From Brick and Mortar to the Web and Mobile Devices:
What’s Your Channel Integration Strategy?
Remember the good old days when customers walked through a physical door to conduct their business? Back then companies used to take the time to get to know their customers, train their staff, and provide the right products at the right prices. Companies were in total control.
Customers loved the service that firms provided, but demanded greater convenience. Knowing that it was impossible to keep stores open 24x7, firms developed machine surrogates to extend the services provided by staff. Impressed with their brilliance, companies then started to believe that those machines could also improve efficiency and reduce costs, so they multiplied their retail footprint by placing these automated machines everywhere.
Though barely comfortable with automation, the next frontier of channel integration demanded that companies quickly confront the growing influence of the web. The web provided enhanced convenience, self-service and cross-sell capabilities. It also provided an opportunity to create “stickiness” to retain customers. However doing business online also presented challenges in terms of enterprise control, security, technological capacity and data integration.
The increasing popularity of cell phones seemed to grow in tandem with the influence of the internet. Telephony capabilities within call centers raced to match demand as companies began to field calls around the clock—demand spurred by our continuous online availability.
As the demand for even greater convenience continues its steady march, companies are off to the races again with new ideas and development for the integration of mobile devices as the newest business channel. Mobile device integration is especially complex given the variety of devices, demand for real-time data and security needs. This new and demanding channel is again challenging our integration capabilities.
The mobile devices themselves add a level of complexity by increasing the expectation for real-time, integrated data. It is increasingly difficult to “mask” internal processes and data that are not integrated. While similar challenges have been encountered before, it has never been at such a rapid pace, nor with such demanding customer expectations. If all of this seems overwhelming, imagine dealing with such channel integration issues in the midst of a merger or at wildly successful company where business is doubling or even tripling. Is your company ready?
Perhaps your company is not growing rapidly, but simply struggling with maintaining consistent and rationalized supply chain operations across its different channels. What would be the ramifications of one channel providing different products, pricing, or eligibility than another channel? The answer is that given that customers are sophisticated and often use multiple channels, they will quickly find any inconsistencies. Such issues impact your brand and customer service functions, and create a situation whereby customers can shop your channels to their advantage. Instead of creating a loyal customer, a transaction shopping monster has been created.
Rather than reacting to the emergence of each new channel with its inherent complexities, the most successful companies maintain a channel strategy. An effective channel strategy requires consideration and articulation of the answers to the following questions:
- What are your firm’s channel integration objectives and priorities?
- How will the creation and leveraging of shared data be enforced?
- How do your firm’s channels align with your customer segments?
- What are the product, pricing and eligibility rules by channel?
- How will your firm incorporate self-service?
- How can customer’s information and preferences be leveraged to provide unique service?
- How is customer experience impacted by the integration of the business?
- What is the cross-selling strategy and preferences?
- How are incentives aligned with your channel strategy?
For companies that have already implemented a channel integration strategy, this list sounds obvious. For the companies that have not, it sounds overwhelming. Developing a strategy demands sponsorship from channel and line of business leaders, marketing, operations and customer service. Companies often choose to engage an outside consulting firm that brings experience and objectivity to help lead through the inevitable tough choices.
Without a doubt, the technology underscoring channel integration is very complex. Looking back at the history noted earlier, firms have often been reactive in channel integration considerations and their systems, data and processes reflect that fact. While it is possible to “mask” the gaps in technological infrastructure with smart technology designs, it makes execution even more complex and only goes so far.
Every firm needs a channel integration strategy. No exceptions, no excuses, and no delays. Given that channel integration is such a large effort, one approach is to create an umbrella strategy and then drive the upgrades/implementations in a phased approach. Recognizing the relative newness of the mobile device channel, a practical approach could be to first create your overall strategy and then extend that strategy to the mobile channel to drive the right prioritization, business model and technological approach. While channel integration is complex, it is an issue that will not go away and will only become more complex over time. Is your company ready?