold Medal Award.

American Express has found much of its business transformed by the Internet. Increasingly, address changes for its card, travel or loyalty services are made online at americanexpress.com. Card payments are also migrating online, as are travel-related dealings.

“At our company, we have now reached a point where we have more interaction with our customers on the Internet than face-to-face or over the phone,” Chenault said.

This does not mean retailers and marketers should abandon their old channels, especially in an environment changed by technology.

In a display of its flexibility, American Express is using call center talent to cross-sell more products. Inbound calls are now seen as sales opportunities for an array of American Express products and services like card services, air flight insurance and in-flight programs. This adaptation yielded estimated revenue of $150 million last year.

“It's a nice added benefit to a fixed infrastructure,” Chenault said.

The company is also making better use of its telemarketing. For example, Japanese customers calling in are answered out of call centers in Australia, Europe out of Madrid and U.S. customers out of India.

Technology also allows focus on core competency. Previously, American Express controlled every aspect of the transaction. It now farms out work that does not reflect its competitive strengths.

For example, it handed over data processing to IBM Corp.

The company also partners with The Home Depot Inc., Staples Inc. and Crate & Barrel.

“The right partners stacked against the right opportunities can add significant advantages to your cost structure,” Chenault said.

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