Who Will Be Brave Enough to Become a True Merged Channel Retailer?

Shoe chain Aerosoles is one of many retailers trying to figure how far they can go in the multi-channel race.

Magnus Gustafsson is a marketing executive with a very clear mission.

As vice president of direct marketing for Aerosoles, he uses the chains more than 250 Aerosole stores and thousands of department and specialty store partners to push one form of apparel—shoes—and to only form of customer: women. The chain recently kicked off its mens shoe products as ill-fitting.

But as focused as Gustafsson is, he admits that his chain—as well as the vast majority of retailers out there—have a lot of growing to do to truly become a multi-channel retailer.

In talking with lots of retail marketing and IT execs recently, there appears to be this growing realization—concession?—that a true multi-channel approach is a shock to the retail system. Indeed, even the word "multi-channel" sends the wrong message. Isn’t that the opposite of the true goal? Perhaps the phrase "merged channels" is closer, with "multi-channel" usually a pseudonym for what Googles head of retailing has dubbed "multi-silo-ed."

So I asked Gustafsson what a true merged channel retail environment would need and the conversation turned to incentives and organization. What do retailers measure versus what shouldretailers measure?

In a typical chain, credit for sales made is based on one simple measurement: Where was the purchase consummated?

Consider a customer who spends hours online evaluating products and making comparisons and then finally decides to buy. That customer drives five minutes to the local brick-and-mortar store of that Web sites chain and buys the item. In terms of credit (and bonuses and staffing and all of those other goodies), who made that sale?

If a brick-and-mortar location identified customers as soon as they entered the store and then tracked them through the aisles, they might make a guess as to their motivation.


Click here to read about how Hewlett-Packards prototype Retail Store Assistant kiosk uses shoppers smart phones.

Did the customer make a beeline right for aisle 9, grab the blue widget and take it immediately to checkout lane six? If so, it’s hard to dispute that the purchase decision was likely made before that customer walked into the store. Did they receive a new catalogue yesterday? Had they asked anything of the call center this morning? Any visits to the Web site recently?

A true merged channel retailer would use technology tools in all of their channels to analyze such data. Management could then make proper decisions about personnel rewards, staffing requests and—most critically—theyd truly know where their sales were coming from.

But do they? Does Aerosole? Not by a longshot. "A lot of retailers look at where the sale happens because thats the easy part to identify," Gustafsson said. "Its not easy, but its easier."