I’m almost tired of the word. It hasn’t reached the status of “robust” or “ubiquitous”, but everywhere I turn the term convergence is being thrown around. It does wrap around the concept it describes like polar fleece on a cold New England night.
Beyond the crisis of our recession and the recalibration of American consumer spending, we are experiencing a revolution in our access to information about pricing and products. As if merchants didn’t have enough problems, they now have to chase a customer that is already three steps ahead of them.
In the 1980s the retail community was made up of leaders. Fashion trends were dictated by New York and Paris, the head merchant at Bloomingdale’s could celebrate a country or designer and the customer would follow. Pricing was managed behind the scenes. If we were willing to spend our days bouncing from store to store, we could trade gas and time for a better price. Mostly we did not.
Paco Underhill and David Selinger, CEO of RichRelevance, present new perspectives on multichannel convergence at the National Retail Federation Big Show, January 2010
In 2010 the power and convenience is in the consumer’s hands. Between the web enabled mobile phone, the Internet and world of brick and mortar, we can find the cracks and inconsistencies in the business models of our merchant and banking communities. Our citizens are challenging the basic concept of branding. If multiple entities have the same name they must be connected. Our business branding gurus are having their lunch handed back to them.
If I have a Citibank credit card and Citibank bank account doesn’t that count for something? If I want a Citibank mortgage – how does putting all my financial eggs in the same basket benefit me? The sad truth is that it doesn’t.
It’s even worse in the multichannel retail world. Where the store, the website and catalog may all report to different masters. That cooking set may be sold in the three different places at three different prices and subject to different sales and promotions. What a mess.
Our multichannel world needs to get its ducks in a row. We need to be singing at least from the same hymnbook, if not the same hymn. The point of convergence is to advance this revolution of supply chain management, putting it not only into hands of merchants, but into the pockets and acquiescing protocols of customers as well.
We have a lot to gain from sorting out the mess. We should be able to shrink the size of our stores. Want to buy it and take it home now – one price; buy it now and get it next week at a discount. Buy online and forgo the shipping cost by picking it up in the store. That’s just the start of a pricing revolution.
A web-enabled phone also resets our advertising model. Why blanket coupons through the Sunday paper when you can deliver them in-store? Manage loyalty programs, not just on purchase patterns, but based on a permission-based personalization. That dress matches the sandals you bought last month.
It also sets up the greening of packaging, where instructions are downloadable and product information is customized based on the ability to know exactly who you are communicating with.
Rich Relevance and Envirosell are collaborating in the multichannel clean up. Check us out and try us on.