An automated e-mail response costs about 25 cents per incident, compared to $1 for knowledge-based self-service, $6 for interactive voice response, $8 for online chat, and $10-$33 for a phone conversation with an agent

To navigate the labyrinth of e-commerce and escape from the hybrid consumer monster at the heart of the maze, online retailers must rely on the magic thread of technology. Dot-coms may be dwindling, but e-commerce is alive and well, and regardless of the channels you operate, catering to customers is still paramount to attracting and retaining business. Internet sales for the 2000 holiday shopping season topped $6 billion, a 60% increase from 1999, according to online commerce ratings firm BizRate. Forrester Research estimates that U.S. Internet commerce, both business and consumer, will grow from $864 billion this year to over $3 trillion in 2004.

‘Customers are proving to be very channel-schizophrenic. They may use the Web site to browse and then go off-line to fulfill. In fact, we’re seeing a strong preference for that.’
— Tim Hickernell, Meta Group

A report on channel surfing released last fall by the National Retail Federation found that multichannel shoppers are more valuable than people who buy from only one channel. Consumers who visit a Web site and then purchase from the same company’s brick-and-mortar store spend 33% more a year in-store than the typical in-store customer does. Similarly, shoppers who visit a Web site and then buy from the catalog spend 20% more a year on catalog purchases than the typical paper-based customer.

Behavioral therapy

Jupiter Media Metrix’s finding that only about 18% of retailers have technology that allows them to track customer transactions in more than one channel indicates that merchants with integrated channels now enjoy a competitive edge. Combining traditional and electronic channels is vital to survival, and creative use of technology often supplies the missing link.

For example, revenues at BabyUniverse.com have grown by 60 times over the past two years, while call center staff has expanded just 50%. Neil Closner, president and CEO of the online baby products store headquartered in Fort Lauderdale, FL, largely attributes his ability to hold down call center staff to implementation of AskIt, a self-service search technology from AskIt Systems. AskIt lets shoppers query the retailer’s knowledge database and get answers to questions without live help.

Since online bill management company Paytrust of Lawrenceville, NJ, started using Blue Pumpkin’s Director Enterprise 3.0 workforce management software in its call centers, it has seen agent morale rise and average caller hold time cut in half, from about 30 seconds to 15 seconds.

The Meta Group, an IT and business transformation consulting firm, surveyed companies about customer relationship management (CRM) solutions last year and found that consumers were using an average of three channels to complete a transaction. “Customers are proving to be very channel-schizophrenic,” says Tim Hickernell, Meta’s senior program director for Web and collaboration strategies service. “They may use the Web site to browse and then go off-line to fulfill. In fact, we’re seeing a strong preference for that. Integration among channels is a key issue that any direct-to-consumer retailer needs to get right.” Hickernell adds that channel integration “usually requires an upgrade to telephony equipment, such as investing in computer telephony integration (CTI), which is something that only about 20%-30% of Global 2000 corporations have really done at this point.”

Streaming tech

Sandpoint, ID-based women’s apparel company Coldwater Creek is ahead of the curve. It has integrated e-commerce, retail management, and warehouse management technologies to achieve a 360-degree view of customers in near real-time while providing a seamless experience for shoppers across catalog, Web, and brick-and-mortar channels.

Coldwater Creek uses Ecometry, an e-commerce package from Ecometry Corp., for its catalog and Web order processing system. Coldwater Creek’s brick-and-mortar stores employ retail management products from Applied Digital Solutions, including TradeWind, a point-of-sale application; TradeCenter, which creates a central repository for store data on the HP3000; and TradeRoute, a trickle polling process software that allows data exchange between stores and corporate systems in near real-time. Coldwater Creek has also integrated those systems with Manhattan Associates’ PkMS warehouse management system for pick, pack, and ship in its distribution centers.

The first time a customer does business with Coldwater Creek, information about that customer gets sent to all the company’s systems. “If you call the toll-free number and place a catalog order, you go into our system as a catalog customer,” says John Shaw, the company’s director of information services. “But then if you walk into one of our brick-and-mortar stores, we can pull up that information about you. And if you wanted to return an item you bought from the catalog, you could go down to one of our stores, they could bring your order up, and you could do the return right there. Or you could send the item back to the warehouse.”

Outdoor gear marketer Camping World plans to integrate its Web and catalog channels using a package from CommercialWare, retail.dot.commerce, or r.d.c. The program will enable Camping World to serve customers better, particularly higher-value shoppers who are members of the company’s President’s Club.

“Integration is absolutely key,” says Jane Browning, Camping World’s vice president of catalog, member services, and call centers. “We have approximately 600,000 President’s Club members, and about 30% of those people shop in our retail stores and catalog or Internet. Because they are multichannel buyers, the lifetime value of those customers is significant to Camping World, and we want to serve those people better. At the same time, we want to be able to leverage customer data to reduce our costs and increase acquisition and retention of all customers.”

Camping World’s Internet business was up 68% through April of this year, while call volume generated through the Internet rose 117%. Many of the inbound calls relate to order follow-up, and Browning anticipates that call volume will drop once r.d.c is up and running, because that kind of information will then be easily available over the Web. R.d.c will also set the stage for links with other technologies, including a brick-and-mortar module when Camping World finds one that meets its needs.

“There are companies like Sprint PCS that are adding personalization to channel integration, so when you browse for a phone or set of phones and a service plan, you can save that information through a profile and then pick it back up in a store and continue the experience,” notes Meta Group’s Hickernell. “Consumers are reacting very positively to these hybrid, go-to-market strategies.”

Do or die

Some technologies may not save a retailer money but may be necessary simply because customers expect a retailer to have them. Take e-mail, for instance.

“We find that most companies do not see call volumes decrease as a result of implementing an e-mail channel,” says Hickernell. “But the more convenient companies make it for customers to interact with them, the more customers want to interact with them. The bottom line is that retailers are going to have to learn to interact with customers over more channels than ever before leading to a single transaction.” But, he warns, that won’t necessarily reduce the overall interaction costs leading to that transaction.

“The basic issue, at a higher level, is understanding the value that different interaction channels may or may not have,” Hickernell says. “In the last year, for example, we’ve seen a lot of companies add Web-based chat to all portions of their Web site and, as a result, get a large increase in customers who wanted to chat without any real return. We recommend that chat’s real value is wherever transaction abandonment rates are high. A company can add a lot of value by having live interaction at those points where customers tend to get stuck.”

Forrester Research estimates the average cost of an automated e-mail response at 25 cents per incident, compared to $1 for knowledge-based self-service, $6 for interactive voice response, $8 for online chat, $3-$10 for an e-mail from an agent, and $10-$33 for a phone conversation with an agent.

Help yourself

Clearly, encouraging self-service is an effective way to control costs. Online shoppers are generally comfortable with technology and prefer to research and order products, check order status, and return or exchange an item without having to contact a live person for help.

Self-service technologies like AskIt and Ask Jeeves enable retailers to create knowledge databases, typically structured as frequently asked questions (FAQs) and responses, which online customers can search 24/7. With both AskIt and Ask Jeeves, customers type in a question, and the systems use natural language technology to find relevant responses. AskIt provides a list of similar questions and answers; Ask Jeeves points customers to pages on the retailer’s Web site that have relevant content. If a question can’t be matched to other questions in the database, the customer can submit the question in an e-mail, which is routed to the retailer. When the retailer responds to the customer, that question and response are automatically added to the database.

“The AskIt system helps tremendously in keeping call and e-mail volume down,” says BabyUniverse.com’s Closner. “That reduces the need for personnel on my end, it reduces the need for my personnel to have to answer the same questions repeatedly, and it gives customers a better experience because they get their answers right away. I would easily need to double or triple the size of my customer service department if it weren’t for AskIt.”

AskIt and Ask Jeeves also capture information that retailers use to improve customer service, increase efficiencies, and reduce costs. Office Depot, for example, launched its online store based on a sell-ship model. But questions from customers captured by Ask Jeeves revealed that customers wanted to be able to order online and then pick up the product themselves at the closest possible location.

“Office Depot changed its U.S. operations so that product information was very rich on its Web site,” says Dan Easterlin, director of product management for Ask Jeeves. “The Web site now includes inventories at all store locations so customers can get real-time responses about where certain laser jet printers or reams of paper might be. Customers loved that they could place the order online and then go pick it up at the shipping dock going into Office Depot stores. It drove a lot more deliveries to the shipping dock, which reduced costs on the front end.”

For Closner, knowing what questions get asked most frequently helps rectify customer service deficiencies. “For example, customers frequently had questions about when they could expect to receive their order,” he says. “We made a change on our site where we now list shipping time frames directly underneath the pictures of products. By doing that, we’ve basically eliminated that question.”

At first glance, FrogJazz Inc.’s FrogDial looks like a Web-based version of phone hell. But it is a self-service technology that can turn a retailer’s typical, static “Contact Us” page into what Jay Elshaug, director of marketing for Huntsville, AL-based FrogJazz, describes as “the most valuable piece of real estate a company can have” next to its home page.

The FrogDial “Contact Us” page includes a verbatim representation of the ubiquitous IVR system that consumers can easily click through to get the information they need instead of contacting the call center. But just in case, the page can also include all other contact information, from e-mail addresses and buttons for chat to instant messaging and more. Having human interaction on the “Contact Us” page, notes Elshaug, makes it easier for consumers to get immediate help, which should drive down the number of abandoned shopping carts.

NewRoads, a fulfillment services outsourcing company headquartered in Greenwich, CT, is currently rolling out Customer Concierge to help reduce routine order status queries into call centers. “Last year, we took about 10 million phone calls in all of our call centers combined,” says David Himes, senior vice president of technology solutions for NewRoads. “With individual orders, a lot of the calls fall into predictable patterns.” These include customers calling back after placing an order to find out when it’s going to ship, when it will arrive, and whether or not a gift has been delivered.

NewRoads has identified 14 points in the life of an order when that order’s status may change. Customer Concierge was created to notify consumers automatically of a change in their order’s status. Consumers can choose which changes they want to know about and whether they want to be notified by e-mail, phone, pager, fax, or some other medium. Himes believes that Customer Concierge can eliminate 30% to 50% of routine order status inquiries by phone and e-mail.


Hallmark Cards and Paytrust are among companies using workforce management software to achieve optimum coverage in their call centers. Solutions like Blue Pumpkin Software’s Blue Pumpkin Director Enterprise 3.0 and Maxima Advantage from Pipkins, Inc., track volume on multiple channels in and out of call centers and schedule agents based on anticipated volume.

Paytrust gets about 2,000 phone calls and 2,000 e-mails a day. “The Blue Pumpkin technology helps us determine where our busy points are in the day so we can manage better for that, while also giving us a forecasting tool,” says Jeff Podwats, Paytrust’s workforce management analyst. In addition to streamlining schedules, the Blue Pumpkin software has boosted CSRs’ morale, notes Podwats. “We don’t have a large number of calls on hold all the time, and they’re not faced with a one-after-another phone call situation. And when agents are happier and less stressed, that flows toward the customer in terms of their attitude.”

At Hallmark Cards, the customer solutions center takes about 4,000-5,000 phone calls a day from retailers and field personnel. The company uses Pipkins’s Maxima Advantage for scheduling and forecasting CSRs. “Maxima Advantage is really good at helping determine when lunches and breaks need to be, or when meetings and training should occur,” says Tracy Jones, scheduling specialist for the Hallmark center. “It knows the set shifts of our representatives and is able to look at all that on a weekly basis and determine how to manipulate their schedules slightly so we get the best coverage at all times.”

Because the system can determine the best times when CSRs can be off the phone for training, agents end up being trained more efficiently, notes Jones. And because the program can determine the best meeting times, meetings don’t have to be canceled after they’ve been set.

“When representatives know they’ll have some time doing things other than answering call after call, their morale goes up,” says Jones. “As a result, they provide better service. They listen to callers better and take more time on calls when they need to.”

Out of the maze

Technology may be necessary to survive online commerce, but killer apps notwithstanding, smart retailers know that the highest levels of customer service require the human touch. “The people that shop us are looking for something special,” says Coldwater Creek’s Shaw. “The key for us is having customer service agents, whether they are on the phone, on Internet chat, or at a retail store, who can suggest a particular pair of shoes or belt or purse that would go well with that blue dress you are buying. Having a very sophisticated, educated customer service agent representing our company and product to the customer is key.”

Dana Dubbs is a freelance writer based in Escondido, CA. She can be reached by e-mail at ddubbs@pacbell.net and by phone at (760) 432-9444.

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