E-Commerce Customer Experience 3: Search Tuning - People and Process

Post series written by Matthew Lynch (Senior Consultant at Charteris specialising in eCommerce). Before joining Charteris Matthew worked for IBM on various eCommerce enablement projects across multiple industries from the late 1990's through to the present day.
This series of blogs is about how product managers in an eCommerce business can influence and optimise the customer search experience on their website by tuning the on-site search engine.

Tuning search is like servicing your car; omit it and you risk losing value and breaking down. Get the habit and the right people
In the last blog entry, we covered what search tuning was and why it was important to do it in order to optimise the customer search experience on eCommerce websites. In this blog entry, we will explore the process that businesses should consider implementing in order to keep up-to-date with their search tuning.

Servicing your car is a chore, but most of us do it. Why? For peace of mind; perhaps to ensure you optimise its resale value, to prevent the inconvenience of breakdowns and to keep it safe. The same goes for search tuning. If you don’t tune your search regularly, the value of the search experience (and hence your eCommerce site) will reduce or may even breakdown (if customers can’t find product). Also, like skipping maintenance on your car, skipping maintenance on search means that you won’t know if anything is wrong and you won’t be able to predict when the reduction in performance or breakdowns might occur. Search tuning doesn’t need to be an onerous process either, as long as it’s done regularly, it shouldn’t need to take long.

Search tuning isn’t everone's forte.

Given the apparent technical nature of the task, you might be inclined to give it to your help desk, your web designers or your admin staff. Whilst their skillsets might fulfil two of the criteria required of the search tuning process : ‘attention to detail’ and ‘discipline’, they may not be able to adequately fulfil the key requirements of ‘product knowledge’ and ‘good language skills’.

Attention to detail is a desirable trait because, whatever tuning you do, if you do it wrong, it can be worse than not doing it at all. For example, if you mis-spell a synonym (e.g. you enter bart->kart instead of cart->kart, not only have you not corrected the customer’s problem that the synonym was supposed to resolve, but you have potentially created a new problem for the customer as well (people searching for Mario Kart won’t be satisfied AND those searching for Bart Simpson will be shown irrelevant products relating to Mario Kart as well).

Like attention to detail, discipline is important to ensure that search tuning is done regularly enough to catch problems before too many customers have experienced them and to ensure that any changes to search tuning are tested to make sure that they have the desired effect. The regularity of tuning will depend on the size and regularity of changes to your product / content catalogue and also the number of customers hitting your website. Once under way, you’ll get a feeling for how often you should be search tuning from the number and frequency of problems identified in the search reports after the initial set of search tuning sessions. You will have a bunch of things to fix when you start, then the number should settle down. Omitting to test changes means that you don’t know if you’ve actually made the experience any better and, just as importantly, you don’t know if you’ve inadvertently made it any worse. Testing is straightforward: check the search results on your website before making a change and compare it after tuning.

With the general skills sets out of the way, consider the two key specific skills your search tuning staff ought to have...Product knowledge is a must have. Without it, you won’t be able to pre-empt some problems let alone deal with ones that are identified in the analytics from your search tool.
For example, if you’re not into video games, it unlikely you would know that people using ‘wow’ or ‘cod’ as a search terms on the games retailer’s website were searching for the game titles ‘World of Warfare’ and ‘Call of Duty’.

Choosing someone to perform search tuning who has good language skills is probably a no-brainer, but should be kept in mind all the same. Knowing the difference between a noun, verb, adverb, adjective etc is useful as is the ability to spell and recognise the likely intended meaning behind search phrases that customers are using. If your website is represented in more than one language, if you can, get native speakers doing the search tuning, because they will have a much better feel for how their language is currently being used.

Prevent and react to search issues
Depending on the nature of searchable content your product or content teams are adding to the website, you may be able to prevent some search problems. There’s no harm, for example, in adding synonyms for words that are in the dictionary or synonyms between unique product acronyms and the full product title. With practice and analysis of your product set, you may find others as well.

That said, beware of doing search tuning for the sake of it. As mentioned before, it can be quite easy to make things worse than they were by being overzealous tuning search before you have seen any problems in your search reports.

Business-as-usual tuning

You should analyse your search analytics frequently for search terms that return zero results and search terms that return large numbers of results. Analysis of the zero results report should reveal acronyms, misspellings and typos that you should account for in your synonym database. It may also reveal searches for products that you don’t have for sale.

Search terms that result in too many results could be an indication of the term containing a word that occurs so frequently, it should be ignored or an indication that you should instruct your search engine to ensure an exact match ‘enforcing a phrase match’, thereby excluding partial matches from the list of results.

Consider tuning as new products are added to your catalogue. You may prevent problems occurring, for example, by adding known acronyms as synonyms. Again, beware of being over-zealous because adding unnecessary synonyms to your thesaurus just means there’s more work for the search engine, more to clean up later and more potential for incorrect entries. Let the analytics of real customer behaviour drive your main tuning activities.

As mentioned before, testing needs to be an integral part of the tuning process so that you know the effect of changes you make.

Search tuning housekeeping

Finally, bear in mind that, just because a synonym or enforced phrase worked at one time, doesn’t mean it will stay useful forever. This year you may setup a synonym of touch -> “ipod touch” because the “ipod touch” is popular right now and you know that there’s a lot of searches just using the word “touch”. However, at some point in the future the search term “touch” could be used in a completely different context by customers, hence the need for periodic reviews of your search tuning.


This concludes this set of blogs on search tuning.
---------------------------------------------------
Contact – matthew.lynch@charteris.com

E-Commerce Customer Experience 2: Search Tuning - Techniques

Post series written by Matthew Lynch (Senior Consultant at Charteris specialising in eCommerce). Before joining Charteris Matthew worked for IBM on various eCommerce enablement projects across multiple industries from the late 1990’s through to the present day. 

This series of blogs is about how product managers in an eCommerce business can influence and optimise the customer search experience on their website by tuning the on-site search engine.

The search engine doesn’t know what it doesn’t know

You may already have a facility that helps you improve on-site search for your customers.
It should have been setup with an initial “dictionary” to make sure that it works well at go live.
But, after go-live, how can you make sure it continues to work for you? After all, you’ve got new products coming on-line all the time and you want to ensure your customers can find them.

Search engines only know what they’re told

Without manual intervention the search engine is only as good as the in-built auto-correction function (to deal with typos, mis-spellings), the default dictionary, any content that it knows about and ‘domain-specific’ dictionaries which, if vendor supplied, are likely to be quite generic.

Search tools are not necessarily aware of common mis-spellings, typo’s, domain-specific acronyms / phrases, what customers will actually search for in real life or other common language in the industry sector. They will also not be aware of specific key phrases or made-up product names that exist in the product catalogue that have specific relevance.

Also, language use evolves over time, sometimes quite quickly (often as a result of creative marketing or journalistic minds), so there’s no way that a search engine is going to keep up-to-date without human intervention.

Regular search tuning improves the bottom line

Search tuning enhances the relevancy of results, reduces the number of zero results found and helps identify application configuration and design changes that may be required. The process of search tuning is also another way of keeping you in touch with customer trends. All of these things help to improve the customer experience ultimately leading to improved conversion, basket size and customer loyalty.

The business, not IT is best placed to perform search tuning

If your business is not tuning its on-site search engine, then it may not know how many customers are having trouble searching for your products on your site. Many people assume that the search engine belongs to and is maintained by IT. You might think that your SEO strategy and keyword-promotions ensure that customers can find your products using Google, Yahoo etc, but if you’ve got any direct-loaders (people who go straight to your site and then use your site’s search facility) then they need their searches to be looked after by the business, the guys who understand the products and how they are marketed and sold to the customer.

Consider who owns the customer relationship. The business doesn’t get IT guys to write the product titles, descriptions, retail reviews or marketing copy, so why should the business rely on IT, when search engines deal with words that customers are looking for in the very text that has been created by the business?

Use analytics to identify search tuning needs

In eCommerce, many people will have come across a “top-search-terms” report from the web-analytics tool. This, generated regularly, can form the basis for search tuning. For best use, it needs to report the popularity of search terms together with the average number of results returned and needs to show search terms with zero results. In addition, it is useful to have a report showing you search terms that have been autocorrected.

Tuning affects which words and phrases the search engine considers or ignores

Search tuning involves telling the search engine how to handle words and phrases that it may not ‘understand’ or that it may assign more or less relevance to than desired by the business.

Stop words
In most circumstances, there’s no point in a search engine searching for words that are so common that they appear in large numbers of product titles or descriptions. It results in too many, often irrelevant, results for the customer and wastes the search engine’s resources in matching them. Typically these words include ‘a’, ‘an’, ‘of’, ‘the’ ‘i’, ‘is’ etc but the business really ought to work out for itself which words are so common that the search engine should ignore them. This may include some words that are core to the product set being sold e.g. a entertainment retailer might get the search engine to ignore DVD, CD etc. Be wary of adopting the standard set provided by the search tool vendor. For example, a ‘stop word list’ provided by a search tool vendor may include the word ‘that’, but for a CD retailer, this would not be an appropriate stop word if it meant that it made searches for CDs by ‘Take That’ of lower relevance than results that don’t contain the word ‘that’. Try it, you’ll find there’s a band called “Take”.

Synonyms
It is estimated that 20-30% of all search terms used on the internet contain a mis-spelling or a typo. If that is the case and your search engine doesn’t manage to autocorrect them or the typo is on a made-up word such as a brand or product name, then your customers will get zero results, the dreaded dead-end.

The solution; find out the terms that customers are using that return zero or few results and setup a synonym to the term that does match products.

Some examples where you would use synonyms include :
- Numbers – equate 2 with ii and two
- Acronyms – to equate product-acronyms with the full product title
e.g. LOTR -> Lord of the Rings
- Common mis-spellings e.g. cart <-> kart
- Made-up product titles with spaces taken out e.g. (wii) motion plus = motionplus
- UK / US spellings (if not auto-corrected) e.g. color <-> colour, metre <-> meter,

Enforced or Automatic Phrasing
If your customers are getting too many results for certain search phrases, of which you find that many are irrelevant, then you should instruct your search engine to only consider results where there is an exact match to the phrase (words and their order).

e.g. "32gb ipod touch" - assuming you didn’t want the search engine to return 4/8/16gb ipods or ipod nanos in the results set)

Stemming
Good search engines take verbs, adjectives and adverbs that are used in a search term and condense them to their ‘root’ form or ‘stem’ (e.g. running -> run, richer -> rich, strongly -> strong) before comparing them to the content to be searched which has also been ‘stemmed’. Search engines often come with stemming built-in but if problems are identified using the search analytics, then additional stemming ‘synonyms’ or rules will need to be added. The process of getting to a word stem is language dependent and may require the skills of an experienced linguist if adjustments need to be made.

Search keyword / phrase Redirects
Sometimes it is desirable to redirect a customer to a hub or landing page that makes the best representation of a product or product set that the customer is looking for. This gives the customer a better experience than the presentation of a product list (which may well not show the full range of potential product type matches on page 1).
It is a common occurrence for customers to search for types of products e.g. Romance films, so a redirect for such types of search would be a good idea.

It is good practice to monitor for new occurrences of such searches and setup a search term redirect for the phrases used. Good search engines provide a facility for recording such redirect phrases with the desired destination such that the search engine provides redirect URL destinations to the eCommerce website when such phrases are matched.

In my next post we will look at what’s desirable to look for in people who will perform search tuning and how the tuning exercise can be organised
---------------------------------------------------
Contact – matthew.lynch@charteris.com

E-Commerce Customer Experience 1: Search Relevance - Ranking

Post series written by Matthew Lynch (Senior Consultant at Charteris specialising in eCommerce). Before joining Charteris Matthew worked for IBM on various eCommerce enablement projects across multiple industries from the late 1990’s through to the present day. 

This series of blogs is about how product managers in an eCommerce business can influence and optimise the customer search experience on their website by tuning the on-site search engine.

Get your search engine to understand your customers’ language
Is your site conversion in need of improvement? Do too many of your customers drop out of the funnel early on? Do they consistently find what they’re searching for on the first page or two of search results? Do you have feedback from customers saying they find it difficult to find what they want on your website?

If the answer to any of the above is yes, you may need to make it easier for your customers to find product. In other words, you may need to actively tune your search engine to suit the way your customers search for product.

Search results - What’s relevant?
Search is search is search isn’t it? That’s what some people think; “surely, if we implement the ‘best’ internet search application, that’ll solve the problems we have with our poor search relevance won’t it?”On-site search for an eCommerce website is not an exact science and is certainly not best served by a generic internet search tool. The main reason for this is that what a generic search tool considers ‘relevant’ will almost certainly not be close to what you or your customers would consider relevant search results for your eCommerce website.

For example, what would product managers think if the products appearing at the top of your search results page were just those with the most matches to the search keywords, sorted by price alone? It is unlikely that this idea of ‘relevance’ would meet their or your customers’ sophisticated expectations.

The answer lies in defining what ‘relevance’ means for your customers and getting your search engine to return results that get as close to that definition of relevance as possible. Relevance may well vary in your business according to the type of customer or type product / service that is being sold. For example, relevance could mean ‘popular’ or ‘most recently released’, ‘capable of being delivered soonest’, ‘most highly rated’, ‘highest converting’ or any number of other things depending on the nature of your business, product or customer base.

Taking a simplistic view to illustrate the point, let’s consider that there may be three types of visitors to a retail website : a) customers who know what they want and have a specific item in mind b) customers who have an idea what they want but want to compare products before making a choice and c) customers who have no real idea and are just browsing.

Relevance for customer type (a) is likely to be very focussed on as close a match as possible to their search term in the product title. Relevance for customer types (b) is likely to be product or product content whose title and category have the best match to words in the search term entered. Relevance for customer types (c) is likely to be product or content whose categorisations have the best match to words in the search term entered.

For a retailer of DVD’s, therefore, customer (a) might enter a search term such as ‘Temple of Doom’, customer (b) might enter ‘Indiana Jones’ and customer (c) might enter ‘Adventure movie’.
If your search engine hasn’t been configured with appropriate relevance ranking strategies, the results may not be what each type of customer expects. Taking the simplest model of ‘relevance’ where purely the number of matching search words determine the relevance, you could end up with something like this :“Temple of Doom” ->
1. The Little Princess: Shirley Temple DVD - the word Temple appears lots of times in the product description
2. Paul Temple (DVD)3. Doom the Movie – Doom appears lots of times in the product record
4. Indiana Jones : The Temple of Doom (ought to be at the top of the list)

“Indiana Jones” ->
1. The World’s Fastest Indian - title + lots of matches to Jones in the cast list
2. History of Indiana Basketball -lots of references to Indiana !
3. Indiana Jones : Raiders of the Lost Ark (1st film, so appears 1st)
4. Indiana Jones : Temple of Doom (2nd film, so appears next)
5. Indiana Jones : Last Crusade (3rd film, so appears next)

“Action Adventure DVD” ->
1. The Adventure of the Action Hunters
2. Lara Croft Tomb Raider: The Action Adventure
3. Operation Dalmatian: The Big AdventureHere, matches are on the product record in preference to the categorisation.

As you may see from the above examples, a search relevance ranking strategy that assigns different weight to product category and title in the product record over other ‘less relevant’ parts of the product record, ought to improve the relevance of results for the customer. In addition, a commercial weighting could improve the weighting for the business. For example, it could boost the relevance ranking of the more popular 'coming soon' or 'recently released' film releases e.g. putting the 2008 film Indiana Jones and the Kingdom of the Crystal Skull at the top of the list). Bounce rates should be reduced by making sure that the latest releases are always shown.

As well as weighting the elements of product records, tunable search engines allow you to determine the priority of search ranking schemes (algorithms) to affect the results. For example, the search engine might have a method A that scores results based on the number of search keyword matches per field and scheme B that scores results by the total number of matches across the whole product record. In many circumstances, a retailer would want the scores allocated by scheme A to have more weight that scores allocated by scheme B.

A methodical approach to improving your search relevance is recommended. This involves the following high level steps :

1. Define what relevance means for which customer types and product types
2. Measure your current site search results against the desired outcomes defined in step 1
3. Prototype and test different relevance ranking strategies in your search tool
4. Periodically measure and review your relevance ranking strategy to maintain the optimum outcome for the customer and your business

In the next blog entry, we will explore what you can do to tune a search engine to handle problems with specific words.



-------------------------------------------------------------------------------------------------------------------------------------------------------------

Contact - matthew.lynch@charteris.com

Customer Advocacy through Compelling Customer Experience

What percentage of value-add activity are you achieving in your customer facing operations?
If less than 80%, then it is time for action

How many of your front-line staff can answer the question “how have I added value to customer experience today?”If less than 90%, then there is too much wasted effort and higher than necessary costs

Do your customer facing people and systems consistently help & drive enhanced customer experience?
If you are not very sure then there is a compelling case for a “voice of the customer” review of your systems and processes

Are your customer-facing staff systems and product experts or customer problem solvers?
If just experts then they – and therefore your organisation – will benefit from being problem solvers

How do you spot and remove barriers to rich customer experience and people motivation? Find out about “voice of the customer” at www.charteris.com/what_we_do/customer_centricity/

Multi Channel Retailing - Putting the Customer First - Part 7 - Creating Agility......The end goal

Putting it altogether; the IT, the business organisation and a service oriented architecture, will provide a retailer with:

• an IT architecture that allows change, rather then dictating what changes can be made.
• a business that is geared to meet the needs of the channels and ultimately its customers
• a multi-channel platform that will last, adapt and perform

In summary, multi-channel retailers require agility and in delivering these key assets, a retailer can acquire the lasting agility that will differentiate them in the marketplace. Agility can be measured in many ways but there are some simple measures to consider in assessing just how agile a retailer really is. For instance, how long would it take to do the following:

• introduce a new range or products across one or more channels?
• open a new channel (such as a concession or mobile commerce platform)?
• react to a competitors promotion?
• introduce regional pricing and promotions?
• introduce differential pricing across channels?
• start marketing internationally

If the answer to any of these is “longer than my competitors”, then there is room for improvement. Taking the customer centric approach will shortcut many of the hurdles in assessing what needs to be done and partnering with Charteris is a firm step towards creating agility.

The Charteris Approach
At Charteris we define Customer Centricity as “the alignment of organisational structure, processes and technology to deliver products and services to internal and external customers in the most agile way.” Applying this to multi-channel retailing is what we do best and have wide experience in making this not just a theoretical exercise, but making it real.

Multi Channel Retailing - Putting the Customer First - Part 6 - The Customer Centric Approach

In gearing any part of an organisation to deliver a service, whether it be technology, system, process or people related, an understanding of the customer is vital. For example, a retailer who also provides white label channels has not only the end consumer to consider, but also the partner organisations to whom they provide white label solutions. Similarly, merchandisers, graphic designers and cataloguers servicing more than one channel can consider each channel as a customer. When an organisation starts to think along theses lines, about who their customer really is, then the implementation of a service led philosophy becomes an easier task. Underpinning this approach is taking a considered view of the customer in order to understand their motivations, behaviour, likes and dislikes.

Taking a customer centric approach enables each area to focus on delivering exactly what the customer wants. Critically analysing processes, systems and related functional areas and determining their effectiveness in delivering customer service is at the heart of the customer centric approach. Breaking down each element and step of a process and stripping out those that do not add value to the customer can create efficiencies and benefits across the organisation. In doing this, the multi-channel retailer can create a framework of services that is ultimately geared towards the customer rather than the requirements or functions of a particular channel or technology.

Multi Channel Retailing - Putting the Customer First - Part 5 - Business Architecture.....The afterthought

Structuring the operational model around the new architectures and solutions is often left as a last minute consideration in delivering any new system. Organisational structure and associated processes are vital in order to deliver the most customer focussed experience and service possible. Every aspect of the operational model needs to be visited and assessed to determine the value it actually delivers to the customer and ensure that the priority and focus is aligned to this strategy.

This is where the thinking around the use of SOA needs to break out of the IT box and permeate through the business functions and respective processes. This is where the hard questions can often be found and where the structure of business functions needs to be most challenged. However, the balance of dividing business functions amongst the selected channels as opposed to maintaining a centralised operational model is a real tightrope and one that can only be managed on a case by case basis.

Creating a business architecture by applying SOA principles is not an exact science in some respects is still in its infancy. Even considering the business and operational model as an “Architecture” is a step too far for some organisations. But, those that have embraced this philosophy have broken out of the traditional business models and created cross functional working units geared to providing services to their customers, whether internal or external. This approach not only is geared towards a value added customer experience but leverages the experience and expertise of the people within an organisation.

Multi Channel Retailing - Putting the Customer First - Part 4 - I thought SOA was just an IT thing!

From an IT perspective, the use of SOA (Service Oriented Architecture) is a logical fit to fulfil the multi-channel solution where core capabilities such as product, delivery, payment etc. are developed in such a way that they are created as services allowing for re-use across the enterprise. However, if the IT department is the only place where the SOA principles are adopted, then there can be no real alignment between IT and the business. Therefore, it is essential that the SOA blueprint is adopted throughout the enterprise rather than remain solely as just another IT acronym. In order to achieve this, the entire organisation must adopt SOA principles and the blueprint for this ideally is owned by the business. If the IT department alone is trusted in implementing the SOA architecture (as is so often the case), then the chances of the remaining parts of the organisation fostering the principles of SOA (and hence the benefits) are somewhat slim.

Multi Channel Retailing - Putting the Customer First - Part 3 - Surely, IT has all the answers!

So, the decision has been made to create a new architecture and it’s all hand on deck. Constructing the great new systems and solutions to support the multi-channel ambition is one thing, but there are many other considerations which are just as important. IT is undoubtedly the key enabler in this relentless march towards customer satisfaction, but it is truly only one part of the jigsaw. The creation of a technical architecture that is aligned to the operating goals is vital; less so is the selection of the exact technology as there are various products and technologies that can be blended together to form an effective solution. In addressing the architecture issue, the creation of a Service Oriented Architecture (SOA) is widely recognised as the best practice approach and one that dovetails into a customer focussed strategy.

The key benefits of SOA in a multi-channel strategy are one of re-use and the ability to initiate changes (to business or channel specific rules and functionality) without having a knock-on effect to all parts of the organisation. As discussed in my posts on the practicalities of multi-channel retailing, re-using components such as inventory, delivery and payment across the channels as services increases the efficiency and realises cost savings across the channels. However, the full benefits can only be full realised by creating a business logic layer across these services where specific attributes cater for the requirements of each channel. This is where such elements as price, promotions and catalogue are controlled and provide the channels with independence despite sharing a common data set.

The Practicalities of Multichannel Retailing -Part 5 - Delivery and Payment

Providing the entire range of products in the catalogue, in as accessible format as possible, strengthens the offering of a retailer no end. Providing a fully joined up view on delivery options including premium and store pick-up is a challenge in its own right as it dictates that stock management and whereabouts are completely accurate all of the time. Co-ordination of different delivery methods amongst numerous partners need to be effectively managed so that data feeds and access to order tracking is fully transparent for not only the customer, but also the customer service agents.

Now the customer is only interested in how they are going to get their hands on the merchandise but ensuring that they are not disappointed or misled is paramount in providing a great customer experience. This is an area where taking a customer centric standpoint is vital and in combination with a service led approach can reap enormous benefit. The result of these approaches should be the provision of choice to the customer in how to receive their goods in a timely, and convenient fashion. No one solution fits all but by centrally co-ordinating the delivery options as a repeatable service amongst the various channels will provide the required choice. This means that all channels can obtain the same delivery services whilst the management of them is centralised – not only efficiency “win” but also a customer “win”.

Payment is often viewed as just a step in the process and the eventual “closure of the sale”. In many ways, it gets overlooked with respect to the customer experience and it must be appreciated that this is the most painful part of the entire customer journey through any channel. To put it bluntly, consumers hate parting with their hard earned cash. Therefore, spending some time in making this as smooth as possible is certainly not wasted. If a retailer offers interest free credit of other financing initiatives, then it is imperative that these are not merely restricted to customers walking through a bricks and mortar outlet. Providing the ability to split purchases across more that one payment card for a single transaction (so long as there are strict fraud and security checks around the process) could be the difference between a sale and a lost customer. Such options do need careful assessment but exhibit a far more customer focussed approach.

Multi Channel Retailing - Putting the Customer First - Part 2 - The single view of the customer

Customer Service is the lynchpin behind a multi-channel strategy but it is so often cast as the fall guy in attempting to cobble together a solution from legacy systems. The “poor relations” in the call centre have been seen as the last resort to support the inadequacies of IT solutions in reconciling customer orders, refunds and returns. This behaviour towards a retailer’s customers is the antitheses of a truly customer centric approach and one to be avoided at all costs. Empowerment of the customer service agent by a robust CRM system is paramount in delivering quality customer service and can save both time and money if implemented correctly. More importantly, it can be the last resort in retaining a disaffected customer when systems or processes do break down. Providing transparent visibility across all channels, coupled with empowerment to view and alter order details is the very minimum functions that need to be provided.

But it really does matter!
It is having the single view of the customer, stored in a single data store that unlocks the true potential of multi-channel retailing in providing marketers with the data that enables customer behaviour to be analysed and utilised in driving forward the customer plan. Presenting the right offer at the right time can only be consistently achieved by getting a grip on the customer’s behaviour and developing this capability. Architecting the CRM strategy to achieve this must take into account not only the qualitative data about customer numbers and orders, but also combining this with less qualitative data such as web statistics and responses to marketing campaigns and Customer Service centre contact. Identifying the trends in this data empowers marketers to create campaigns targeted at specific audiences as well as allowing merchandisers to select appropriate products in the right channels.

The Practicalities of Multi-Channel Retail - Part 3 - Inventory (Stock)

Visibility of stock within distribution centres and fulfilment partners, as well as stock held locally in bricks and mortar stores, provides the customer with clearly defined options on where they can source the items they are looking for in either their preferred or alternative channel. Having the ability to directly purchase through a transactional website/telephone ordering system, or reserve stock at a local branch guarantees the customer is satisfied without them reverting to a competitor. This approach of guiding the customer to alternative channels in order to provide timely fulfilment is one of the key factors identified in retaining customer loyalty. There is not necessarily a right or wrong method for managing stock levels across channels, whether it is a federated or singular view within channels. But the most important feature of this is the speed in which stock can be made available between channels so that demand can be satisfied without the need for drawn out processes in transferring stock, whether it is physical stock, or merely logical partitioning in a warehouse.

The Practicalities of Multi-Channel Retail - Part 1 - A few fundamentals

The Practicalities of Multi-Channel

The “multi-channelness” of a retailer is only really determined by the ultimate ambition of the organisation coupled with the appetite for some serious change. Those early trail blazers that managed a seemingly coherent multi-channel offering often got there by smashing various legacy systems together by brute force in the pursuit of an integrated solution. Often, this meant some behind the scenes issues in customer service, delivery and order processing that failed to provide a single view of the history of an individual customer over multiple channels. The impact of this ultimately hit the customer at some point in preventing them from switching channels for returns, combining deliveries or tracking the statuses of orders. Ultimately, these legacy “smash-ups” present longevity issues by their very nature in that they are difficult to maintain, extend and above all, have problems scaling as demand for their services grow.

These issues are only resolved by initiating substantial change in the backbone of a retailer’s information system so that there is one source of the truth for critical product and process data such as:

• Catalogue
• Inventory (stock)
• Orders and Order History
• Returns
• Customer
• Delivery
• Payment

Providing this coherent and centrally managed view on both data and processes gears the organisation for efficiency. Consistent product information and management forms one part of Catalogue management but there is also a distinct need to better manage the whole product lifecycle from birth to grave with particular reference to performance across channels. This can only be achieved by having a single strategy in information systems, product induction, categorisation and reporting. As an end goal, this is a tough challenge to resolve as any major change in catalogue management is often unpalatable with the more established areas or channels. Legacy systems in these areas rule the roost and require substantial re-engineering to accommodate the demands of the newer routes to market. However, those retailers who endeavour to undertake this challenge and implement a successful solution can reap the benefits.

Multi Channel Retailing - Putting the Customer First - Part 1 - Why it matters

The business of retailing has undergone a transformation beyond all recognition since the widespread availability and adoption of broadband internet. This transformation has been largely dominated and truly exploited by a handful of retailers who trail blazed their way on to the computer screens of the UK. Companies such as Amazon, Play.com and Tesco have all exploited this phenomenon in providing compelling offerings in the early days of this online retail explosion. But now this early adoption is moving to one of relative maturity and so, what should retailers be doing to ensure that they are not drowned out by the noise?

Across the globe, retailers are discovering that winning in the multi-channel arena is fundamentally all about putting the customer first and it is those that truly embrace this philosophy are those that will survive and maintain, if not further grow their own position. Creating a compelling multi-channel proposition is the current obsession of the industry and making it easier for customers to seamlessly slip across the various channels available today is a key part of the evolving retail landscape. Traditional high street or out of town units, e-commerce, mail/phone order and the evolving m-commerce (mobile commerce) all have their place in the retailing artillery but presenting these as a truly coherent offering is proving a far harder conundrum than the end consumer will ever realise. Central to this, is a realisation that creating the right architecture is not just about how the IT solutions are constructed, but also about how the business architecture is positioned, managed and driven. By getting both of these right, the customer can be correctly positioned at the very centre of these enterprise architectures so that they are the focal point of what all leading retailers aspire to creating…… “Great Customer Service”.

Charteris Multichannel Retail Survey 2008 Results

For retailers, addressing the challenges facing them isn't as straightforward as it may seem. Both leveraging existing assets and embedding customer centricity in decision making are easier said than done.

This point is clearly highlighted by a recent study Charteris did on Multi-Channel Retailing in the UK. We spoke to 32 multi-channel UK retailers covering all the main retail sectors, with total sales exceeding £41bn. Retailers scored themselves in 6 areas…

1. Strategy
2. People
3. Processes
4. Information
5. Metrics
6. Technology

What we found is that retailers currently face a lot of challenges, with only metrics scoring acceptably in the survey.

The lowest scores across were in these six areas.

1. Responding to customer needs
2. Improving customer experience
3. Leveraging Existing Systems
4. Integrating Existing Systems
5. Shifting from a product focus to a customer-centric culture
6. Shifting to a cross-channel culture

We can aggregate these to highlight three key problem areas that we feel retailers should be focusing on

1. Changing culture
2. Doing more with existing assets
3. Linking assets together

Facing up to the Credit Crunch

Probably the most critical issue/trend facing Retailers right now is the Credit Crunch.

As you must know, the subprime mortgage crisis in 2007 has had a massive global financial impact. From a retail consumer perspective it seems however, that the recession effect still has some way to go. ONS figures for last month showed a rise of 1.2% in sales, although retailers are not convinced and the rise is being attributed to a number of reasons from massive price reductions to the high street being a “lagging indicator” to general volatility shown by the May surge and July drop.

Either way, the immediate impact is uncertainty. Lenders are uncertain about future sources and costs of funding, while consumers are unsure about how much further house prices will continue to decline, and whether or not widespread job losses and mortgage rate rises are really going to happen.

All expectation is that this is a recession that will deepen and the trend towards careful spending is going to put increasing pressure on retail margins. As it stands, the policy of reductions that retailers have employed to boost sales is seriously hitting profits. The John Lewis Partnership recently underlined this by announcing a 27% fall in first-half profits attributed mostly to price cuts and increased marketing spend.

Finally apart from the direct impact to profits discussed, the credit crunch is also severely impacting investors and share prices, and nervousness in the financial markets is making it harder to raise investment capital for new initiatives.

The effect of the global credit crunch on business and consumer spending thus means that retailers must look to innovate and create competitive advantage without the luxury of profit growth and flexible budgets. In short it means they need low cost / high benefit customer propositions that involve linking up existing assets to improve customer propositions rather than involving large spend on new systems, staff or channels.

6 Key Consumer and Retail Industry Trends For 2008 / 2009

Let’s start with a quick look at some of the key trends in consumer behaviour and the retail industry. I’ll pick out 3 each.

3 Deepening Trends in Consumer Behaviour:

1. Customers are becoming more demanding – the Web 2.0 revolution has provided a forum for sharing opinions to the point where consumers really do call the shots. They expect choice and convenience or will go elsewhere.
2. Social Media online is exploding – and is becoming a key vehicle for both strategic marketing and customer engagement.
3. Premium products and services still sell well and Green is becoming iconic – many of the less price sensitive consumers are still highly style and status conscious, and consumers are going to increasingly great lengths to boycott brands that have poor eco-credentials

Ok, so that’s 3 consumer trends. How about the Retail Industry in general?

3 Deepening Trends in the Retail Industry:

1. The credit crunch is getting worse – and negatively impacting retailer profits
2. The e-channel is still growing fast – online spending in July for example reached £4.8 billion, up 80% on last year to a new all-time high. Retailers are expecting a major shift to online this Christmas.
3. The leaders are merging channels – and providing seamless brand and customer experiences across them all. Consumers in return are becoming rapidly less tolerant of pricing, availability or service differentials online and offline.

Charteris' ARC Conference Presentation on Leveraging multi-channel Assets

We attended the ARC Retail Conference this morning and gave a breakfast briefing on Cross-Channel Retailing - see slides below.

The slides cover the 3 critical challenges that retailers are facing right now and how they could start addressing them by developing low cost, high benefit, customer propositions through leveraging the channel assets they already have. Here's the slides. The presentation is extremely visual so it should be easy to scan through quickly.

If you want to know more just drop us an email on info@charteris.com or contact as us as below and we'll be more than happy to have a chat.

ARC Conference Presentation - Leveraging Multi Channel Assets V1

View SlideShare presentation or Upload your own. (tags: social retail)

Enjoy!