Target's Expansion into Multi-Channel Sales Raises the Bar for Australian Retailers: LoyaltyTech

Sydney, Australia -- April 13, 2011

-- The announcement that Target has expanded into multi-channel sales represents a commitment to customer engagement and responsiveness that raises the bar for other retailers, says Matt Hampshire, Managing Director for LoyaltyTech [www.loyaltytech.com.au], the Australian company that along with global integrator Sapient Nitro and hybris developed Target's new online store.

Successful multi-channel or cross-channel retailing is not just about having a website, but about being accessible whenever and wherever the customer wants.

"Cross-channel retailing not only means engaging with customers across channels like Web, social media, mobile, catalogues and stores," says Hampshire. "It also means maintaining a consistent dialogue with the customer across these channels. If I am on Facebook and I can buy there, that's great, because you are minimising the clicks for the customer. However, if this transaction happens in isolation, and the message the customer receives is not consistent with what they are receiving in other channels, then they can easily get confused."

The more channels retailers have that work in harmony, the more they can engage with customers, says Hampshire, and the more successful they will be.

"Macy's CEO says their average multi-channel customers spend 2.8 times more than a single channel shopper. Urban Outfitters says that shoppers that use three channels or more are spending 6 times more than an average shopper."

Larger retailers face challenges, however, in engaging with customers across multiple channels.

"Most retailers are organised into silos built around individual channels," says Hampshire. "They have a Web group, a social media group, a stores group, perhaps a catalogue group. Each group builds silos with processes and systems that are not designed to work together or in real time.

"But a customer doesn't see themselves as a Web customer or a social media customer or a store customer, they only see themselves as a customer," he says. "You need to be able to interact with a customer seamlessly across all channels, because that is what customers want."

When retail organisations come to integrate their silos to support cross-channel sales the starting point is an environment that can typically only deliver overnight updates not real-time responses.

A key question retailers need to ask is: 'How do I respond in real time?'. "The best retailers around the world provide personalised offers and promotions in real time and they track and analyse responses regardless of channel," says Hampshire.

"Retailers have historically not needed to think about responding in real time. Their systems are not built with interactivity in mind. If you make a pricing change in the back office it is typical that it will get populated out into the stores overnight, not in real time."

LoyaltyTech advises organisations like Target how to integrate their systems and processes across different channels, including updating large amounts of information to their websites from back-end systems.

"Any pricing mistake has to be fixed right away, not overnight," he says. "If a pricing error gets posted on Twitter, you could have sold 10,000 items before you fix it."

While achieving real-time responsiveness is not easy for a big organisation, LoyaltyTech can advise retailers what steps to take, and it can only be achieved with high level management commitment.

"From an integration standpoint it takes some rethinking because it is also about people, workflows, processes and approvals," says Hampshire. "With online channels, retailers need to be able to move far more rapidly. Which means your organisation needs to be agile enough to support it.

"To succeed with cross-channel sales you need to have strong senior management support."

About LoyaltyTech

LoyaltyTech is a privately held company founded in 2004 which develops business and technology solutions that make it easier for retailers to engage with their customers. The company has extensive practical experience working with leading brands around the world. Its vision is to translate this experience into cost-effective, best-practice systems for Australian businesses that integrate sales, marketing and service channels. For more information please visit www.loyaltytech.com.au