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Philosophy’s doctrine on multichannel retail

Philosophy may be a niche beauty brand, but soon the company’s multichannel capabilities will place it in the same league as some of today’s most sophisticated retailers.

At press time, Philosophy Cosmetics Inc. was scheduled to launch a new Web site last week employing Web 2.0 capabilities from IBM’s new WebSphere e-commerce solution. Later this year, the company will integrate its call center and one corporate-owned bricks-and-mortar store in Chandler, AZ, into a cross-channel platform employing technology from IBM and Coremetrics. As a result, Philosophy hopes to drive cross-selling opportunities, improve customer service and send more targeted e-mail.

“We realized a long time ago that nobody can sell Philosophy the way that we can,” said Devon Montoya, Webmaster at Philosophy, Phoenix. “We want to provide customer service and a retail solution that is commensurate in quality with the product we sell.”

Philosophy has worked independently with IBM and Coremetrics for several years. So, when the two vendors announced that they were joining forces around the same time that the upscale beauty marketer had started thinking about updating its Web site, the timing couldn’t have better. As a result, Philosophy has been able to work closely with both companies as it developed a new e-commerce site. At launch, Philosophy will be one of the few online retailers employing the full WebSphere Commerce 2.0 Store solution from IBM.

The new site aims to be similar to real retail shopping. Mr. Montoya said traditional Web pages are very serialized, as browsers move from one page to the next. By employing Web 2.0 technology, visitors to the new site will now be able to rotate through products on the same page. Philosophy hopes to use this technology to help drive cross-sells. Analytics from Coremetrics will aid this feature, as well.

While scrolling through product, customers can hover over something they like to get a sneak peek or drag and drop it directly to the shopping cart. In fact, the shopping cart will be displayed on every page.

“This is going to keep people focused on the shopping experience,” Mr. Montoya said.

Philosophy will also be replacing its current customer service system, which uses different technology to support its site and call center, with WebSphere’s solution.

Currently, if a customer contacts the call center and asks about an online promotion, for example, an agent has to check two different databases to verify the details of that promotion and to make sure that customer hasn’t already redeemed it, if it’s set up to be redeemable only once.

With WebSphere Sales Center, Philosophy will be able to create a promotion, apply it across channels and, when a customer contacts the call center, the promotion will automatically pop up on the screen in front of the agent if the customer qualifies. Philosophy will also be able to collect data that will show total sales across channels and sales broken out by channel. The solution will eventually be integrated with Philosophy’s retail store.

Philosophy also hopes to use the combination of IBM and Coremetrics technology to create e-mails that will complete the sale without being too intrusive, Mr. Montoya said.

The e-mail solution enables retailers to create e-mails by choosing a template and adding images or links in WebSphere and all the while, Coremetrics is automatically appending tracking, so that when the e-mail goes out, all activity related to that e-mail is recorded. In addition, retailers can go into Coremetrics to create a segment and import that information into WebSphere to create an e-mail.

For example, a retailer can define a segment based on all the customers who have abandoned a particular product, put an image of the item in the e-mail and send a message to those customers.

Philosophy also has several direct sales sites. A major one is www.philosophygirl.com.

These sites run on a different platform, but the goal is to incorporate them as an extended site under the new WebSphere platform. This will allow the beauty brand to create a uniform online customer base, offer a single sign-on and a single-stop loyalty and rewards program.

So what does Philosophy expect will happen as a result of these changes?

“We enjoy a conversion rate and shopping cart abandonment rate that is far better than the average,” Mr. Montoya said. “What we’re really hoping to pull off is that we decrease those [abandonment] numbers. [Our ideal site] compels customers to complete the sale.”

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