Closing the Cross-Channel Gap

Dial In: 805-309-0020

Access Code: 583-074-897

Webinar ID: 127-449-602

June 28, 2011

MyBuys & the e-tailing group Present:

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LAUREN FREEDMANPresident

The e-tailing group, inc.

Today’s Featured Presenters

SHAUN SCHOOLEYVice President, Client Success

MyBuys

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Housekeeping

• How to get “Closing The Cross Channel Gap” White Paper with findings from the 4th Annual MyBuys/e-tailing group Consumer Insights Survey:

All attendees will receive via email the week of July 4

Available to download on the MyBuys website

• This Webinar will be recorded and available for viewing on MyBuys.com later this week

• Type questions in the right hand control bar for a Q&A session at the end of the webinar

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About MyBuys

• Founded in 2006; HQ in Silicon Valley• Cross-Channel Personalization for Retailers• Widely regarded as an industry leader • Experienced, client centric team of innovators

• 300+ Clients• #1 Personalization Provider for IR Top 500• Top Brands in Every Vertical• Clients range from $2 MM - $6 Billion

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About Lauren Freedman

• President of the e-tailing group

• 15 years e-commerce consulting

• Fortune 500 client projects ranging from strategic planning, customer experience with an emphasis on merchandising to technology marketing and lead generation

• Extensive cross-category expertise with merchants B2C and B2B

• Proprietary research studies on mystery shopping, merchandising and consumer behavior

• Author, It’s Just Shopping

• 50+ years traditional retail and catalog experience

• The Voice of Cross-Channel MerchandisingStraight talk right from “the-trenches” of online merchandising

• www.e-tailing.com

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Today’s Agenda

I. e-tailing group/MyBuys Cross-Channel Gap Analysis Survey

II. 10th Annual Merchant Survey Cross-Channel Results

III. The Ideal and Current Cross-Channel Shopping Experiences - 5 Key Demands

1. Convenience

2. Consistency

3. Customer Service

4. Personalization

5. Mobile and Social

IV. Best practices to start closing the gap today

V. How To Address Cross-Channel Today

VI. Q & A

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I. E-TAILING GROUP/MYBUYS CROSS-CHANNEL GAP

ANALYSIS SURVEY

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Methodology & Demographics

• Online survey completed by 1,023 adults in April 2011

– 50% female / 50% male

– Shopped online for products 4 or more times in the past year

– Spend at least $500 online annually

– Make shopping purchases both online and in stores

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Survey Objectives

• To understand what the customers’ ideal cross-channel shopping experience would be by valuing the importance of 25 key aspects and subsequently learning how consumers’ real retail experiences stack up against these expectations

• Trending personalization of shopping experiences year- over-year including the what and where of such strategies

• Understanding mobile purchasing patterns to date

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The Cross-Channel Shopping Experience

IDEAL: “Please take a moment to think about the many elements that go into making up your ideal shopping experience across a retailer’s various channels (online, store, catalog, mobile, call center). Read each of the following statements and identify how important or essential you believe they are for your ideal shopping experience with all of the retailers where you like to shop.”

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CURRENT: “Now, please think about your shopping over the past year noting the experiences you actually received from retailers within or across all of their shopping channels (store, online, catalog, call center, mobile). Please read each statement and identify the frequency that such a behavior occurred for shopping experiences throughout the year.”

Consistency, Convenience, Service & Personalization Are Most Important

IDEAL CURRENT

Top-2 Top-2

ConsistencyI expect a consistent and convenient shopping experience from a merchant’s

website to any of their stores (physical, mobile) where I shop85% 50% 41%

Convenience A combination of in-store and online experiences best suits my shopping needs 84% 67% 20%

Service

I expect to find accessible (friendly, knowledgeable, available) sales and service

when I visit retail stores and easy to find “help/contact info” when I shop one’s

website or mobile store

84% 42% 50%

Consistency

Marketing collateral (in-store promotions, catalogs, seasonal selling) should be

consistently presented from the web to the store or mobile to reinforce my

perception of the brand

72% 39% 46%

ConvenienceI expect to be able to look up product availability at stores locally before making a

visit to the store72% 44% 39%

Personalization

Stores where I am part of a loyalty program should deliver me a more

personalized shopping experience than those where I don’t participate in their

programs

66% 33% 50%

Convenience I prefer to shop online but I like to return product to my local store 63% 30% 52%

PersonalizationThe retailers where I shop should offer promotions and merchandising tailored

to my past purchasing and browsing behavior50% 28% 44%

PersonalizationI would buy more from retailers who personalize the shopping experience

across all of their channels (store, website, catalog, mobile, call center)46% 27% 41%

ConvenienceI use online retail locators from websites and my mobile phone to help me find

convenient stores and to check out upcoming promotions and events41% 36% 12%

Mobile and SocialI expect to be able to purchase via my mobile phone with a shopping experience

that renders well for that device26% 13% 50%

IDEAL AND CURRENT TOP-2 / % Ideal over Current

(VERY-SOMEWHAT IMPORTANT/ALL THE TIME-FREQUENTLY) GAP

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Q7

Shoppers Want Consistency

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• Expect the shopping experience to be consistent

IDEAL CURRENT

85% 50%

• Expect to see personalized merchandising from web to mobile to email as a member of a loyalty program

72% 39%

When Shopping with a Retailer: GAP

35%

43%

Shoppers Want Convenience

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• Able to shop at my retailer’s; both in-store and online

• Prefer to shop online but return product to my local store

For Cross-Channel Experiences:

84% 67%

63% 30%

17%

33%

IDEAL CURRENT GAP

Shoppers Want Personalization

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• Expect a more personalized shopping experience

• Desire offers, promotions & merchandising tailored to my past browsing & purchasing

For Retailers Where I Shop:

• Would buy more if they personalized the experience across all of their channels

66% 33%

50% 28%

33%

22%

46% 26% 20%

IDEAL CURRENT GAP

Shoppers Want Customer Service

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• I expect to find accessible sales and service when I visit retail stores and easy to find “help/contact info” when I shop one’s website or mobile store

• Service Sales associate/service training and knowledge of products they sell should be consistent from store to web to call center to mobile

When I visit retail stores:

84% 42%

80% 32%

42%

48%

IDEAL CURRENT GAP

• Service Call centers should be equipped with my full customer profile in order to best service my needs

54% 28% 26%

Shoppers Want Mobile & Social

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• Expect to shop and quickly find

products right for me via my mobile device

• Expect shopping experience to be optimized on my mobile device

From My Favorite Retailers:

• Want to shop from my favorite Retailers on Facebook

EXPECTED TODAY

26% 14%

26% 13%

GAP

12%

13%

15% 8% 7%

What Shoppers Want

• A combination of online and in-store experiences that are consistent and convenient

• Consistency from sales associate/CSR product knowledge to the presentation of marketing collateral

• Helpful and friendly customer service integrated within seamless shopping

• Access to inventory online and in-store along with the ability to send product from another store as desired

• Personalization, particularly leveraging loyalty programs followed by promotions and merchandising tailored to past purchasing

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The Best Cross-Channel Merchants Are…

12%

10%

9%

4%

4%

4%

4%

3%

3%

3%

Best Buy

Amazon

Wal-Mart

Target

Kohl's

JCPenney

Lands' End

Sears

Lowe's

Staples

Top 10 merchants for delivery of best cross-channel shopping experience out of 120 merchants named in open-ended question

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Describe your best shopping experience (including store name) that involves a

combination of web and retail store, web and mobile or retail store and mobile sharing

why it worked so well for you.

II. The 10th Annual e-tailing group Merchant Survey

• Diligent Investing+ Solid Execution= Evolved Selling

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Profile of Surveyed Merchants

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Merchants of all sizes (annual sales)

33% $<$1M to $20M

20% $20M to $100M

30% $100M to $1B

17% $1B to $5B>

Senior level participation

43% CEO/President/Principal or VP/

General Manager

45% Director, Senior Manager or Manager

12% Analyst, Specialist, Assistant or Other

Selling through a mix of channels

98% Internet

78% Email

52% Store

44% Catalog

36% Mobile

30% Social

7% TV

32 categories of products and services

40% Apparel/Accessories/Shoes/Luggage/Jewelry

25% Home & Garden/Home Improvement/

Tools/Appliances/Furniture/Organization

15% Sporting Goods/Outdoor Gear

11% Business to Business (B2B)

10% Consumer Electronics

10% Food & Beverages

10% Toys/Kids

9% Health & Beauty/Seniors

8% Books/Music/Video

8% Computer Hardware/Software/Peripherals

7% Arts & Crafts/Hobbies/Party

7% Gifting/Greeting Cards/Food & Wine

7% Office Supplies/Office Furniture

6% Entertainment

4% Business Services

4% Collectibles

4% Digital/Virtual Merchandise

4% Educational

4% Pets

4% Travel

To meet customer demand, merchantsare selling through a mix of channels

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98%

78%

52%44%

36%30%

7%

Internet (website)

Email Store Catalog Mobile Social TV

Through which of the following channels are you currently selling? Check all that apply.

Merchants rank their current cross-channel

experiences at 5.4 (out of a possible 10)

for delivery of seamless shopping

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ranking % of responses

1 11%

2 6%

3 10%

4 8%

5 19%

6 10%

7 14%

8 12%

9 4%

10 6%

On a scale of 1-10 w ith 10 a seamless shopping

experience (channels are well integrated for

shoppers) and 1 a siloed scenario (channels are

operated independently) where does your current

cross-channel experience rank?

AVERAGE RESPONSE = 5.4

Where Your Current Cross-Channel Experience Ranks

10% of merchants already have a seamless shopping experience in place and 46% plan to

deliver one by next year

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10%

20%

26%

22%

6%

16%

Already have seamless shopping experience in place

This year

Next year

Not currently planned

Will always remain separate or siloed

Don’t know

What is your time frame for delivering a seamless shopping experience (channels are well integrated for shoppers) across sales channels

(Internet/website, email, mobile, store, catalog, TV, social)?

What Your Cross-Channel Plans Looks Like

Consistent branding (74%), inventory (60%), and promotions (60%) are key to cross-channel initiatives

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74%

60%

60%

59%

59%

55%

45%

43%

37%

Branding is consistently deployed accross channels

Inventory is shared and similar across channels

Promotions are consistently marketed accross channels

Marketing and advertising programs are led by one team

IT directives are headed by one individual across the organization

Management has a strategic cross-channel lens

Merchandising is a singularly focused initiative that sets direction for the entire company

Benchmark and KPIs are in place to measure cross-channel influencers and performance

Cross-channel compensation structures are in place

Rate your level of agreement with each of the following statements relative to your company’s current integration of cross-channel initiatives.

(Strongly to somewhat agree charted-top 2)

III. Five Key Demands

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Consistency: Pricing

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“I enjoy shopping Best Buy and bestbuy.com; they always have the same prices running, tell me if store

pick up is available and which store, and when they do deliver it is

prompt and in excellent packing (product never damaged).”

Consistency: Shared Profile Information

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“Apple store -- seamless integration between web,

phone and store. Information is shared between all locations so profile is

consistent.”

Opportunities: Consistency

• Consistent and cross-channel convenient shopping experiences must be non-negotiable

• Evaluate consistency of pricing across channels and at minimum put polices in place to address customer concerns

• When deploying new features and functionality, ask yourself, “does this make shopping more convenient?”

• Evaluate all marketing collateral and establish consistency of presentation across channels

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Convenience: Access To Inventory Across Channels

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“REI - easy to find products on website, easy to check if

those products are available in a nearby store, can have items shipped to store for

free.”

Convenience: Immediate Availability

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“Wanted a book, found it online (on my phone) at a

local Barnes & Noble, ordered, paid on my phone and picked it up 20 minutes later at the store closest to

where I was.”

Opportunities: Convenience

• Employ cross-channel initiatives that support your brand

• Deploy POS and storewide systems that allow for an enterprise view of inventory and be in a position to send merchandise to customers in line with current online shipping policies

• Store returns are a must in the consumers’ mind and should be seamlessly serviced at retail

• Store pickup should be evaluated particularly as mobile assumes a greater role in buying behavior

• Retail locators should be robust and tailored by channel

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Customer Service: Best-in-class Execution

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“Nordstrom’s in-person customer service is top notch-after searching online for products, their staff was knowledgeable and willing to go the extra step to assure a quality experience & customer satisfaction every time.”

Customer Service: Share the Love

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“While shopping for exhaust vents Lowe’s online allowed me to purchase and ship to store at no additional cost. Reps at the store called when product was in the store and really available when I arrived to pick up. In fact they remembered talking to me on the phone and make the whole pick up easy and enjoyable.”

Opportunities: Customer Service

• Sales associates should be skilled in both product and service aspects of the business while always being responsive to shopper needs

• Establish a true culture of customer service and monitor performance against a set of pre-established goals

• Customer profiles need to be accessible across channels and utilized to personalize and best serve the customer

• Onsite web customer service should be revisited to ensure it is self service, comprehensive, and available for all customers

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Personalization: Timely Recommendations

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“I was looking for the right storage unit for my son before he went to college. There is so much out there but Container Store made it easy to find the right one for him. They recommended just the right solution at just the right time to get us to buy.”

Personalization: Email + Loyalty Tie-ins

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“I enjoy a nice glass of wine from time to time. I didn’t know much about how to have it right till I found Wine Enthusiast. They recommend the best stuff to make my wine taste that much better, drawing me back to buy time and again.”

Opportunities: Personalization

• Take advantage of PPR defining strategically what and where they can be deployed onsite and via email

• Ensure your customer database has a 360-degree view of the customer accessible in all channels

• Loyalty Programs serve as excellent retention tools, providing invaluable data that should be evaluated for “fit” with your business

• Explore retargeting and cart abandonment programs to secure incremental revenue streams

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Mobile & Social: Everywhere, Anywhere Access

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“I’m a huge fan of babyphatand love how easy it is to connect with the brand. If I’m on my computer I can shop on their site or on Facebook and share it with my friends. If I’m on the go, I get their emails and they have a great site for my phone. They even give recommendations on the homepage just for me.”

Mobile: Coupon Convenience

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“Steve Madden offers coupons on your cell phone, so you don’t have to remember to bring them with you.”

Opportunities: Mobile & Social

• Ready your mobile strategy starting with mcommerce while weighing apps and their appropriateness for your business

• Survey your customers to understand their mobile needs

• Elevate existing mobile experience to ensure it renders right for all devices and usability is aligned with consumer shopping goals

• Utilize mobile channels to deploy promotions

• Test Facebook strategies to learn how your shoppers will buy across social networks

• Leverage mobile and social learning as the technology evolves in the near-term

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Closing the Gap

• Service gaps should be closed where training, tools and a cultural vision are put in place

• Investing in systems should be top-of-mind to accommodate enterprise-wide inventory access

• 360-degree view of the customer will fuel selling and close experiential gaps

• Cross-channel vision should be defined where conveniences such as store returns are hassle-free

• Personalization tactics should be deployed for more relevant experiences across the board move beyond recommendations

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IV. Best Practices To Close The Gap Today

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Why MyBuys Commissioned This Thought Leadership

• Continual pulse on the consumer

• Gathering historical perspective and monitoring trends

• Validating our vision for personalized merchandising

• Confirming consumer interest in personalized merchandising across all channels

• Incorporating feedback into best practices and merchant outreach

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Consistency Starts at the Consumer

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How I Learned to Stop Worrying About Multi-Channel Interactions

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Most Retailers Organized Around Channels

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You Can Do It Yourself

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“in just 3 short years, we’ll have….”

“….and it’ll only cost $100Million!”

Or, You Could Start with a Blank White Board…

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Start Capturing Insights from the First Click

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Derive Insights Based on Their Actions

Much more……

Explicit preferences

Purchased

Abandoned

Recency

Strength of affinity

Capture Profile Across Channels

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Maniacal Cross-Channel Consistency

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Catalog EmailWebsite

They Search and Evaluate Decanters

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Intended to Buy, But Abandon Site

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Retarget Them With a Personalized Display Ad

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And Stay Engaged With Relevant Interactions

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Personalized Direct Mail

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Personalized Mobile

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Cross-Channel Personalization Leadership

FootwearApparel Home Health & Beauty

CONTACT INFO & Q & A

Lauren Freedman

the e-tailing group

1444 W. Altgeld St

Chicago, IL 60614

773-975-7280

LF@e-tailing.com

www.e-tailing.com

Shaun Schooley

MyBuys

One Lagoon Drive #120

Redwood City, CA 94065

650-232-2900

sschooley@mybuys.com

www.mybuys.com

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