Keys to Multichannel Success

Although better Web design and a wider selection of products offered on-line
are important, the keys to multichannel success lie in understanding the
factors that drive revenues and the ability to fulfill Web orders. Overall
revenues are driven not by simply offering products via the on-line
channels, but by creating a hybrid sales model that uses the Web and other
more traditional channels, including phone, TV, and the old fashion
"brick-and-mortar store". The hybrid model needs to be done in a mutually
beneficial way to maximize profit from these different retailing models.
The ability to fulfill requires a strong infrastructure, in terms of IT
systems, traditional physical stocking, warehousing, picking, and shipping
practices. Some retailers like Best Buy have well grasped the innate
differences between virtual and physical storefronts and used technology to
t it away for the customer just before the customer is told to come and
pick it up.
A good Web site design is one that has streamlined site navigation, search,
and checkout processes. It enables the kind of sales process that best fits
the customer's and retailer's needs. It will have good site performance, and
a well-designed user interface. Indeed, one will never achieve proper order
fulfillment without a self-evident navigational structure, the right search,
help, linking of the site to the support center for synchronous user
support, etc. Front-end business-to-customer (B2C) e-commerce success also
requires good product information and pricing, because it is easy for
Internet customers to comparison-shop. A $2 or so difference in the retail
price of a DVD can have a large impact on sales volume when the competition
is only one click away.
But nothing has hurt the adoption of multichanneled shopping more than
delayed or even cancelled orders because of stock-outs. Many retailers are
thus striving towards near real-time cross-channel inventory management and
visibility to mitigate this conundrum. For example, sold-out items are
automatically grayed out on the screen while the back-order functionality,
allowing the customer to agree to a back order, proactively alerts customers
when the product is available again. When retailers design their processes
to take advantage of the multichannel sales opportunities instead of simply
focusing on reducing costs, a strong infrastructure that supports on-time
delivery of orders and handling of returns must be built.
A few years ago highly publicized B2C Internet retailing disasters were
typically not driven by bad Web site design, but were rather caused by the
inability of several prominent retailers to deliver the goods in a timely
manner. It was often the link between the Web storefront and the companies'
traditional back-office and ERP systems, and real-world distribution systems
that caused the problems. Multichannel retailers must be able to flawlessly
execute a full range of services to engage, transact, and fulfill Web-placed
orders. Hence, the most successful multichannel retailers of today have to
either build a complete set of such services in-house or outsource some or
all of them.
Traditional brick-and-mortar retail stores still rely on store clerks and
managers to support customers, while multichannel retailers must provide
similar support via call centers that are adequately staffed (so that
customers do not have to be on hold for too long periods) and that are
available around the clock. There should also be a number of appropriate
financial services available, such as payment gateway, merchant account,
fraud screening, and business payment services. For more information, see
Differences in Complexity between B2C and B2B E-commerce.


Source : IPOMS.