Market Focus: E-Retail: Buying Into the Customer Experience

It's become progressively harder for retailers to compete based on price over the past few years. Retail subsegments in crowded marketplaces have seen low-cost online pure plays and big-box stores with substantial supply chain efficiencies continue to pick up steam with consumers. A growing number of retailers, however, are waking up to the importance of creating a seamless multichannel experience as a vital part of their tool kit for competitive differentiation. With "customer centricity and experience-based differentiation taking center stage within retailers' initiatives...it is about creating a much more engaged relationship with consumers around the brand and really responding to the needs and desires of customers," says Tamara Mendelsohn, a senior analyst on Forrester Research's e-business team. Part of the battle with meeting and surpassing customer expectations lies in how well retailers service customers through various touch points like the phone, physical store locations, catalogs, online stores, and chat sessions. "One of the biggest challenges in multichannel retail is aligning customer data across channels so retailers can have a picture of how their consumers are interacting with them not only in one channel, but across all channels," Mendelsohn says. "A key initiative for many retailers both last year and continuing through 2007 is consolidating or at least integrating their customer data stores." This is especially important as more consumers leverage the Web for researching and buying products, and engage in cross-channel activities--for instance, buying an item online, but wanting to return it in a brick-and-mortar store. "Customers want to have clear visibility into the products and services that are available regardless of what channel they are [using]," says Jim Bengier, director of global industry marketing at Sterling Commerce. Some retailers are also turning their attention to guided selling tools, solutions that can enable customers to easily find and buy products that meet their needs in a self-service environment. Guided selling packages can also boost sales agents' ability to present the right products at the right time, which can increase cross- and upsell rates. "Guided selling is now becoming a lot more important as companies offer highly configured products," says Ken Ramoutar, Sterling Commerce's director of product marketing. Analytics technologies are also gaining traction, as more retailers look to leverage their customer data and create more personalized experiences. Using personalized tactics coupled with mass merchandising initiatives, which can include picking the right products that go into a specific store, is another viable component of retailers' CRM strategies, says Hung LeHong, a research vice president at Gartner. "If you think CRM is just one to one, for some retailers it just doesn't work." Top 3 Vendors in E-commerce: ATG Comergent IBM Source: Beagle Research Knitting Together E-Commerce Excellence Like many retailers with a brick-and-mortar presence, Jo-Ann Stores, a national specialty retailer of crafting, decorating, and sewing products, wanted to craft a personalized online shopping experience for its customers. But with more than 40,000 products (the company now has more than 50,000 products) across more than a dozen categories, weaving an online store into the mix that would enable customers to easily find, preview, and buy products was no simple undertaking. E-commerce and direct marketing solutions provider Idea-Forest, which owns and operates joann.com, launched an online store built on ATG's flagship offering, ATG Commerce. The deployment has allowed IdeaForest to marshal the site based on product categories, essentially managing each like an individual business company under the Jo-Ann brand, according to ATG. The promotional upsell and merchandising features of ATG Commerce let IdeaForest present customers with relevant offers that paralleled their interests. The results are hard to ignore: IdeaForest has increased visits to joann.com by more than 64 percent over the past year and has moved from less than 50 percent of online customers carrying out their transactions to more than 90 percent now completing the sale. While the retailer's Web site first hit the Internet in 2000, the company has bolstered its online footing in the past two years. For instance, in 2006 Jo-Ann kicked off its implementation of the latest installment of ATG Commerce; at press time, the company was about a week away from completing the upgrade. "We're trying to make it as easy as possible for [our customers] to navigate the site," says Juan Gonzalez, director of IT at joann.com/IdeaForest. "Our key thing is to help the customer in however many ways we can." --C.B.

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