Think Like a Multichannel Company

  |  February 19, 2004   |  Comments

Online or off-? For retailers, the twain can (and should) meet.

The news hit like a welcome sigh of relief, making me feel as if we actually are making progress in the field of multichannel marketing. Barnes & Noble Inc. (B&N) decided to buy back its dot-com spin-off, barnesandnoble.com. Having been a member of the dot-com company, I'm excited by the news. It means B&N will either finally realize it's a multichannel company or fail miserably by not understanding multi- and cross-channel marketing.

I guest-lectured an MBA class at Columbia Business School last semester. Homework was a case study: B&N versus Amazon. Because the students were also studying finance, their "winning strategies" mostly focused on supply-chain management and the cost of books for each company. The strongest case for B&N lay in its ability to be a multichannel marketer, a topic that deserves a wholly dedicated course.

Multichannel consumers are more loyal. "Channibilism" doesn't exist. With no fear of stealing your own customers from your other channels, the longed-for ideals of effective multichannel and cross-channeling marketing become a palpable possibility.

The first step for your company, and for B&N once it's bought back its estranged dot-com offspring, is think like a multichannel company. This means unifying customer data across all customer touch points and understanding the brand as the glue that binds the channels.

People are loyal to your company's brand, not its channels (unless you disappoint them). For many Americans, book buying is a very channel-specific task, not a brand-specific task. They buy books at B&N stores; online they go to Amazon.

This is because Amazon was very smart positioning its brand online. Instead of branding itself as just another online store, it aligned itself with the channel. It declared anything you want to buy online, you can buy from Amazon.

The brand ignorant were left scrambling to create an online brand that didn't compete with Amazon. This is difficult, as Amazon's brand and product range intentionally overlaps (and overshadows) almost every other online brand. Had multichannel retailers branded themselves as such, they wouldn't be in the turmoil they're in today. Because brand alignment is usually stronger than channel alignment, B&N shouldn't have lost customers to Amazon.

But B&N didn't have a Web site when Amazon started. It never focused on pushing its Web site to its current offline customer base. If you don't think of yourself as a multichannel company, neither will your customers.

Because barnesandnoble.com was treated more like a separate, single-channel company (which it was) than the online arm of a multichannel company, it competed only online. It never used its other channels as competitive weapons. With no multichannel marketing help, the online division (like all other online stores) failed to compete with Amazon.

A true multichannel competitor can offer users an experience Amazon (or any other single-channel company) cannot: shopping over multiple channels (online or off-) in the same environment.

If I could achieve the most basic multichannel tasks with B&N, such as buying a book online and picking it up in the store, my loyalties would be switched quite easily. In New York City, there's a B&N store every few blocks. If I can pick up my order when I'm out getting dinner (no one in New York cooks), that's a tremendous benefit Amazon can't offer.

Office Depot allows you to pick up online orders at a store near you. It even provides a map to the store. I can see what products are in stock at my local Office Depot by searching its online store.

Companies such as B&N must realize their Web sites can just as easily be a self-service agent for stock availability. I can't imagine how much time is spent by retail clerks answering, "Do you have this book in stock?" Through online self-service, customers can view stock availability online. That not only cuts the customer-service costs of running a store, but it also draws people from online into the offline world.

These are just a few issues that will surround B&N (and other offline retailers) in the struggle to create a true multichannel brand. It assumes, of course, it starts thinking like a multichannel company and implements a multichannel marketing strategy and user experience.

Is pushing a multichannel strategy a good idea, or is there another way B&N can come out on top? Is this strategy a good idea for a less-mature category, but too late for bookstores? Let me know your thoughts!

Until next time...

Jack

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ABOUT THE AUTHOR

Jack Aaronson

Jack Aaronson, CEO of The Aaronson Group and corporate lecturer, is a sought-after expert on enhanced user experiences, customer conversion, retention, and loyalty. If only a small percentage of people who arrive at your home page transact with your company (and even fewer return to transact again), Jack and his company can help. He also publishes a newsletter about multichannel marketing, personalization, user experience, and other related issues. He has keynoted most major marketing conferences around the world and regularly speaks at Shop.org and other major industry shows. You can learn more about Jack through his LinkedIn profile.

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