Crafting Integrated Multichannel Retailing Strategies

Multichannel retailing is the set of activities involved in selling merchandise or services to consumers through more than one channel. Multichannel retailers dominate today's retail landscape. While there are many benefits of operating multiple channels, these retailers also face many challenges. In this article, we discuss the key issues concerning multichannel retailing, including the motivations and constraints of going multichannel, the challenges of crafting multichannel retailing strategies and opportunities for creating synergies across channels, key retail mix decisions facing multichannel retailers, and the dynamics of multichannel retailing. We synthesize current knowledge drawn from the academic literature and industry practice, and discuss potential directions for future research.     

The multichannel customer’s service experience: building satisfaction and trust

Multichannel retailers dominate today’s retail landscape. Practitioners and researchers are particularly interested in understanding how the multichannel strategy helps establishing and developing relationships with customers. Our findings, from 302 customers of multichannel financial services firms, show that frontline employees’ customer facilitation behaviors (traditional channel) have a stronger impact on satisfaction than e-psychological benefits (derived from the company’s Web site), while their positive influence on trust is not significantly different. Implications for theory and practice are discussed.     

Channel design,coordination, and performance: Future research directions

The marketing literature has made significant progress toward a better understanding of how firms can effectively design and manage their channels of distribution. However, the complexity of today’s channel systems raises additional issues that remain unaddressed. The purpose of this article is to suggest promising research directions in this domain. We suggest several possible avenues to relate multiple channel design and management to channel-system, channel-relationship, and customer-level outcomes. In particular, we see a great opportunity to integrate multichannel customer management and traditional channel design research. We argue that future research should account for cross-level effects and incorporate variables at more than one relationship level.     

Customer Lifetime Value as the Basis of Customer Segmentation

SUMMARY

In this article, we examine current trends in customer life-time value and customer segmentation models and identify key issues for future research. CLV-based segmentation is a segmentation approach that groups customers into meaningful segments based upon customer lifetime value and (potentially) other factors. In the article, we discuss the extent to which CLV-based segmentation meets the criteria for effective segmentation. We also identify six areas for future research: (1) models and management of “micro-segments,” (2) using CLV-based segmentation to improve the efficiency of marketing programs, (3) the need for more dynamic CLV-based segmentation models, (4) applying CLV-based customer segmentation to new products and new customers, (5) challenges associated with implementing CLV-based segmentation, and (6) the need for new models that enable firms to segment customers by response to marketing activities and CLV at different points in the customer decision process.     

The role of the brand in driving online loyalty for multichannel retailers

Multichannel retailers offer shoppers the possibility to cross channels to complete their shopping process. Multichannel retailers, unlike pure online sellers, offer shoppers multiple contact points to experience the brand. Also, multichannel retailers can leverage the trust and attachment to their brands that has been built with their offline presence to drive customers to buy online. Our paper explores the role of the customer relationship with the brand, with variables such as brand trust, brand attachment and length of brand relationship, as drivers of loyal behaviours towards the online channel. We compare the impact of these variables with those of the technology acceptance model. Multiple linear regression analysis is applied to data collected through a survey answered by 1533 multichannel retail shoppers in two product categories (apparel and consumer electronics) in two countries (UK and Spain). Our findings show that both brand trust and brand attachment have a positive impact on loyal behaviours towards the online channel, and that different loyalty behaviours, i.e. purchase intentions, word of mouth and electronic word of mouth are explained by different variables.     

Customer Divestment

SUMMARY

Customer lifetime value (CLV) models are designed to identify high-value customers to be retained. By implication, the remaining customers must be divested. This aspect of CLV management, customer divestment, has not been addressed in research. In this paper we describe the process of customer divestment, report a framework enabling firms to implement customer divestment (Mittal, Sarkees, and Murshed, 2006), and identify key issues associated with the customer divestment process. In doing so, we formulate some key research questions and an agenda for future research.     

Probability Models for Customer-Base Analysis

As more firms begin to collect (and seek value from) richer customer-level datasets, a focus on the emerging concept of customer-base analysis is becoming increasingly common and critical. Such analyses include forward-looking projections ranging from aggregate-level sales trajectories to individual-level conditional expectations (which, in turn, can be used to derive estimates of customer lifetime value). We provide an overview of a class of parsimonious models (called probability models) that are well-suited to meet these rising challenges. We first present a taxonomy that captures some of the key distinctions across different kinds of business settings and customer relationships, and identify some of the unique modeling and measurement issues that arise across them. We then provide deeper coverage of these modeling issues, first for noncontractual settings (i.e., situations in which customer “death” is unobservable), then contractual ones (i.e., situations in which customer “death” can be observed). We review recent literature in these areas, highlighting substantive insights that arise from the research as well as the methods used to capture them. We focus on practical applications that use appropriately chosen data summaries (such as recency and frequency) and rely on commonly available software packages (such as Microsoft Excel).     

A Customer Lifetime Value-Based Approach to Marketing in the Multichannel,Multimedia Retailing Environment

This paper proposes a multichannel, multimedia communications framework based on the concept of Customer Lifetime Value. The framework begins with customer information from the company's database, segments the customers based on the value they provide to the company, and advocates sending targeted messages using differentiated modes of communication. The framework also closes the communication loop by identifying the appropriate modes of inbound communication for the four customer segments (“Icons,” “Go-Getters,” “Opulents,” and “Misers”), and proposes customized firm responses based on the nature/purpose of the inbound communication call. The article presents this framework in both B2C and B2B settings, offers managerial implications for implementing this framework and outlines future research directions.     

Customer Lifetime Value: Empirical Generalizations and Some Conceptual Questions

From the extant literature on Customer Lifetime Value (CLV), we identify four empirical generalizations (well-defined, consistent effects found by at least three different sets of authors): customer satisfaction, marketing efforts, cross-buying and multichannel purchasing all have positive relationships with CLV. The frequency and monetary value of previous purchases generally have a positive effect on CLV, although there are some contradictory findings in this regard. We identify additional issues that have received limited attention in the literature, but require further empirical study: the effects of pricing, earned rewards and promotions on CLV, managing a sequence of contacts to maximize response rates and CLV, and whether CLV can be forecasted sufficiently accurately. We also discuss additional conceptual issues that merit further research.     

Supply Chain Management and Retailer Performance: Emerging Trends, Issues, and Implications for Research and Practice

In an environment with increasing competition and a growing need for operational efficiencies and customer orientation, retailers are looking beyond their organizational boundaries to develop and leverage the resources and capabilities of their supply chain partners to create superior value and competitive advantages in the marketplace. In this article, the authors discuss how three recent trends—global sourcing practices, multichannel routes to market, and relationship-based innovation—are transforming the retail landscape and leading to a variety of performance improvements with regard to brand image, reputation, sales and profits, innovation, and relationships. For each of these major trends, this article highlights key issues, identifies relevant literature, and offers propositions for further research.     

Multichannel marketing: the operational construct and firms’ motivation to adopt

Multichannel marketing has been gaining attention to its importance in both practice and research in the recent years with the rapid diffusion of Information Communication Technology. Due to the relative recency and rapid proliferation of research in the subject, the literature lacks a well-defined construct of multichannel marketing generalizable to different types of firms, and lacks understanding of the actual reasons that firms adopt multichannel marketing. Through comparing and complementing the extant literature with practitioners’ perspectives from interviews with 32 Italian firms, the authors propose a comprehensive and generalizable framework of the multichannel marketing construct, and identify and categorize the firms’ motivations to adopt the multichannel marketing practice. Furthermore, some unforeseen but interesting factors emerged from the interviews. Future research opportunities and managerial implications of the study are discussed.     

The Effects of Channel Experiences and Direct Marketing on Customer Retention in Multichannel Settings

In customer relationship management (CRM), it is critical for managers to understand how and when customers terminate their relationships with the company in order to make more accurate predictions for CLV. However, in many non-contractual settings, customer churn is not easily observed, which presents difficulty for estimating customer retention. In this research, we present a framework for estimating multichannel customer relationship dynamics in a non-contractual setting that flexibly allows for relationship revival and investigates the effects of different channel experiences and marketing communication on retention and profitability. We use a multi-segment, multivariate hidden Markov modeling framework to model three managerially relevant customer behaviors: purchase amount, purchase incidence, and channel choice. Using data from a multichannel clothing retailer, we uncover two latent relationship states that customers migrate to and from — an active state and an inactive state characterized by different levels of purchase frequency, responsiveness to marketing, and profitability. We find that an offline (retail-store) channel can be used to migrate customers from an inactive state to an active state, effectively serving the purpose of “education” or “revival,” whereas an online channel is most effective in keeping the existing active customers active, thus serving the purpose of “retention”. Using counterfactual analysis, we highlight an opportunity for the multichannel firm to optimize marketing strategies to dynamically manage and increase the retention and hence also the value of its customer base.     

Relating strategic market orientation and market performance: role of customer value types

A service provider achieves competitive advantage by configuring appropriate strategic orientation and customer value type. This paper addresses three important issues: (i) which customer value type (economical, relational or technical) is important for bank customers? (ii) which strategic market orientation (customer or competitor) helps in achieving the desired value type? and (iii) which value type significantly predicts market performance? We propose that a strategic market orientation pursued by a firm shall influence the customer value it intends to offer so as to maximize the market performance. Using data collected from 538 bank customers, this study reveals that when there is a perfect match between strategic market orientation and value being perceived by its customers, a firm shall achieve strategy-value fit and realize optimal market outcomes in the form of customer satisfaction, acquisition, retention, cross-selling, and up-selling. Furthermore, a bank shall realize maximum level of market performance if it pursues both customer and competitor orientation and endeavors to deliver technical/functional value to its target customers. The paper concludes with managerial implications and future research directions.     

Enhancing value for Chinese shoppers: The contribution of store and customer characteristics

This study tested the relationships between store and customer characteristics with perceived value and customer loyalty in retailing in China. Survey data were collected from shoppers in department stores (n=200) and supermarkets (n=200) in the tier 2 coastal city of Tianjin. Data for each type of store were analysed separately using structural models. In supermarkets, value was predicted by quality and price, but for department stores, only the customer orientation of the store was significant, suggesting that customers seek different shopping experiences in each context. In each case, value mediated the links to loyalty and, for supermarkets, choice of merchandise and consumer time pressure demonstrated direct links to loyalty. The paper discusses the implications of the findings, and concludes with possible future research.     

Perceived customer care and privacy protection behavior: The mediating role of trust in self-disclosure

The COVID-19 pandemic has been a chance and a boost for those retailers that develop their online profile. This new context can raise privacy issues on the consumer side. For this reason, here we explore the determinants of online self-disclosure, and its relationship with customer care. We collected the data through an online survey (n = 426) and tested a variance-based structural equations model. The findings unriddle the role of perceived customer care as an antecedent of both perceived control and trust, the latter emerging as a key mediator of the impact of both perceived customer care and privacy concern on self-disclosure. Moreover, in line with previous studies, perceived control was found to be positively related with trust, and negatively with privacy concerns. According to the findings, we draw several managerial implications and suggest future research paths.     

Cross-channel integration – is it valued by customers?

It has been common for retail companies to use multiple channels simultaneously. However, simultaneous use is only the first step in creating a customer-centric multichannel system that demands channel synergies rather than parallel retail formats. Therefore, the perceived integration of customer-related functions and processes between the channels of multichannel systems is analyzed with respect to its significance for customer loyalty and usage of a multichannel system. Drawing on a sample (n) of 981 customers, the results indicate that linkages between retail channels positively affect customer loyalty and verify the importance of establishing a well-integrated – ‘seamless’ as perceived by the customer – multichannel system.     

Transforming the Customer Experience Through New Technologies

New technologies such as Internet of Things (IoT), Augmented Reality (AR), Virtual Reality (VR), Mixed Reality (MR), virtual assistants, chatbots, and robots, which are typically powered by Artificial Intelligence (AI), are dramatically transforming the customer experience. In this paper, we offer a fresh typology of new technologies powered by AI and propose a new framework for understanding the role of new technologies on the customer/shopper journey. Specifically, we discuss the impact and implications of these technologies on each broad stage of the shopping journey (pre-transaction, transaction, and post-transaction) and advance a new conceptualization for managing these new AI technologies along customer experience dimensions to create experiential value. We discuss future research ideas emanating from our framework and outline interdisciplinary research avenues.     

Evolution of retail formats: Past,present, and future

In this paper, the authors review current literature on retail formats and propose a new customer-centric framework for retailers to focus on as they continue to innovate and evolve. Specifically, they review the literature on how formats compare in their attributes and compete with each other; the role of customer behavior in format choice; and developments in multichannel and omnichannel retailing. They propose a framework for retail formats suggesting two paths – either reduce friction in the customer journey or enhance customer experience. They discuss the challenges faced by offline (physical store-first) and online (digital-first) retailers and elaborate on strategies each type of retailer is pursuing to address these challenges. Finally, they offer directions for future research in this domain. They conclude by calling for newer digital-first and physical-first players to continue coming up with different customer-centric formats, which they predict will slowly morph into integrated retailers, leaving space for newer players to enter the market and hence keep the wheel of retailing spinning.     

新零售企业多渠道整合服务质量对重购意愿的影响--顾客涉入度的调节作用

采取线上线下多渠道整合的零售模式已成为新零售企业主流模式,顾客重购意愿是新零售企业重要竞争力之一,也是衡量多渠道整合服务实施效果的重要标准。通过构建以顾客体验为中介的多渠道整合服务质量对重购意愿影响概念模型,引入顾客涉入度作为调节变量,经过调查分析384名在同一新零售企业线上线下渠道有购物经历的消费者,研究结论如下:多渠道整合服务质量对重购意愿有显著积极影响;多渠道整合服务质量对顾客体验有显著积极影响;顾客体验对顾客重购意愿有显著积极影响;顾客体验在多渠道整合服务质量与重购意愿之间起部分中介作用;顾客涉入度在多渠道整合服务质量与顾客体验关系中起正向调节作用。研究结论拓展了多渠道整合服务质量对重购意愿影响的内在机理,明确了顾客体验在其中的重要中介作用,探明了顾客涉入度在多渠道整合服务质量影响顾客体验过程中的重要调节作用。新零售企业既可以通过多渠道整合服务质量提升顾客重购意愿,也可以通过极致的顾客体验提升重购意愿,而且通过加强顾客涉入度管理可有效提升顾客体验与重购意愿。