Jupiter: Poor online service deters offline commerce

Inadequate customer service online can drive 70% of U.S. online consumers to spend less money at a merchant's offline store, according to new research from Jupiter Media Metrix. The report, titled "CRM Moves into the Check-out Aisle," also revealed that only 18% of click-and-mortar retailers are capable of accessing a customer's account activity across all sales and service channels, both online and offline.

Click-and-mortar retailers need to integrate their CRM capabilities if they want to retain customers and meet consumer demand, Jupiter said.

"The first challenge, even before the technology pieces, is more about culture," said David Daniels, analyst at Jupiter. "First, the organization has to understand that the online store is not a separate business unit, but another retail location," he said.

The study found that, while few click-and-mortar retailers can track customer transactions across online and offline channels, 67% of online buyers expect store staff to be able to view their online account information. Browser-based CRM applications allow a retailer's store staff to act as remote customer service representatives, Daniels said.

One fast solution is for companies to bring online customer information immediately into offline stores, Daniels said. "An easy fix is a browser-based type interface to bring that into the store," he said.

The store manager or customer service desk, in the case of a larger retail store, would be able to tap into the customer's information as if he was a remote agent, Daniels said. "If you think about the technologies available to traditional contact centers with the ability to add remote agents, those same technologies can be leveraged to put them into the offline store," he said.

Retailers also need to build data warehouses, according to Daniels. "We recognize that a number of traditional companies, such as NCR, have for years been focused on the offline retail space and are now quickly addressing online needs," he said.

Additionally, 83% of online buyers want to have the option of returning online purchases at offline stores, while 59% said they would like to order a product online and pick it up at an offline store. Yet only 18% of multi-channel retailers offer in-store pickup of items ordered online. According to Daniels, a non-integrated product inventory is a leading reason for customers' dissatisfaction with online service.

Companies need to utilize their physical assets to satisfy customers across channels, Daniels said. "One of the benefits that we've seen that multi-channel retailers are realizing out of the pure-play demise is that they have greater resources, from the inventory perspective, to fulfill orders," he said.

One of the main reasons for shopping cart abandonment online is the lack of product availability and selection, Daniels said. Retailers need to make their offline inventory available online to prevent customers from abandoning their purchases. "Staples was probably one of the first online retailers to really address that," he said. "It requires a high level of accuracy for offline inventory management." The challenge in that prospect, according to Daniels, is that many retailers don't have a real-time grasp on their offline inventory.

"Lands' End, Circuit City and Staples are three companies, in different categories, that have implemented all these types of systems and are now beginning to capture information regarding customers' offline purchases to really start to build a complete cross-channel data warehouse," Daniels said.

In choosing software to build a data warehouse, companies should look for very extensible applications, Daniels said. The software should offer a platform to exchange data easily between applications. "We advise clients to look at the platform. It should be extensible, tap into a number of data types, and be more than a conduit to older SAS or SAP legacy systems," he said. The platform ideally would use Java or extensible markup language (XML) to create a dynamic data-capturing environment, he said.

Once companies have made that hook to their legacy systems, they should be creating a data cache from the information that can be shared with other applications, Daniels said. Another feature companies should seek out is a user interface that marketers can use, he said. As more marketers, rather than business analysts, are looking at the data, the software needs to be more intuitive for them to use, he said.

"Multi-channel retailers really need to build on an initiative now," Daniels said. "They need to start building the infrastructure and the view is that this is not just an online experiment, but to really realize that they need to build the technology and culture that serving customers (happens) through many different distribution points," he said.

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Jupiter Media Metrix

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