Shop.org Forum Addresses Multi-Channel Retailing

By JULIA FEIN AZOULAY — April 01, 2003

Multi-channel retailing was the focus of the Shop.org 2003 Members' Forum held Jan. 15 in New York City, where speakers discussed 2002 holiday e-tailing results and strategies for improving the online shopping experience.

Search and navigation solution providers were among the event's exhibitors, offering tools for customer-satisfaction response and consumer behavior analysis. Solutions for electronic payment verification and credit card fraud prevention also were featured.

Attending the event were more than 200 "friendly competitors," as Ray Greenly, Shop.org's vice president of research described them, representing such e-tail power players as Lands' End, Coldwater Creek, QVC, Nike Retail, Target Corp., Victoria's Secret, Nine West and Talbots as well as Yahoo, AOL and LookSmart.

Shop.org, a division of the National Retail Federation, cited a recent Shop.org/BizRate.com online holiday mood study, which found that 49 percent of online consumers claimed an increased level of online shopping this past holiday season and 84 percent were "somewhat" or "very" satisfied with their online experience.

Kirthi Kalyanam and Dale Achabal of Santa Clara University moderated a panel on multi-channel strategies, urging that "true multi-channel advantages will be realized when the organization engages in strategic blending of key assets across value chains."

"Few organizations to date have comprehensively leveraged key linkages," Achabal observed. He pointed to two types of linkages: "linkages driven by the customer, across channels" and "back-end linkages, where one channel creates value for another."

Achabal advised retailers to consider a variety of factors in developing multi-channel strategies, including consumer expectations, assortment characteristics (i.e., the mix of branded vs. private label, price points, product line breadth and SKU intensity) and company structure (i.e., its fulfillment capabilities and margins vs. asset intensity).

Further developing this discussion were panelists Joan Broughton, vice president of online and direct sales, Recreational Equipment Inc. (REI); Gene Domecus, senior vice president, e-commerce, Macys.com; and Denise Incandela, senior vice president, business development, Saks Direct, Saks Fifth Avenue.

"REI employees are very passionate and participate in the outdoor activities the Web site supports," said Broughton. "[Their] educational capability was a big part of REI's strength, [so we] included a strong educational component on the Web. People expect advice and product intelligence."

One distribution site serves both REI's stores and direct sales, and all REI channels use the same support centers to ensure a consistent experience for consumers. Broughton noted that this past August REI introduced in-store pick-up for items ordered online, and saw a 700 percent surge in boat and kayak orders from August to December. REI implemented the Oracle9i Database with Real Application Clusters to power this multi-channel retail experience.

Ultimately, Achabal and the panelists echoed basic retail wisdom brought forward into the e-tail era. As Achabal concluded: "Companies in this environment need to build customer-centric organizations. Having a multi-channel presence doesn't mean you have a multi-channel strategy."

JULIA FEIN AZOULAY is an Apparel contributing author. Based in New York, she may be reached at e-mail: JAzo478796@aol.com.

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