(top) Kirthi Kalyanam, director of Internet Retailing at SCU, and (bottom) Julian Chu, director of Demandware’s Client Success Program, presented on a panel discussion at Shop.org for Demandware.
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This article was prepared by Anna Eschenburg ’08 under the supervision of Professor Kirthi Kalyanam.
For retailers to maintain their competitive edge in the market and meet the demands of customers, they must have an effective multi-channel marketing strategy. At the Shop.org Annual Summit held in Las Vegas on September 17-19, Professor Kirthi Kalyanam, director of Internet Retailing at Santa Clara University, Sarah Viet, Bare Escentuals’ director of web marketing, and Julian Chu, director of Demandware’s Client Success Program, spoke on “Delivering a Seamless Customer Experience: Effective Execution of Multi-Channel Promotions.” Their panel discussion highlighted Bare Escentuals’ multi-channel marketing strategy and the crucial role of the technology platforms that enable this. RSSA interviewed Kirthi Kalyanam and Julian Chu to learn more about the discussion.
Why is it important to coordinate promotions across channels?
Consumers today expect a single brand to treat them consistently regardless of which channel they use to shop—be it a store, Web site, call center, direct response advertising (TV), etc. Thus, promotional strategies should be consistent across these channels, to avoid customer confusion and dissatisfaction.
A well-coordinated cross-channel promotional strategy enables a brand/retailer to leverage multiple media or tactics in complementary ways. Some channels can be used to generate general awareness, some to educate customers about new products, and others to drive specific actions, all in the context of an entire campaign. Some channels are more cost-effective than others in different situations, so it’s important to use the right medium for any given purpose.
Can you give us an example of this type of cross-channel coordination?
For example, Bare Escentuals’ TV infomercials enable the delivery of deep content that highlights the benefits of new products such as Bare Minerals ™ and building of brand excitement. These commercials can then be redeployed on the Web site so that they are available in full-feature length to customers, at their convenience. The Web site can also contain specific offers that customers can “redeem” or “buy.” The TV spots are great for acquiring new customers and providing in-depth information about new products, but are not necessarily focused on generating repeat business from existing customers. Interactive online channels (i.e., Web, e-mail) are much better and more cost-effective for the latter. They also can work in concert with store-based information for personalization and targeting. For example, if BE knows that I’ve shopped in one of their stores in San Francisco, they can notify me of special events or offers available in that market. Or, if BE knows I’ve bought some of the products online and I live in Boston, they can notify me when a new store is opened in my area.
Are there some promotions that should not be coordinated across channels? Why?
A specific promotion doesn’t necessarily have to be actively marketed in every channel—some might be specifically designed to push customer shopping behavior onto lower-cost channels such as the Web site, for example.
But we would generally advise that companies allow customers to access a given offer in every channel should they want to do so, maybe on a “when requested” basis … to avoid dissatisfaction, etc. so that you ensure you make the sale and keep the customer happy. It’s not worth risking that relationship to be strict about this.
And in any case, one should always think about the cross-channel angle when developing a promotional strategy and marketing campaign.
Should retailers expect a sales impact when promotions are coordinated across channels?
When promotions are coordinated across channels, retailers can potentially see an extra sales lift. This is often called the big bang effect. Since the promotions are consistently displayed across channels it has the effect of reminder advertising, and these repeat exposures can have a sales impact. Depending on how these promotions are coordinated, the sales effects could be significant.
Are there some promotions that are better suited to certain channels?
This is definitely the case. Interactive contests, games and other such offers are best offered in digital channels. Similarly, promotions that are designed with a viral effect in mind might best be displayed in digital channels.
What are some of the key barriers to integrating promotions across channels?
The lack of a single and consistent source of product data is a key barrier. For example, the direct side of the business might have a different SKU number for a product compared to the store. In this case, it is very difficult to integrate promotions across channels.
Organizational silos can also be a barrier. For example, if there are different organizational units that have responsibility for different media, then a consistent framework for coordinating promotions might be difficult to achieve.
Julian, can you please briefly explain the concept of an On-Demand application?
True On-Demand consists of three key components: 1) total control, 2) continuous innovation, and 3) infrastructure delivery.
Total control means providing direct access to eCommerce by merchandisers and marketers, the ability to make changes in real-time, simplified management of catalog, pricing and promotions, and a highly customizable environment to meet unique business and technical needs. Continuous innovation involves staying ahead of the competition with regular Web site upgrades, easy access to new and updated features, and automatic hands-free deployment. Infrastructure delivery encompasses proven reliability, scalability and performance, rapid multi-site rollout, and ubiquitous access. In particular, Demandware’s grid computing-based infrastructure dynamically allocates server capacity when and wherever it’s needed, so clients never have to worry about surges in traffic or demand taking their sites down.
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