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With mid year approaching, I hope that this year turns out to be your best ever. One thing that will certainly help make that hope a reality is multi-channeling.
When the Internet first became available as a selling tool, retailers and marketers both tended to establish two distinctly different operations: online and bricks-and-mortar. Each operated independently of the other, even to the point of keeping separate sales and inventory records.
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But as time has gone on, the online shopping experience has grown and matured. It has become apparent that the two not only complement, but feed off of one another. It is the ultimate symbiotic relationship. Both have distinct sales, marketing and development agendas; there are no one size fits all approaches. The experience must be seamless, or the consumer will abandon it for a more convenient competitor. On the other hand, success in one often leads to success in another.
Take Nordstrom, for example. Several years ago the company—one of America’s most venerable retailers—realized that multi-channeling was key to their survival and committed $150 million to a three-year upgrade of their Web presence, in effort to achieve a seamless multi-channel experience across Web, catalog and bricks-and-mortar.
The result? Nordstrom profits soared almost 24% for the first three quarters of fiscal 2006 to $446 million. For the entire fiscal year ending in early February, the company projects earnings per share of $2.46 to $2.51. In 2005, that figure was $1.98 per share. Responding to the strong profit picture, the company’s stock went up more than 30% in 2006.
The lesson here is that the company projected for the future before it became the present, identified a challenge and implemented a proactive solution. It took a large financial commitment, but the improved bottom line shows the wisdom of the company’s approach.
More importantly, the company did not neglect old style bricks-and-mortar selling. While upgrading their Internet shopping experience, the company offered store-based events, such as by-invitation-only private shopping nights for their Rewards customers. These special nights came complete with refreshments and other perks, the intent being to tell its customers that the company cares about them. Obviously, the compliment was returned.
For a specific example of how multi-channeling can help in beauty retailing, cast your eyes across the Big Pond to England. In reaction to studies indicating that 60% of males were bewildered by the vast array of choices available in female perfumes—the consensus was that respondents would choose the safe route by purchasing a bottle of their ladies’ already preferred brand—Boots created the Fragrance Finder, a tool that categorizes perfume according to its scent genealogy. Seeking increased sales, the company had to make marketing fragrances simpler for men, in order to allow their comfort zone to expand along with his buying experience.
The Fragrance Finder displays the relationships between perfumes in a visual manner, to make it easy to understand linkage. If a woman’s favorite scent is lilac, the Fragrance Finder indicates fragrances that utilize lilac, thus allowing the male to venture beyond the comfort zone of the same old thing, yet remain within the predetermined aesthetic.
Boots then took the idea to the next logical step and multi-channeled it, by making the Fragrance Finder available both online and in-store, resulting in 50,000 unique user visits to the online Fragrance Finder site and in-store response so strong that the Finder will be available year-round, not just at strong fragrance sales times, like Valentine’s Day.
The above is a classic example of marketing and multi-channeling working together. Boots had a fragrance marketing challenge, which it not only solved, but multi-channeled the solution to get maximum benefit.
What if you don’t have a bricks-and-mortar presence, but still want to multi-channel? Personal care powerhouse Avon faced this situation, and came up with a fascinating solution. The company offered its sales reps the opportunity to create their own individual online stores. Each store features the representative’s photograph, along with a button for easy customer contact. In effect, it’s similar to having the rep at one’s home 24/7.
At the individualized online store, customers can determine if they want their order delivered by a rep personally or mailed—thus maintaining the personal relationship that is at the heart of Avon’s success. The customer’s invoice contains their local rep’s information, thus making it seem that it was ordered right around the corner.
This is yet another example of multi-channeling, reinforcing once again a standard idiom of marketing in today’s world: Adapt or perish. It may not have quite the zing of “survival of the fittest,” but if Darwin was involved in the personal care industry today, he would understand the meaning perfectly.