The Store Fantastic

This month’s somber cover reflects the state of call centers today, but it also highlights their evolution into something rich and strange. Much the same thing may be happening to retail. While everyone’s going multichannel, it’s becoming increasingly clear that what distinguishes the winners from the losers is attention to the nuances, not just the broad strokes, of multichannel selling. It’s also clear that in most cases, those touches of sophistication come from the operations division.

Consider the ghost of Christmas past: Research firm comScore Networks Inc. notes that in holiday 2004, not only did online sales soar, they did so largely because of behind-the-scenes improvements that retailers had put in place. These included the capacity for in-store pick-up of online purchases, local delivery service, later shipping deadlines, gift cards, and online availability of products that were sold out offline. In another survey of e-commerce — this one focusing on the attitudes and experiences of online shoppers — comScore Networks, along with Fry Inc. and the e-tailing group inc., discovered that the results showed “consumers’ migration along a continuum, from pure online shopping to a more complex multi-channel experience that includes in-store pickup, gift registries, store kiosks, online coupons and many other resources.”

If you’re wringing your hands at this point, you’re right to be apprehensive. It takes a lot of work to make a multichannel business function at even a basic level, and it takes an almost extraordinary degree of effort to make it outstanding. We can’t even begin to list the number of things that need to be done, but Forrester Research Inc. does an excellent job of providing a framework for this massive project. In a recent report titled “Getting Multichannel Retailing Right,” Forrester analyst Carrie Johnson writes that there are three steps to multichannel expertise. The first, she says, is to “nail the basics” — get top management support, set up cross-functional teams, integrate systems (yes, this is now a basic), and so on. The second step is to develop multichannel investment priorities: What is your channel mix? What cross-channel shopping opportunities do your products offer? How seasonal is your business? What are the dynamics affecting your industry? Who are your competitors? And last comes the best part — when you play in the big leagues. This is when you think huge centralized data systems like ERPs, with customer, order, product, and inventory history clearly visible, integrated across channels, and — in the retail utopia we’re heading toward — updated in real time.

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