Live from Shop.org: Creating Multichannel, Not Multiple Channel, Retailers

Oct 08, 2004 1:02 AM  By

Anaheim, CA–According to Monica Luechtefeld, executive vice president of Office Depot, catalogers and retailers both need to be multichannel, not multiple channel. The difference? Multiple channel refers to using more than one channel to reach customers but with little to no relationship between them, while multichannel is the same except for a marriage of information about customers and their habits that creates a more targeted marketing approach.

In her keynote address at Shop.org’s Annual Summit, Luechtefeld noted multiple trends in customer composition, product branding, retail store use, and marketing that catalogers and retailers alike must recognize in order to create a truly multichannel purchasing experience. Among customer demographic trends are a shift from large corporations to small businesses and entrepreneurs, a majority population with a number of minorities to a plurality of minorities, and a value shift from Baby Boomers to the Millennium generation. Luechtefeld emphasized that Internet retailers can no longer offer customers only what they need, but must also offer attractive ways to learn about and purchase those products.

For Office Depot, that meant providing in-store pick up of purchases placed online or free shipping if items in the order were not in stock at the store. It also meant providing printable coupons online and installing informational kiosks inside its stores. Luechtefeld noted how online retailers can take a lesson from airlines that direct passengers to check into flights through self-service kiosks.

While turning a company multichannel may seem like the perfect solution to higher revenue and greater brand-awareness, Luechtefeld cautioned Shop.org attendees about three challenges of going multichannel: the importance of a unified brand message, finding the optimal level of channel integration, and determining pricing differences between channels.

“The key to growth is customer engagement across channels,” said Luechtefeld, before cautioning attendees about plunging head-first into an effort to revamp business models from multiple channel to multichannel. First, is it a financially viable alternative? Second, how many of your current channels touch the same customer yet do not marry the effort? And third, will you have support from the top management?