January 25, 2011

Multichannel Wednesday: Integration

The start of 2011 has, once again, energized the multi-channel community.

Except this time, it's a different multi-channel community.

From 2000 - 2009, we heard catalogers and retailers (especially the vendors that support this audience) beat us over the head with the "integration" theme.  They told us that we had to offer the same items, at the same prices, with the same level of customer service, using the same creative.  

For so many, this was more of an argument over control than a thesis for increasing sales among loyal customers.  We so quickly forget the climate a decade ago --- we had an online channel being run like it was the "wild west", whereas we had offline channels that were required to generate the sales and profit necessary to allow investments in the online community.  We had a divided marketing world.  The "multi-channel" message was largely an attempt to exert control over an online world that had, to some, gone off the rails!

A decade later, we know that the multi-channel mantra was largely unrealized.  Retailers who integrated everything, outside of a small number of exceptions, did not realize sales gains.  Customer spend, when measured on an annual basis over the course of a decade, was unchanged, and after accounting for inflation, often decreased.

I am not saying you shouldn't integrate everything ... inventory, marketing, channels, strategy, you name it.  Go ahead and integrate everything.  But don't do it because you are being promised that sales will increase ... you're not likely to experience a 17% sales increase on a sustained, annual basis ... you might milk one campaign for a 17% sales increase, but it isn't sustainable over the long haul.  

Integrate because it is right for your vision of customer service.

I bring this topic up because, in 2011, the integration mantra is being rammed down our throats by the vendor and pundit community, once again.  This time, it isn't about integrating offline and online ... no, it's about integrating online/search/e-mail/affiliates with mobile and social.  A decade later, the online audience that fought with the offline audience for marketing freedom is asking the mobile/social crowd to integrate, repeating history.

The trend is clear.  Incumbent channels preach the integration mantra as a means to gain control over upstart channels.  Now, this may be exactly what is needed within your business.  Or, your customer may not give a whiff about integration ... she may want to buy $50 of carrots for $20 from Groupon, then want to buy $50 of carrots for $50 in your e-commerce channel.

The key, of course, is to understand what your customer actually wants, not what your marketing vendor wants for your customer.  Analyze customer behavior, and learn for yourself if your customers want a seamless, integrated experience or an experience that is unique and exciting within each channel.

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