Russell Dorset at Maginus explains how speciality retailers can use technology to help them reduce costs and expand across channels while delivering a faultless customer service experience

It doesn’t matter how much value for money retailers offer their customers, if they choose to neglect customer service consumers will still go elsewhere. Once people leave a brand, or stop using a retailer after a bad experience, they will develop loyalty elsewhere and it will be almost impossible to win them back.

With many speciality retailers looking to develop new sales channels, it is important that they offer consistent levels of customer service across all channels. Customer expectations are continuing to rise and there are some serious technical issues around fully integrating sales channels.

Customers increasingly expect to be able to order goods online and collect in store, or be able to take goods back to stores that have been purchased online. In fact, if you take online sales growth forward a decade or two, the retail store might well be little more than a collection point. To handle current customer expectations retailers need more than a basic integration between back office systems, the POS and the e-commerce site. To achieve this full multi-channel business model, retailers need to have much more tightly integrated systems and this can be difficult if each system has been bought from a different supplier, possibly using a different infrastructure and database.

The market is constantly changing and while most retailers have a Web channel now, they also need to be looking at other potential channels such as kiosks, mobile devices, TV and game consoles. We’re finding that many retailers are interested in these new channels – particularly kiosks as they offer an opportunity to give customers access, via a simple Web application, to the full range of goods, which is particularly valuable when your customer is in a smaller store that doesn’t stock the full range or where a product is out of stock. The customer can order and pay for the goods in store for either collection at the store or for home delivery.

Speciality retailers need to use technology to help generate sales too. Using, for example, recency, frequency and monetary value modelling to identify their best customers, top products and customers that haven’t bought for a while, they can devise suitable promotions to maximise sales.

Sophisticated dynamic merchandising techniques (we call it clever selling) should also be used on and offline to allow retailers to cross or upsell more effectively. Building up knowledge at both the customer and product level, retailers can get a better idea of their customers’ shopping habits. For example, on a basic level, the Web site will know that a high percentage of customers who bought ‘product A’ (black trousers) also bought ‘product B’ (red jumper). The site will therefore promote the red jumper to shoppers who buy the black trousers.

However, such technology can be much more sophisticated than that and delve much deeper to reveal even greater customer insight as and when required. Taking such factors as age, geography, whether a customer only buys promoted products, or if they never spend more than £50 on the Web, retailers can establish different customer types and reach out to them as a whole.

Retailers should also have technology in place that can help to control costs. For example, advanced forecasting (or clever forecasting) can help to maintain minimal stock levels, while ensuring stock is available when required. This reduces the amount of money held in old stock models, such as computers and photographic equipment where stock becomes obsolete very quickly. Clever warehousing can also reduce costs by ensuring maximum efficiency in the warehouse by ensuring that items that are often ordered at the same time are located then picked together.

Ultimately adopting a multi-channel business model is vital for speciality retailers. But it’s important that they choose systems for the right reasons. Retailers shouldn’t just focus solely on the look and feel of the Web site, but ensure that they have the back-office infrastructure in place to handle a multi-channel operation. It is important, therefore that retailers go to experts who have the full skill set in house. Investment in the right technology will lay the foundations for long-term success. For further information visit www.maginus.com

About the Author
Russell Dorset has over 20 years’ experience in the software industry in a range of senior sales, marketing and operational management roles. As director of sales and marketing, he drives the sales of Maginus’ business management systems – Maginus ERP, the company’s flagship solution for multi-channel retail and distribution, and Dynamics AX Microsoft’s mid-market solution.