Best practices multichannel-integration

BEST PRACTICES:
Multichannel Integration
Learn what the experts
say about the benefits
and challenges of
multichannel retail
integration.

Developed and published by:

Table of Contents
www.retailcustomerexperience.com

Joseph Grove, executive editor
josephg@networldalliance.com
Page 3

Multichannel retail integration: An overview

Part I: Industry Insights
Page 8

Creating a customer-centric multichannel experience
from the inside out
Brenna Johnson, product marketing manager, Endeca

Page 10 The logistics of inventory sharing in multichannel retail

Chris Allan, chief customer officer, Quantum Retail
Page 12 The e-commerce ecosystem and online opportunity

Jason Katz, EVP and general manager, etailing solutions

James Bickers, vice president,
custom media
jamesb@networldalliance.com
Dave Henry, contributing writer
Audience Development
Dan Scofield
dans@networldalliance.com
John Renner
johnr@networldalliance.com
NetWorld Alliance

Page 15 Key lessons in multichannel integration

Pradeep Goel, senior consultant, MindTree Ltd.

Dick Good, CEO
dickg@networldalliance.com

Page 18 Best practices for developing a trading partner community

Jim Frome, CSO and EVP, SPS Commerce

Tom Harper, president
tomh@networldalliance.com

Page 20 Multichannel is not enough — welcome in channel

V. Bharathwaj, CMO, 24/7 Customer

Alan Fryrear, chairman
alanf@networldalliance.com

Part II: Case Studies
Page 22 Newey & Eyre successfully evolves from

in-store to multichannel

Carsten Thoma, president, hybris US
Page 24 Golfsmith’s multichannel integration with GMT Planet

John Ellis, senior director of professional services, GMT Corp.

BEST PRACTICES: Multichannel Integration

Best
Practices:
Multichannel
Integration ©2011 NetWorld Alliance
LLC. 13100 East Point Park Blvd.,
Louisville, KY 40223. (502) 2417545. All rights reserved. No part of
this publication may be reproduced
without the express written approval
of the publisher. Viewpoints of the
editors are his own and do not
necessarily represent the viewpoints
of the publisher.

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Multichannel retail integration:
An overview
Today’s information-empowered consumers are essentially
“channel agnostic.” They think nothing of encountering a
product on a store shelf or in an advertisement, researching
it online to compare features and prices, ordering it
through the retailer’s call center then stopping to pick it
up at a local store. Yet many retailers remain oblivious to
these changing realities and formulate their multichannel
strategies with serious policy limitations around the
integration of process, data and technology. Furthermore,
multichannel behavior offers a wealth of opportunities
for increasing revenue by up-selling or cross-selling the
customer who comes in the store to pick up what he has
bought online.
Michael Sonier, director of product marketing at
GSI Commerce, calls multichannel “the Lady Gaga of
e-commerce and retail — everyone has heard of it, but
no one can quite explain it. Like being an international
pop music star and fashion icon, if it was easy everybody
would be doing it.”

While some retailers have effectively
developed and implemented clear strategies
for managing resources across multiple selling
channels, many treat their various channels
as independent entities, with each channel
having its own operating strategy.
At minimum, multichannel retailing involves the selling of
merchandise or services to consumers through more than
one channel. While operating multiple channels has many
benefits, retailers also face many challenges, including
organizational resistance, crafting multichannel retailing
strategies and creating synergies across channels, making
key retail mix decisions and navigating the dynamics of
multichannel retailing.
While some retailers have effectively developed and
implemented clear strategies for managing resources

across multiple selling channels, many treat their various
channels as independent entities, with each channel having
its own operating strategy. Whether such fragmentation
is the result of entrenched thinking or incompatible
processes/systems inherited through the acquisition of
a new channel partner, the result is an inefficient supply
chain that leads to inaccurate order promising, poor
fulfillment rates, inconsistencies in business practices
and policies that may frustrate and confuse customers. A
prime example is a customer who discovers that a coupon
accepted at the store is not accepted through the call center
because of lack of cross-channel information visibility.
According to Gopi Krishnan and Arun Channakrishnaiah
of Infosys Technologies, channel fragmentation can result in:
An inconsistent customer experience
Duplication of data, processes and
information systems
The inability to gain a single view of the customer
The inability to gather and share data across
channels for analysis/decision making
Weak fulfillment percentages
Duplication of physical infrastructure
The primary challenge, then, is to seamlessly connect
channel-specific silos to ensure that the information
flowing across channels is enabled in near-real time.
Effective fulfillment of orders transcending channels
requires total synchronization — that is, the integration
of all core functions. There are significant rewards
for organizations that manage to achieve this level of
synchronization, as both the customer experience and
supply-chain efficiencies improve.
An integrated multichannel strategy is achieved when:
Order-management processes and supply-chain
functions across all channels are completely
integrated, and all ordering/fulfillment channels
have access to the data needed to execute all
transactions.

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Organizational and customer data aggregated
from these functions and processes are leveraged
to inform decisions about customer offerings,
order fulfillment, business policies and operational
processes.
Social media, used in collaboration with traditional email,
is an important catalyst in bringing marketers closer to
the goal of true multichannel integration. Social media is
where conversations about brands, products or services
often take place. Email, however, is still the vehicle
that alerts consumers to the social content, effectively
delivering “the right message at the right time” that
converts shoppers into customers.

Case Studies
Retailers such as Best Buy, Toys R Us and Nordstrom have
focused on providing their customers with the ability to
transact across multiple channels. In conjunction with
opening smaller stores in urban locations, Walmart has
rolled out a multichannel-integration strategy that uses
its stores to gain an edge over Web-only competitors such
as Amazon.com. Walmart’s U.S. president and CEO, Bill
Simon, recently announced plans to offer its customers
a number of new multichannel options, including the
ability to order items on Walmart.com with free delivery
to urban FedEx locations or same-day pickup at local
locations.
Best Buy reports that 40 percent of its Web orders are
marked for in-store pick-up. The Toys ‘R Us and Babies ‘R
Us websites provide the ability to filter products based on
availability for in-store pickup. Thus, a harried parent can
quickly identify which products are available to pick up on
the way to a birthday party or baby shower.
Integrated multichannel inventory visibility is what
makes this possible — and worth the initial setup efforts.
Dispersed inventory across both brick-and-mortar stores
and Web warehouses becomes a unique asset for retailers,
and those that deploy the right commerce-enabling
infrastructure are set to deliver a seamless cross-channel
experience that drives sales, bolsters brand loyalty and
reduces operating costs.
In 2010, while many retailers were experiencing sales
decreases at stores open for more than a year, sales at
Nordstrom were improving and outperforming the
department store average. Jamie Nordstrom, president


of Nordstrom Direct, attributed the company’s success
to recent improvements in its multichannel capabilities.
Nordstrom improved its multichannel capabilities in part
to improve customer service. (Prior to the upgrade, the
most common request received by Nordstrom’s call center
was from customers asking if a particular item displayed
on the company’s website was available at a local store.)
But the changes were also driven by a desire to increase
sales. Mr. Nordstrom pointed to research showing that
multichannel shoppers spend four times more, on average,
than single-source shoppers do. And once a retailer gets
an online shopper into the store, he is apt to buy more.
To support this change, Nordstrom had to aggregate
its inventory across its network and make it visible. As
described in the New York Times:
The change works this way: Say that a shopper
was looking at a blue Marc Jacobs handbag at
Nordstrom.com. She could see where it was
available at nearby stores and reserve it for
pickup the same day. More significant, if the Web
warehouse was out of that bag, it did not matter.
Inventory from Nordstrom’s 115 regular stores is
also included. Maybe there was just one handbag
left in the entire company, sitting forlornly in the
back of the Roosevelt Field store—it would be
displayed online and store employees would ship
it to the Web customer.
(“Nordstrom Links Online Inventory to
Real World” by Stephanie Gifford, New York
Times, August 23, 2010.)
This change occurred in two stages. First, Nordstrom
added the option for customers to shop and buy items
online and pick them up at a store. Then the company
started providing visibility to individual store inventory
on its website.
Why can’t an enterprise resource planning, or ERP,
solution provide this level of inventory visibility?
The problem is that ERP solutions lack the logic and
intelligence to track order-fulfillment events from order
to delivery and therefore to support multichannel orderfulfillment capabilities.
To overcome this challenge, multichannel retailers should
consider augmenting their ERP system with a distributed
order management, or DOM, system that provides the added
visibility and logic to enable cross-channel fulfillment.

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This extra intelligence is thanks to a feature that DOMs
have called “order parsing logic.” For example, if the inventory to fulfill an order is available from multiple
sources, order parsing logic determines which warehouse
it should be shipped from. Sterling Commerce’s DOM,
for instance, has the ability to calculate order lead-times
based on service-level agreements, carrier pick up
schedules and warehouse or store processing times. The
solution also can dynamically allocate customer orders
based on priorities such as channel or customer types,
and it can configure payment types and preauthorize
payments even before the order is placed, which reduces
the number of uncollectable payments.
The advantages to retailers who choose this path can be
immediate and significant. The rate of customers who
made a purchase after searching for an item online doubled
the first day cross-channel inventory was exposed on
Nordstrom.com. This clearly demonstrates that making
in-store inventory available online dramatically reduces
one of online shopping’s most unpleasant experiences:
the “no results” page. So while the changes at Nordstrom
were driven by a desire to satisfy customers, the effort also
translated to higher profits for the company.

Multichannel integration
Before retailers can attain multichannel integration they
need a technology infrastructure that supports marketing
strategy, development, delivery and measurement. A
recent Forrester “Big Idea” report outlines a three-step
technological approach the company calls the Marketing
Technology Backbone.
1. Create a centralized marketing hub.
If your catalog doesn’t have a chief marketing officer or
a cross-channel customer database, consider adding
them before implementing support technology for
multichannel integration and analysis. Marketing
management silos — Web, catalog and retail — need to be
united under a single vision before effective analysis and
implementation can take place, Forrester researchers write.
2. Define a five- to 10-year plan.
As it cuts across organizational and functional boundaries,
a multichannel-integration strategy takes time to develop.
A lengthy transition time is not uncommon, Forrester
notes. And if substantial technological improvement is
needed, be sure that both the CMO and chief information
officer develop the plan in partnership with one another.


3. Implement in one-year stages.
Attempting to complete multichannel integration
in a single iteration is not always practical. It’s best
to prioritize the entities to integrate across channels
according to an incremental, evolutionary path.
Individual initiatives within a five- to 10-year plan,
for example, should be completed within 12 months.
Whether an organization seeks to improve customer or
prospect data quality or to automate the execution of
cross-channel campaigns, it is important to ensure each
initiative addresses both the technology and business
processes to achieve each goal within the allotted time.
Other factors a retailer should consider when implementing
multichannel include:
Single source
Building a unified data warehouse for all critical
information generated across channels — such
as orders, customers, inventory, etc. — is an
essential precursor to multichannel integration.
Information systems
Point systems — whether legacy or new —
should have appropriate handshakes and specific
roles to play. Legacy systems must have the
ability to handle future requirements, while
new applications should have the capability to
integrate seamlessly with existing applications.
Channel conflict
If a customer places an order online but picks up
from a store, which channel gets the credit for
the sale? Stores may want to protect inventory
for store customers, but the online channel
wants to offer store inventory to its customers
as well. Policies to handle such potential
conflicts should be clear to all concerned.
Channel independence
A good multichannel-integration strategy should
allow for channel differentiation. For example,
“Cyber Mondays” usually have online-only deals.
Although retailers routinely sell some products
or product categories through a specific channel
as a way to calibrate demand, the other channels
should recognize such orders, too.

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Cross-channel integration
Retailers are focusing more and more on building trust
and connections with prospects and customers by offering
relevant and targeted content and promotions that add
value to customers’ lives. Making that content available and
creating touchpoints dependent on the customer lifecycles
across multiple channels and at the time the consumer wants
it is today’s cross-channel marketing challenge.
While many retailers understand the benefits of
communicating with customers using multiple
channels, few have actually mastered the nuances of
true cross-channel marketing. Furthermore, the terms
“multichannel” and “cross-channel” are often used
interchangeably, as if they are one and the same. They are
not. While multichannel drives retail marketing through
more than one channel, “cross-channel” marketing uses
one channel (such as direct mail or Web) as part of a
single campaign with a consistent message to support or
promote another channel, such as retail.

Retailers that persist in treating channels
as independent silos can expect to suffer
from ever-declining response rates
and weakened customer relationships
Each channel — whether direct mail, email, mobile or
social media — has unique communication attributes
that retailers must be sensitive to to present consistent and
coordinated information to their customers. To do this
effectively requires a single view of each customer or prospect, along with the ability to centrally drive campaigns
that span both traditional and emerging channels.
Many of today’s customers are in constant motion and
aren’t always accessible using traditional marketing
channels. With a single record of each customer or
prospect, organizations benefit from flexibility and agility,
defining and orchestrating a cross-channel strategy and
targeting customers regardless of their location or the
nature of the content. Plus, with coordination between
channels, if a customer doesn’t respond to one channel,
retailers can try another — escalating to high-cost
channels only for the highest-value customers.
A cross-channel marketing platform enables marketers to
essentially create single campaigns with consistent content,
graphics and promotions replicated across various channels.


These campaigns can be coordinated across channels and
with previous campaigns and configured so that no customer
receives more than one email offer a week.
Retailers that persist in treating channels as independent
silos can expect to suffer from ever-declining response
rates and weakened customer relationships, while those
who integrate emerging channels with traditional channels
through cross-channel marketing will have the capability
to reach the right person with the right offer through the
right channel at the right time, thereby reducing costs and
improving the effectiveness of marketing efforts.
The range of channels through which marketers can
reach customers and prospects will continue to grow over
the next several years, making the move to true crosschannel marketing more critical than ever to a retailer’s
success. The ability to integrate and manage traditional
and emerging technologies — and to use these channels
interchangeably — will allow them to reach customers in
motion and optimize the full customer experience, with
consistent communication at the point of sale.
The Interactive Advertising Bureau’s Cross-Media
Optimization Study demonstrates that employing crosschannel marketing using a variety of media vehicles in
a thoughtful and integrated way greatly increases the
likelihood of connecting with a targeted consumer. The
two-year study further shows that the same marketing
dollars, if effectively synchronized across on- and offline
advertising, can lift brand awareness by 8 percent to 34
percent, increase purchase intent by 5 percent to 1,000
percent and dramatically increase sales.
Meanwhile, findings from a November 2010 Aberdeen
Group study titled “The Roadmap from MultiChannel to Cross-Channel Retailing,” reflects the
pressures retailers face to be more aggressive in adopting
cross-channel strategies. The study finds that in 2011,
retail executives must provide customers with an
integrated shopping experience across channels. Best-inclass retailers with integrated sales channels are expected
to experience greater customer satisfaction, better
average sales and increased year-over-year revenue. The
report also expects cross-channel technology solutions
to complement the goals of brick-and-mortar channels.
For example, improved mobile website load times will
ensure that prospective customers can look up store
locations quickly. It is now more critical than ever that
retailers implement “buy anywhere, fulfill anywhere”
methodologies for uniform customer fulfillment.

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The greatest challenges to the effective allocation of
channel sales and costs are rooted in the inability to
measure cross-channel influence (i.e., consumers who
shop in one channel, and are influenced to buy in another).
Some businesses merely make their best estimate of
this influence in lieu of accurate data, while others have
integrated their Internet and catalog P and Ls and choose
not to accurately measure each channel’s ROI.
“Best-in-class retailers share several common
characteristics,” according to Sahir Anand, vice
president and principal analyst for retail, hospitality
and retail banking at Aberdeen Group. “They analyze
data on customers across channels, execute a common
strategy before, during and after the sale, and have
attained some form of cross-channel technology and
business-process integration.”
Aberdeen also finds that best-in-class retailers are 50
percent more likely than the industry average to create
offers and provide services across channels, enabling
brands to present customers with a unified look, feel, and
shopping experience.
Technology solutions such as SiteBuilder from ChannelNet
provide retailers with the tools and functionality needed
to implement an integrated cross-channel strategy that
optimizes customer interactions online, in the store, with
a service center or via a mobile device.
According to ChannelNet founder and CEO Paula
Tompkins, “Retailers must enable customers to seamlessly
transition from online to in-store whether it’s finding
the product locally or ordering online. Features such as
inventory look-up by store, couponing and mapping are
designed as part of a well-integrated retail business.”

Conclusion
Channel proliferation will continue to drive customer
expectations regarding seamless interactions, while at the
same time providing retailers with greater opportunities
for increased revenues through multichannel commerce.
Retailers with integrated data-collection systems are
finding that their customers are more multichanneloriented than they originally thought. Consistent brand
experiences, regardless of the channels shopped, provide
the customer with the type of familiar experience that leads
to increased multichannel purchasing behavior. Retailers


should aspire to increase the share of total shopping trips
their customers make, regardless of which channel those
trips are in. When this data is used to tailor offers and
create other value-added solutions, customers see the
value of providing personal information. As retailers
with integrated merchandising strategies continue to
invest in inventory management and price-optimization
technology, their ability to match supply and demand for
each channel will become more precise, and the effective
use of collected data will lead to increased sales across
channels, as well as a better experience for the customer.

multichannel marketing techniques require
an organizational structure that promotes
such behavior.
As consumers become increasingly adept at multichannel
shopping and the sales volumes of direct channels
continue to grow, retail executives cannot deny the need to
tap into the potential of multichannel leverage. However,
most retail organizations are not structured to achieve
integration benefits. Therefore, significant resources
need to be devoted to proving the case for integration
and to educating those who remain unconvinced of
multichannel leverage. According to a study conducted by
retail consulting firm J.C. Williams Group, multichannel
marketing techniques require an organizational structure
that promotes such behavior. Channel managers should
be encouraged to promote other channels and to make
more customers multichannel customers. Instead,
they often feel threatened by the perception that other
channels will cannibalize their sales. On the other hand,
multichannel retailers who have embraced integration and
are therefore unencumbered by the need to expend energy
on convincing their colleagues can expect to pull away
from their competitors as they accelerate their growth by
efficiently focusing on profitable customers.
To realize their multichannel commerce goals, retailers
should look at coupling multichannel operations with
multichannel integration. Beyond being a customeroriented initiative, multichannel integration also helps
achieve collaboration across the entire organization and
its processes, as well as with fulfillment partners. Broader
multichannel goals can be achieved via tighter integration
of the sell-side and buy-side channels and the addition of
customer and operational analytics to enable intelligent,
proactive and fact-based decision making.

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Creating a customer-centric
multichannel experience
from the inside out
Consumers don’t think in terms of channels; they
simply expect interactions with a retailer’s brand to be
consistent wherever they’re looking. But as they glide
between mobile devices, social networks, stores, websites
and search engines, customers are having inconsistent
experiences because retailers have traditionally been
channel-oriented. Without integration between the key
elements of technology and teams, retailers are not only
delivering frustrating experiences, they’re also missing
key opportunities to influence consumer behavior.
True multichannel integration is rare, because it’s hard
to do with legacy technology and processes. As channels
collapse and customers demand consistency on their
terms, retailers must reevaluate — but undertaking an
integration project is no easy task. Data is scattered, exists
in different formats and lives in different systems. Internal
teams are segregated and are held to channel-oriented
goals. Technology is expensive and inflexible. There is
no universal view of the customer base or cross-channel
performance.

Without integration between the key elements
of technology and teams, retailers are not
only delivering frustrating experiences, they’re
also missing key opportunities to influence
consumer behavior.
So is the process of aligning technology, people and
systems worth the hassle? Absolutely. Prepping your
business for the new world of commerce is not only
inevitable; there also are clear rewards for gaining firstmover advantage by unifying technology, unlocking data
and using touchpoints to work in symphony and to deliver
great customer experiences. According to a 2010 Forrester
study, retailers who had focused on integration found a
48 percent average increase in online sales, a 36 percent
increase in customer satisfaction, a 28 percent reduction


By Brenna Johnson
Product marketing manager, Endeca

in operating costs and 25 percent increased profitability.
The key is aligning technology, teams and processes
to drive multichannel experiences from the inside out.
Integration cannot be tied to one group or touchpoint, but
it must be an enterprise-sponsored initiative combining
long-term vision with tactical short-term goals. Use the
following strategies to align your technology decisions,
organizational structure and internal processes with
customer experience features.

Adapt to customers
Consumers want the freedom to engage in the ways they
please, to take the path that matters most to them and to
be shown relevant content along the way to help them
make a decision.
To understand the nuances of your customer base,
assemble a cross-functional team and map the customer
lifecycle and purchase behavior. Ask questions. How does
your organization respond to customers at different stages?
What touchpoints do customers tend to use? Do they
engage with different touchpoints for different purposes?
How does their behavior fit within your overall business
model? How will you measure touchpoint or performance?
How is content used in different touchpoints?
Consider technologies that deliver dynamic experiences
that adapt to customers and that give retailers the
flexibility to scale content and merchandising strategies
across touchpoints and unpredictable customer paths.

Use all of your data
Consumers want dynamic experiences that are tailored to
them, which means retailers have to know their customers.
Today, most retailers are just scratching the surface of their
most valuable asset — their customer data. It’s housed in

8


different systems, it’s in different formats and it’s locked in
reports that provide little actionable insight.

centralized team (such as marketing) could interact with
each channel touchpoint team to push change.

Identify what data exists, what format it’s in and where it’s
housed across the enterprise. Determine what is involved
to aggregate data and to ensure it is fresh to glean realtime insight into customer behavior and put it into action
with tailored experiences and campaigns. Combine
customer intelligence with merchandising analytics
to provide a universal view of multichannel behavior.
Aggregate in-store and digital analytics, customer-profile
data, campaign-performance metrics, segmentation data,
sentiment from social networks and inventory data for
an infinite number of ways to gain insight and analyze
performance across the enterprise. Close the loop by
investing in tools that allow business users to leverage this
data to automatically drive products, content spotlighting
and merchandising across touchpoints.

Competing in the new world of commerce will require a
strategic investment to differentiate your brand. As your
organization begins to think in terms of experiences
instead of channels, invest in flexible technology to get to
market quickly, test strategies and scale data across the
enterprise and any unpredictable customer experience.
Brenna Johnson is the product marketing manager responsible
for Endeca’s B2C eCommerce and mobile solutions. In addition to
developing multichannel best practices for clients based on retail
trends, she also assists customers with analyzing Endeca’s impact
post-implementation.

Make experiences portable and consistent
Consumers want fluid interactions regardless of the
combination of touchpoints they choose to engage.
Enabling data-sharing across touchpoints is a great way
to streamline the customer experience and accelerate
sales. Allow research or purchases completed in one
touchpoint to be reflected in the experience of another
— such as adding an item to a shopping cart on the Web
and having it simultaneously populate in the customer’s
mobile cart.
A unified infrastructure not only delivers consistent
customer experiences, but it also reduces costs and
demands on IT staff, and it simplifies the expansion of
new business models and channels so your organization
can scale and grow without being inhibited by technology.
When investigating new technologies, be sure you can
plug in to existing systems and leverage your legacy data
in an efficient, low-cost way.
A large-scale integration project will undoubtedly take
time and impact your organizational structure, but the
reward and growth opportunity is too big to ignore. Put
vision into practice, and organize small groups to test different organizational structures and tactical changes. Test
organizational structures, such as assigning a cross-functional team around an emerging touchpoint (like social
or mobile). Select pilot group participants who may have
conflicting channel objectives, different skill sets and different roles within the customer lifecycle. Or, test how a


9


The logistics of inventory sharing
in multichannel retail

By Chris Allan
Chief customer officer, Quantum Retail

Selling through multiple channels is nothing new to the
retail world; many businesses have been doing it since
the invention of the first mail-order catalog. What can
be considered new is today’s definition of multichannel
retail. From e-commerce on the Web, through mobile
devices and in social media to traditional phone, instore and catalog sales, multichannel retailing is taking
on a whole new meaning and becoming more important
than ever. Consumers have instant access to information,
and retailers want to take advantage of that spontaneity
to convert browsing into buying. To accommodate
consumers’ needs, retailers are restructuring both
their online and in-store merchandising, supply-chain
and inventory platforms with hopes of creating a more
concise and positive experience for their consumers
across all channels. Consumers now have higher demands
and expect both more flexible multichannel shopping
experiences and availability from retailers, on whatever
channel and at whatever time they choose to shop.
Multichannel fulfillment is considered by most to be the
creation of one holistic retail experience. This integration
gives consumers the freedom to interact with retailers on
their terms, putting them in control of where and when
they will spend their money. According to Retail Systems
Research, or RSR, “A consumer that shops in a multichannel environment will spend 30 percent more with that
retailer.” Providing additional channels for consumers
also typically leads to better customer service. This means
that implementation of a multichannel strategy is in the
best interest of both buyers and sellers. But before retailers
can reap the benefits of a multichannel solution, they must
first overcome inventory complexities, which require more
planning and a different strategy to become effective.
Retailers should consider a couple of big-picture questions,
starting with how they plan to present a consistent
customer experience across all channels. Inconsistencies
in pricing, promotions and availability make for an
unhappy customer. Retailers also should look at making
sure they have a consistent and accurate way of offering


shipping, selling and marketing across all sales channels.
On top of this, for each newly developed channel or
touchpoint, retailers must consider an increased number
of specific concerns. From on-point customer service to
product ranges, stock availability and potentially different
fulfillment, each channel has its own unique list of
challenges.
It is important that retailers try out different configurations
to address each multichannel need. Some channels will
have separate supply chains and dedicated stock, which
can lead to a duplication of safety stock and excessive
waste and carrying costs. These results are not sustainable
for grocery retailers in particular, with short-lived fresh
product, where the cost is true wastage and not just a
markdown. Similarly, for fashion retailers, markdowns
not only can reduce profits, but also can lead to direct
losses and cause an erosion of brand value as consumers
begin to expect discounts and stop buying at full price.

To accommodate consumers’ needs, retailers
are restructuring both their online and
in-store merchandising, supply-chain and
inventory platforms with hopes of creating a
more concise and positive experience for their
consumers across all channels.
For those with a single supply chain, managing product
availability and balancing service between channels can
still be a struggle. It is important that these issues are
managed in unison and are closely tied in with local
consumers and their shopping habits. Some retailers have
a hybrid, where the online business pulls stock from core
channels, but this can lead to availability issues and an
excess of safety stock. One of the most efficient ways is to
hold back stock in order to monitor where the demand
resides for the product and where it will have the best

10


performance, whether it is at specific store locations or
channels. To create a process that is responsive enough to
monitor holdback stock, retailers need quality information
to forecast forward performance and sales and to improve
transparency and predictability throughout the supply
chain. Because of the increased confidence this creates,
retailers can wait longer to make decisions that commit
inventory to a specific channel or store, which is significant
as there is no cheap way to realign that inventory to
consumer need at a future date.
Another challenge has to do with reverse logistics. When
a customer wants to return an item to a retailer, he is not
necessarily going to use the same channel he purchased the
product through. This can then create a huge problem for
any retailer from an inventory-management perspective.
Few retailers have been able to implement a solution to
respond to this issue in an efficient and consistent way.
Having an organized and accurate multichannel strategy
is fundamental to supporting a retailer’s brand image by
providing the consumer with a consistency in his shopping
experience. To optimize the multichannel supply chain
and to ensure that the right product is available in the
right place without overstocks and resulting markdowns/
wastage, retailers are looking to implement holistic
technology solutions, which can help to automatically
address many of these issues.
At the end of the day, those retailers who are able to master
inventory management across multiple channels have a real
competitive advantage, while those that fail to do so will
experience declining loyalty, sales and overall brand value.
Chris Allan, chief customer officer at Quantum Retail, has worked
exclusively in the retail industry for the past 17 years. This has
allowed Chris to work with a wide variety of leading retailers
around the world. Cumulative learning from some of the world’s
best apparel, hardlines, grocery and convenience retailers has
helped Chris define and shape the next generation of retail software
solutions. At Quantum Retail, Chris is responsible for product
strategy and innovation with a combination of art and science.


11


The e-commerce ecosystem
and online opportunity
The greatest opportunity to increase consumer goods
sales in the retail environment is not happening instore; it is happening online. The expanding e-commerce
channel also is changing how manufacturers, retailers
and consumers interact in the buying environment.
To capitalize on this opportunity, brands and retailers
need to better understand shopper migration, develop
new selling strategies to satisfy the range of emerging
online/offline shopping behaviors and closely listen
to consumers, who are the architects of their online
experiences. Advancements in technology — which are
increasing consumer control of media consumption,
information access and communication — also are
increasing consumers’ ability to buy what they want when
they want it and how they want it.

By Jason Katz
EVP and general manager, etailing solutions

huge driver of future online buying. Pure-play e-tailers
also lead the way in online shopper segmentation and
data management. They capture past online-shopping
behavior to create a more customized environment.
However, they are less familiar with the packaged-goods
retail fundamentals, such as the importance of product
presentation, merchandising and solution selling.

The winning brands and e-tailers will be
those that develop solutions based on
consumer demand.

Packaged-goods marketers
Changing retail dynamics
The landscape of online retail is changing dramatically.
Once dominated by pure-play e-tailers, the landscape
now includes hybrid brick-and-mortar/online players as
well as packaged-goods companies seeking a more direct
connection with consumers. Pure-play and hybrid e-tailers
who offer a broad variety of items and an experience that
saves the customer time and convenience have a decided
advantage. Consequently, players such as Amazon, Peapod
and Drugstore.com and brick-and-mortar e-tailers such as
Walmart and Target pull far more traffic than brand sites.

Pure-play e-tailers
Pure-play e-tailers concentrate on driving online traffic
to a site, aggregating demand and capturing a significant
market share in select categories. This is what drove
Amazon to acquire Quidsi (Diapers.com and Soap.com)
for more than $500 million in November 2010. Amazon’s
acquisition added 1.9 million visitors to its reach and
frequency and 1.2 million unique visits and also captured
the important “new mom” segment that represents a


A handful of packaged-goods marketers are developing
sites that sell products directly to consumers. Generally,
outside e-commerce providers handle fulfillment and
technology functions for which marketers are not
equipped. This is creating competition among e-commerce
providers to land the largest number of packaged-goods
marketing/sales sites to achieve both incremental revenue
and data collection. Consumers who buy through a
packaged-goods site tend to have greater loyalty, as
they have had an opportunity to experience a richer
engagement with the brand via the site. Recognizing the
richness of these engagements, brands such as Pop Tarts/
Amazon and Nature Valley/Alice.com are building “storewithin-a-store” concepts on their sites.

Hybrid retailers
Many hybrid online/brick-and-mortar retailers such as
CVS are just beginning to determine the balance between
offline and online buying. Nielsen Research has shown
that consumers who shop a retailer in both the online and
offline channels are 30 percent to 60 percent more valuable

12


than consumers who shop only one channel. Hybrid
retailers are focusing on digital technology and strategy
and determining how best the buying and logistics process
will work. Among the important questions are: Do online
and offline have separate buying groups? How are buyers
best credited for online and offline sales? What is the best
model for fulfillment and product assortment?

The online opportunity
The Web represents an opportunity to gain back a
percentage of lost in-store sales over the next 3 to 5 years.
This is why more and more packaged-goods players
are beginning to embrace e-commerce. However, the
majority of brand retail marketers are not approaching
this channel of trade strategically, and this will result in
lost opportunities.

Develop a strategy
Developing an e-commerce strategy calls for recognizing
the entire online ecosystem that a brand has created and
identifying how it will feed into a customized buying
solution. Consideration must be given to the manufacturer,
brand and e-tailer websites, as well as to customized
buying portals and social sites such as Facebook, Twitter
and so forth. Each of these assets offers an opportunity to
capture an increasing percentage of online sales.

Ensure visibility
Product visibility is another factor that greatly affects
online sales success. Go to Amazon or Drugstore.com and
conduct a search for oral health, eye care or disinfecting
wipes. If your product does not appear on the first page,
chances are you won’t be seen at all. Optimizing visibility
is a balance of decoding the descriptor algorithm that
drives search-engine rankings and developing a strategic
merchandising plan with retailers to spotlight your brands.
Merchandising in the digital environment can parallel the
retail environment with lobby displays (homepage), end
caps (category landing page) and even in-aisle displays
(brand-level pages). These displays offer brand value, and
online retailers are beginning to maximize brand revenue
in this space.

Plan for product availability
Manufacturers must make sure they have the appropriate
products readily available for consumers to buy online.
The benefit of the online channel is “virtual shelves” that
can hold a limitless number of items. Over the next 12 to
24 months, as manufacturers increase their investment in
e-tailing solutions, this focus must include:
Sales audits. Develop an understanding of your
current product availability, share-of-choice,
branding, promotional tracking, ranking and
reviews. Establishing a benchmark of current
performance will allow the business to measure
success and better understand sales drivers.
E-tailing strategy. Create a size-of-prize analysis,
ranking online retailer importance to the brand,
developing a broad-based e-tailing ecosystem and
selling strategy.
Sales support. Establish a comprehensive sales
planning and forecast model, identifying the best
sales support structure and route-to-market.
Digital shopper marketing. Work collaboratively
with online e-tailers to plan annual or semiannual digital shopper-marketing plans.
Shopper research. Map out a comprehensive
research strategy that provides shopper insights,
digital-environment
studies,
segmentation
analysis and loyalty studies. Every category and
retailer is shopped uniquely, and one size does not
fit all. Understand the unique dynamics between
the brand, the shopper and the buying behavior.
Marketers who take one step back to survey
their digital ecosystem before jumping into
e-commerce will save themselves countless hours
and dollars redoing their online selling strategy.
E-commerce is not necessarily a zero-sum game. Both
brand and online e-tailers are reaping the rewards of
collaborating in the digital and retail shopper-marketing
arenas. To enhance online sales velocity, brands and
retailers are already starting to create annual and semiannual plans that capitalize on seasonal selling periods.
E-commerce is just emerging in the consumer packagedgoods space and will continue to affect the buying


13


dynamic between brands, consumers and retailers. The
winning brands and e-tailers will be those that develop
solutions based on consumer demand. They will include
customized experiences, broad product availability,
continuous replenishment and consistent product delivery.
This will propel online sales growth at double-digit rates
for the next five years to achieve a 3 to 5 percent share of
consumer packaged-goods sales. For a multibillion dollar
industry, that is a lot of clicks.
Jason Katz has more than 20 years of agency experience in
developing promotional, account-specific and digital marketing
programs for consumer packaged-goods clients. He joined D. L.
Ryan Companies in 1997 with Ryan Partnership, and became EVP,
at Catapult Marketing in 2005 when it became an independent
subsidiary, where he created specific service offerings for the twin
evolving disciplines of digital shopper marketing and mobile
marketing. Most recently, Jason’s role is executive vice president,
general manager of etailing solutions, a division of D. L. Ryan
Companies, Ltd.


14


Key lessons in
multichannel integration

By Pradeep Goel
Senior consultant, MindTree Ltd.

Why multichannel integration matters

Multichannel integration challenges

Retailers are increasingly multiplying their channels,
adding Web platforms and call centers to brick-and-mortar
stores to reach more and more customers. Interestingly,
however, customers do not use one channel exclusively
to complete their purchases anymore; as a matter of
convenience, many customers use the multiple channels
a retailers makes available to complete the purchase
process. Consumers also are mixing different channels for
different activities. For example, a multichannel customer
might research a product at home by visiting a retailer’s
online store, doing comparisons and reading reviews
about the product. If this user has specific queries that are
not answered online, he may then call the retailer’s call
center. After completing his research, he may go back to
his computer, place an order online and then track the
order status or shipping details. Or he may place the order
online and then pick up the product from a nearby store
instead of having it shipped from a warehouse.

The behavior of multichannel consumers outlined in
Figure 1 is driving the need for multichannel integration.
While many retailers add different channels one-by-one
to respond to rapid changes in the marketplace and in
customer expectations, disparate channels are no longer
able to drive customer satisfaction or revenue.

A Gartner survey released in March found that 66 percent
of consumers believe consistency across channels is
important, and they expect to be provided “one view of
the retailer.”

Best practices: Key considerations for
multichannel integration

But integrating multiple channels poses several challenges,
due to different systems that work using different
technologies, organization structuring that already is
established and the need to manage inventory across
channels. It is important to identify business needs and
align integration road maps to satisfy these needs before
embarking on a multichannel integration initiative.
Making product and pricing information and inventory
visibility uniform across channels poses huge challenges
that should be dealt with diligently.

1. Catalog consolidation
Catalog consolidation is the first step to integrating
channels, since each channel can have its own catalog.
While most items may be common to the
brick-and-mortar and online stores, some
items are sold exclusively at physical stores,
and others are exclusively available online,
posing a need for different catalogs. Hence,
items common to both channels can end up
being duplicated across the catalogs.

Figure 1: Multichannel customer behavior (Singh, 2010)


It is a good step to consolidate all such
catalogs into one enterprise-wide catalog.
It then enables the catalog to be leveraged
across the business units, regardless of which
channel had originally carried that item.

15


Business rules should be used to sell items exclusively on
the website or in the stores as needed.
Consider the following when consolidating catalogs:
Once the cross-channel fulfillment solution is
implemented, it becomes necessary to search for
items across the channels using item classifications
such as style, size and color.
When an item is being added to the order, validation
of that item is performed, and it can be very intensive
as each and every catalog is searched until the right
match is found. This would be simpler if only one
catalog were maintained for the entire solution.

3. In-store — save the sale
If an item is not available in a physical store, but the
retailer has an integrated order-management system, a
store associate can search the inventory of the item, place
a special order and ship it from its distribution center. This
allows store personnel to save an in-store sale that might
have been lost otherwise. Typically, distribution centers
are the same facilities that are used for e-commerce and
call-center fulfillment, resulting in an extended virtual
supply chain. Saving in-store sales increases total revenue,
and the virtual supply chain helps keep operating costs
down, making for a rapid return on investment and a
perfect business case for implementing this functionality.

It is recommended that each channel ensures that
its item numbers are unique with respect to all
channels.

2. Inventory consolidation and visibility
across channels
A distributed order-management system is an important
enabler to achieving multichannel integration. This system
can address processes owned and managed by retailers,
as well as those owned by the retailer’s suppliers and
third-party logistics for the products and services bundled
by retailers.

The retailer saw one in-store sale saved each
day for a year, making for a very high return
on investment and a proven business case for
implementing the system.
All the orders captured through various channels are
aggregated in a distributed order-management system,
and a real-time complete demand picture is made
available.. The system also provides global visibility of
inventory, inventory available in fulfillment nodes, intransit inventory and inventory on purchase orders.
A distributed order-management system is capable of
matching aggregated demand with inventory available at
various points in the best possible way.
A distributed order-management system also can help
retailers manage capabilities offered to its customers, such
as store pick-up for products purchased or reserved online.


Figure 2: Sequence diagram for inquiring item at distribution
center from point of sale

4. Business considerations for multichannel
integration
After integrating multiple channels, planning for
each channel in isolation is no longer recommended.
Isolated planning may put pressure on another
channel, and may lead to the cannibalization of
sales at other channel.
Different channels may have different profitability
for the same item. If an item is not profitable at one
channel, it should not be offered at that channel.
A channel’s performance may be impacted due
to cross-channel returns. A business should take
this impact into account while reviewing channel
performance. A tolerance for this effect may be built
into the key performance metric of a channel.

16


5. A case study in multichannel integration
A leading specialty retailer of fashionable, attractively
priced women’s apparel and accessories sells its
merchandise thorough brick-and-mortar stores and its
online store in the United States.
This company had a separate distribution center to fulfill
its Web store orders, while stores were replenished from a
different warehouse. If a store ran out of inventory for a
particular item, such as a particular size or color of a dress,
the sale was lost and the customer was left dissatisfied,
despite the availability of the item at the online channel or
even in another brick-and-mortar store.
When the company embarked on multichannel
integration, it achieved inventory integration across
channels by implementing an order-management system.
The system extended the virtual supply chain, hence
directly lowering the operating cost.
Inventory available at the company’s e-commerce
distribution center was made available to sell at the point
of sale in the physical store, thus providing a store associate
with the ability to convert an in-store customer sale that
might have been lost otherwise.
The retailer saw one in-store sale saved each day for a year,
making for a very high return on investment and a proven
business case for implementing the system.

Conclusion
Customer behavior is guiding retailers to integrate their
multiple channels. It is a good idea to analyze customer
behavior to prioritize focus areas of channel consistency
before integrating channels. A good multichannel
experience is not just an option anymore; given the
adoption by customers and retailers alike, it has become
imperative to success at retail. Proven increased efficiencies
and high return on investment further encourage retailers
to invest in this area.


17


Best practices for developing a
trading partner community

By Jim Frome
Chief strategy officer and executive vice president, SPS Commerce

The retail industry is facing what many observers call
the most difficult economic environment in decades.
As consumers scale back on spending, retailers face
tremendous pressure to do more with less. At the same
time, consumers have become more demanding about
getting the specific products they want and getting
them faster than ever before. To enhance efficiency and
visibility with supply chain partners in this challenging
environment, retailers strive for greater supply chain
integration through a well-executed effort to develop a
community of trading partners.
Trading partner community development, which enables
retailers to electronically integrate their data and business
processes with suppliers and other trading partners, is by
no means a new idea. Electronic data integration, or EDI,
is the primary technology for achieving this and has been
around since the 1970s. Despite its obvious benefits, the
risks associated with a poorly executed enablement effort
have kept many retailers from moving forward.

Trading partner community development,
which enables retailers to electronically
integrate their data and business processes
with suppliers and other trading partners,
is by no means a new idea.
Here are five best practices that retailers can follow to
ensure success in their trading partner communitydevelopment initiatives:

1. Develop a road map that focuses on supplier
relationships and not just technology
First, retailers need to develop a plan and road map for
the trading partner community-development program.
This plan should address the following three components:


vendor segments, fulfillment models and the data and
information to be shared.
A successful vendor-enablement initiative must accommodate the retailer’s unique mix of fulfillment models,
such as:
Shipping to a distribution center
Drop shipping (for e-commerce fulfillment)
Shipping to stores
Vendor-managed inventory, or VMI
Direct store delivery, or DSD
Multi-party fulfillment
Private label fulfillment
The retailer also should evaluate what types of information
it wants to capture or exchange with its trading partners.
Some of the most common transactions include:
Purchase orders and purchase order changes
Invoices
Advance ship notices, or ASNs
GS1-128 labels (formerly UCC-128)
Too many enablement programs prioritize systems over
relationships. While technology is important, managing
vendor relationships is absolutely critical. The challenge
of any enablement program is convincing hundreds,
or even thousands, of suppliers to spend time and money
on something that fundamentally changes how they
do business.

2. Give merchandising the leading role
A retailer’s merchandising department should spearhead
all trading partner community-development programs.
To appreciate why merchandising has to take the lead,
retailers need to understand how vendors will react. Be
prepared for the responses from suppliers to break down
as follows:

18


Thirty percent will enthusiastically adopt the
program with no questions asked.
Forty percent are willing but will “challenge” your
business case and may need validation of your
commitment to doing business with them.
Twenty percent are vocal resisters.
Ten percent are hard to predict and may not belong
on the target list.
In this critical step, the retailer’s merchandising department must set a targeted adoption rate that represents an
appropriate equilibrium point between adoption rates and
disruption to vendors. The adoption-rate goal will drive the
whole program, including its message, tone and timeframe.

3. Be accommodating to suppliers’ needs
As long as retailers can get the data they need, suppliers should be free to choose the solution that works best
for them. Some suppliers have been doing EDI for a long
time with many other retailers and will want to extend
the system they already have and use a one-time testing
effort. Others who don’t have an EDI system in place or
don’t want to use their existing system need a quick and
easy way to get up-and-running. Software-as-a-Service,
or SaaS-based, programs that have been certified with the
retailer are the best choice.
Using SaaS EDI, vendors can start doing transactions
almost immediately without investing in special hardware,
software or staff. These services can be accessed via a Web
form for suppliers with low-to-medium transaction volumes,
or they can be directly integrated with an accounting,
enterprise resource planning (ERP), packing/shipping or
warehouse-management system for organizations with
higher transaction volumes. In addition to getting suppliers
up-and-running quickly, SaaS EDI services do not require
staff to handle each vendor test cycle separately and offer
predictable monthly fees.

4. Make testing real, and staff accordingly
Often it’s easier to test vendors up front with a generic test
order. However, this creates more work down the road and
can lead to problems with the production effort. It’s better
to spend time at the outset of the program testing real data
using real transactions that are meaningful to the vendor.
If multiple transaction types or fulfillment models are being implemented, multiple test scenarios using real data
are needed.


In the long run, using actual syntax and actual content is
time well spent and can eliminate many potential issues
associated with a real order.
It is also important to staff the implementation properly.
The enablement campaign (whether staffed internally or
outsourced to a third-party provider) is responsible for:
Developing messaging
Analyzing the supplier community
Developing a rollout plan
Executing the supplier campaign
Certifying suppliers
Providing ongoing support
Each of these steps can be extremely time-consuming.
Due to the magnitude of the effort required for a successful
campaign, retailers (or their third party providers) usually
need a 20- to 30-person team to get through a six-month
spike of activity.

5. Score data quality, and think long term
Finally, once the EDI system is in production, retailers
need to remain focused to ensure that vendors continue to
complete all the required transactions and send all necessary
data. Merchandisers can be equipped for improved vendor
discussions using dynamic scorecards that leverage data
directly from their EDI environment. This phase offers
an excellent opportunity to monitor and score vendors.
If suppliers fail to comply with the enablement effort, it’s
important to inform them of their status and ensure there
is a consequence for non-compliance.
Managing an active trading partner community should
be seen as an ongoing journey, not a one-time event.
Successful retailers never believe their first trading partner
community-development program is their last.
Once the EDI system is in production, it should be closely
monitored to ensure vendors are complying with the
program. After the initial campaign is completed, retailers
might want to expand their trading partner communitydevelopment efforts to include more suppliers, more types
of transactions or more fulfillment models.
You can reach Jim Frome and learn more about trading partner
community enablement by contacting SPS Commerce.

19


Multichannel is not enough —
welcome in channel
On a global scale, the idea of creating multichannel
integration and getting a 360-degree view of the customer,
which leads to better service, has been a decade-old, elusive
dream. This dream has several connotations, including
how consumers can seamlessly move from one channel to
another and how customer data is made available between
channels. Meanwhile, channels continue to grow and
fragment, as can be seen with social media or texting.
Technologies within a channel continue to mature or
die (for instance, customers do not have the patience to
resolve issues on e-mail today, yet many companies still
provide this as a primary contact), but the obsession with
multichannel integration persists. The real concern from
a consumer standpoint is “solve my problem, where I am,
in channel.”

This can be illustrated through my own experience as a
consumer. Recently, I was online with my cable services
provider, trying to seek help with my username and
password, which I had forgotten. I went to their website
from my iPad and started with a simple Web form that
asked for my phone number, gave a “CAPTCHA” code
that I filled twice and finally showed a link to chat. I filled
out the new form and went through the next 25 minutes
trying to get my username and password, with the last
action of physically crawling to my modem to find out
the Mac address … and there were four of them! I just
stopped the chat. Next, I tried to reach the customer
service department through social media and, lastly, via
telephone. After 35 minutes of trying to solve my issue
through various channels, I gave up.

As a consumer in the “second Internet” of Twitter,
Facebook, smartphones and tablets I find this to be a
frustrating experience. The question is, “if companies can
actively track consumer behavior to micro target and sell
to them, why can’t the same be done in service?” When it
comes to service, it is still the old world and 1-800 rules.

What does multichannel do? It provides better frequently
asked questions, or FAQs, with click-to-call or click-to-


By V. Bharathwaj
CMO, 24/7 Customer

chat. Unfortunately, it does not resolve issues. In fact,
published research shows that the majority of consumers
go online to get their problems solved, but less than 15
percent actually find a resolution. Web sites are clearly not
leveraging all the available intelligence to its fullest extent.
That is, they do not attempt to predict what the consumer
is trying to do — instead, they wait for consumers, just like
an old-fashioned phone agent. The phone channel cannot
recognize that a customer has had a frustrating experience
online. In essence, multichannel integration does not solve
the frustration that a customer faces when his problem is
not solved in the channel, but being in channel and solving
it in the device will.

The real concern from a consumer
standpoint is “solve my problem,
where I am, in channel.”
So how can in channel solve problems? Through predictive
customer experiences. They are all around us — Google
does predictive search, Amazon personalizes and predicts
what you may want to buy and Facebook predicts who
may be your friends. Now, the same predictive experience
is extending to customer interactions.
Predictive customer experiences are stickier than reactive or proactive customer experiences because they are
personalized, they make predictions and they resolve the
issue. The result is that consumers do not need to switch
channels to get service; instead, they can do it in the channel and device they are in. The real key is to constantly
learn, apply and improve predictive service within interactions and not the way traditional predictive analytics is
applied, which is offline and not at the “moment of truth”
for consumers.
There is a great deal of structured (CRM feeds) and

20


unstructured data (social media feeds) about consumers
as they use different channels. By fusing these feeds and
understanding customer behavior in different channels,
such as the Web and the telephone, one can predict what
consumers want when they are in a channel and can
specifically resolve their issues in the channel through
predictive service — no generic FAQs are employed.
The prediction in a channel such as the Web can extend
from who has a problem, what the issue is and when they
need assistance to what they are looking forward to and
how to resolve it step-by-step during an interaction. If
we step back to my previous example, if I was online
trying to retrieve my username and password, I would
have encountered an interactive application that would
have specifically identified me, predicted my problem
and guided me to resolve it — all within a few minutes.
I would not have needed to scramble around looking to
the 1-800 numbers, fully expecting that I have to start all
over again with the next agent on the phone.
Welcome to predictive customer experiences. Welcome to
the world of in channel.


21


Newey & Eyre successfully
evolves from in-store
to multichannel
Newey & Eyre, based in the United Kingdom, is a leading
distributor of quality electrical products. It is part of Rexel
UK Ltd., a division of one of the world’s largest businessto-business distributors of electrical materials; safety
supplies; and other maintenance, repair, operations or
MRO products. Newey & Eyre is committed to helping
its customers select the best products for each project and
supporting them in the planning and management of
major projects via its network of more than 150 branches
across the U.K.
Renowned for its highly personalized branch counter
service, the company was determined to continue
providing the best customer support possible during the
tough economic conditions in the construction industry
and wanted to help this very traditional market sector
embrace new ways of working. To help contractors improve
efficiency and reduce project-completion times, Newey
& Eyre would need to offer a complementary alternative
to the traditional in-store model without compromising
customer service.
The company wanted to develop a functionally rich “onestop shop” on the Web that would provide the electrical
wholesale market an online channel that offered the
capabilities found in the general retail sector but rarely
provided in the B-to-B sector. The Web platform also
needed to be integrated with the traditional branch
operations and personalized service Newey & Eyre’s
customers had come to expect.
More specifically, Newey & Eyre’s multichannel commerce
platform needed to deliver real-time customer-specific
pricing, incorporate the B-to-B functionality expected
by the electrical sector and offer next-generation
merchandising of products and contents pages on the
Web. In addition, the multichannel platform had to
integrate the company’s current enterprise resource
planning (ERP) system and business-reporting solution.
Lastly, the platform needed to be flexible, scalable and
able to integrate with existing workflows.


By Carsten Thoma
President, hybris US

Newey & Eyre accomplished this tall order by selecting
the hybris Commerce platform as the foundation of its
new “one-stop shop,” and the companies worked with
e-commerce consultancy and systems integrator Javelin
Group to launch Newey & Eyre’s online store in June 2009.
The site offers customers the first truly multichannel
B-to-B experience in the electrical wholesale market.

The company wanted to develop a functionally
rich “one-stop shop” on the Web that would
provide the electrical wholesale market an
online channel that offered the capabilities
found in the general retail sector but rarely
provided in the B-to-B sector.
The hybris Commerce solution is fully integrated with
Newey & Eyre’s Cognos business-reporting solution,
Omniture Merchandising solutions, Movex ERP system
and Yahoo! Analytics. Omniture Merchandising drives
the website search engine and manages the content of the
pages, including displaying promotional banners. Data is
fed into Cognos from hybris and Movex to provide Newey
& Eyre with clear business reporting across the entire
organization wherever a customer places an order.
In January 2010, Newey & Eyre implemented hybris’ PCM
platform as part of the second phase of its multichannel
integration , enhancing product information-management
capabilities for the brand’s expanding product portfolio
and supporting additional customer channels.
NeweysOnline.co.uk integrates the traditional in-branch
service that electrical contractors expect, with a new
Web channel that dramatically enhances the after-hours
support for Newey & Eyre’s customers.

22


It provides online capabilities not previously experienced
in this sector, including:
Online/offline order history — This is set at an individual user level, allowing customers to view what
they have purchased not only online but also offline
at the branch. This is a useful tool for accounts departments, managers overseeing what employees
are purchasing and smaller contractors viewing
what they have previously used on other jobs.
Out-of-hours ordering — This allows contractors
to place orders for next-day delivery or collection
up to 8 p.m.
Trade accounts and individual price lists — Customers who hold trade accounts have a personalized
price list that is specific to them. The website allows
them to view and place orders at their own prices.
There is also a Web price for those customers who
do not hold a Newey & Eyre account.
Single checkout process — Combining “click &
collect” with delivery confirms that neweysonline.
co.uk is a true “one-stop shop.” Customers who
wish to place an order and have some items delivered (perhaps to site) but also require some items
first thing for another job can place one order online without having to check out twice. The ability
to select items and the optimum fulfillment service
for jobs today, tomorrow and the rest of the week is a
capability that is not yet available in the retail sector
and a true innovation for the B2B market.
Job lists — Customers can create lists of products
for specific jobs that they regularly execute so they
can simply re-order from an existing list, instead of
searching for the same products on each occasion.
Each user can have unlimited job lists.
Live stock checks — Customers can place orders
for next-day delivery or collection with the
reassurance that the items are in stock when they
place their orders.
Datasheets — Contractors can now download their
own datasheets from more than 3,000 stored online.
From the branch side, neweysonline.co.uk has enabled
branch managers to manage new business much more
effectively. All customers who register online register
against a branch where they wish to manage their
account. The branch manager is updated each week
about new contractors registering online and can decide
whether to contact them by phone or email or arrange


a visit. It reinforces the face behind neweysonline.co.uk
and provides the customer with a local point of contact
— and not a national call center. This helps the branch
gather direct contact details for local businesses but
more importantly helps to facilitate relationships with
online customers, where they had not been able to
before. Revenue for an online order is allocated back to
the branch where the relationship is established, and a
consolidated view of customer orders in the integrated
ERP system enables the branch to view all orders and
manage the customer’s orders regardless of the channel
used to make the purchase.
In addition to the above benefits, the new site has enhanced
ROBO (research online buy offline) rates and is driving
traffic directly to branches, with large numbers of visitors
now searching for a product online but immediately
using the branch locator to find their local branch and
then making their purchase in store.
With regard to specific ROI, neweysonline.co.uk has
produced significant increases in online traffic, sales,
return rates and out-of-hours ordering following its
launch, including:
13 percent of orders are collected at branch via
“click and collect.”
26 percent of the online business is now completed
outside of normal branch hours.
The fastest order placed to date was completed in
2 minutes 47 seconds with only seven page views,
including logging in, locating the right products
and checking out.
Approximately 15 percent of new account forms
are now being completed online, assisting new
business development.
With the success Newey & Eyre has realized, Rexel hopes
to extend its use of hybris’ platform by investigating
potential additional Web channels for new markets within
the electrical industry.
Carsten Thoma, president of hybris US and COO of hybris
Group, co-founded the multichannel commerce software provider
in 1997. He began his career at Hewlett-Packard, where he first
developed his ideas for standardized yet highly innovative and
flexible e-commerce software. For more information on hybris,
visit www.hybris.com.

23


Golfsmith’s multichannel
integration with GMT Planet

By John Ellis
Senior director of professional services, GMT Corp.

Challenge
Since 1967, the goal of Golfsmith International Inc. has
been to be “Your Caddy for Life.” With more than 60 golf
superstores from New York to Los Angeles, Golfsmith has
grown to become the only true national golf retailer. That
growth has been powered by the company’s multichannel
retail strategy, which combines brick-and-mortar
stores with a strong online presence and contact center
operations for the ultimate golf shopping experience.

In the end, the GMT Planet workforcemanagement solution provided the best
fit for Golfsmith’s specific multichannel
retail challenges.
As the company’s physical stores, product and service lines
and sales figures continued to grow, so did Golfsmith’s
operational sophistication and complexity — particularly
in the brand’s contact center operations. The company
continued increasing the volume of catalogs mailed to its
customer base — up to 30 different catalog drops a year,
,along with offers and promotions through online and
e-mail channels — the volume and types of calls flooding
into the contact center grew in both raw numbers and sheer
unpredictability. Each catalog or promotion generated
its own demand curve, and as the number of offers grew
and overlapped, it became increasingly challenging
for contact center managers to plan their workforcemanagement forecasts and schedules. Compounding the
scheduling challenge, contact center staff comprised a
large percentage of part-time students and senior citizens
with limited scheduling availability.
As a result, contact center managers found they had
overscheduled the number of agents at any given time,
resulting in overcapacity and unnecessary labor costs,
despite dedicating more than 30 man-hours each week


to forecasting and scheduling on a Excel-based system.
Worse, without the ability to accurately forecast call
volume on a day-to-day basis, they often were understaffed.
The inadequate staffing led to a spike in time-to-answer
rates and call-abandon rates, ultimately translating to a
degraded customer experience, lower brand loyalty and
lost revenues.
“We at Golfsmith pride ourselves not only on providing
our customers with the most innovative golf products
and the greatest value in the golf retail industry, but also
on delivering the most reliable and responsive customer
service in the industry,” said Kody Sweet, director of
guest experience for Golfsmith. “And as our sales and call
volumes continued to grow, it became clear to us that we
had outgrown our old workforce-management systems
and processes in our call center and needed to upgrade to
a more sophisticated and cost-effective way of accurately
forecasting calls and scheduling agents.”

Solution
During the due diligence process of understanding
workforce-management solutions and evaluating leading
vendors, Golfsmith narrowed down its evaluation to three
vendors: GMT, IEX and Blue Pumpkin. In the end, the
GMT Planet workforce-management solution provided
the best fit for Golfsmith’s specific multichannel retail
challenges. Specifically, Golfsmith highlighted GMT’s
capability to precisely forecast call volume by digesting
and analyzing the demand and timing of calls generated
by the brand’s complete array of catalog drops and other
marketing campaigns. As the only solution provider with
these “campaign forecasting” capabilities, GMT helped
Golfsmith address the challenge of matching supply of
agents with the ever-changing stream of calls.
The GMT solution gave Golfsmith the ability to forecast
call volume and create detailed staffing schedules with
a greater degree of accuracy. GMT Planet achieved this

24


degree of accuracy by capturing Golfsmith’s historical
data, such as expected conversion rates and other key
data points. By walking users step-by-step through a
series of questions such as, “How many orders are you
expecting this week from X campaign?” and analyzing
past catalog drop and resulting call patterns, Golfsmith
generated its first GMT-enabled forecast based on discrete
15-minute scheduling intervals. In fact, the schedule was
so detailed that managers were skeptical that the forecast
was accurate, believing that the staffing would be “too
lean” and would result in unacceptably high hold time and
abandonment rates. After much discussion, they decided
to go with their manually created staffing plan, based on
years of experience using their previous planning system.
At the end of the period, management compared the two
forecasts with their actual call logs and was surprised to
discover that GMT’s projected forecast was more accurate
than their experience-based forecasts, providing the
first piece of support for the GMT-powered workforcemanagement solution.

GMT Corp. is a leading provider of workforce-management
and performance-optimization solutions that enable companies
to improve customer service and sales while decreasing labor
expenses. Deployed in contact centers, branch offices or back office
departments, GMT’s products combine precision forecasting
and intelligent scheduling with analytics and performancemanagement tools to deliver a rapid return on investment.
Products include GMT Planet, the company’s flagship workforceoptimization solution; GMT On-Demand, its SaaS workforceoptimization solution; and SureServices, an award-winning
client care methodology. Enterprise clients benefitting from
GMT’s solutions include BB&T, PRC, Alpine Access, Golfsmith,
AirTran Airways, World Travel Holdings, Bank of the West,
Zions Bancorporation, Ingenico, West Midlands Police, Contact
1-2-1 and Yarra Valley Water. The company is privately held with
headquarters in Atlanta and offices in the U.K. and Australia.
For more information, visit www.gmt.com. Follow GMT on
Twitter: www.twitter.com/gmtcorporation.

Soon, GMT Planet was at the core of Golfsmith’sr
contact center forecasting and scheduling — driving the
creation of precise staffing schedules based on factors
such as predicted call volume by 15-minute intervals,
agent schedule availability and skill sets). Furthermore,
Golfsmith reports that GMT Planet’s forecasts and
reports have grown more and more accurate as the system
captures additional data points from which to calculate
forecasts and staffing models with even greater precision.
Building on the success and high degree of control over
its forecasting and scheduling processes enabled by GMT
Planet, Golfsmith also decided to add teleworkers) — a
new category of agents in addition to full-and part-time
staff — as its expands operations. The company also has
deployed the solution in its nationwide network of retail
superstores and back office operations.
“As we ramped up the learning curve, we became more
and more impressed with GMT Planet’s powerful range of
capabilities and found ourselves continually asking, ‘What
else can this system do for us?’” Sweet said. “I simply can’t
imagine going back to our old system.”


25

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