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A New Kind of Business

As retail stores added catalogs and/or the Internet to their channel mix, they initially feared cannibalization of customers and sales by the new organizations within their own companies. Also, most corporate structures created profit and loss silos within the organization, intending to effectively measure each type of store. In actuality, it set up the sister channels and stores to compete against each other for customer sales, internal resources, and power. There was no top-level support for integration.

What results from this model is disintegration, when individual stores have no incentive to share their best practices and information or leverage promotions to their sister stores. A few businesses now recognize the importance of integration across all of their stores to maximize sales, marketing activities, customer experiences, infrastructure and supply chain efficiencies, and overall corporate profits. They are creating and applying new business models that recognize integration to create a whole that is greater than the sum of the individual parts.

A fundamental integrated marketing principle determines that every point of contact with a customer is a chance to communicate coordinated, consistent messages. Multiple impressions result in a higher chance of action including product purchase. Common representation across a business's multiple-channel shelves also maximizes its brand and marketing programs or activities.

Integrating models can solve home or business delivery obstacles. For example, some retailers allow customers to find, select, and purchase online and then go into the retail store to pick up the products. Other businesses enable customers to return a web-purchased product to a retail outlet or make it easy to return the item. Nordstrom's provides a postage-paid, return envelope and clear return instructions with each new order. Returned items can be simply put into the envelope and conveniently placed in any U.S. mailbox, even from home.

In some major metropolitan areas, store trucks deliver the merchandise to a business customer's location. In New York City and other densely populated locales, Mercanti Systems offers a retail/Internet model in which the customer can shop online and then pick up paid-for merchandise at a special no-wait window at the store—even while walking home from work. This capability works just as conveniently in less urban environments—for example, while driving home from work or running family errands.

Integrating Multiple Web Properties

With channel alliances and mergers, some businesses ended up with multiple web properties. These properties can consist of a variety of public Internet e-commerce websites catering to consumer, business, community, or niche markets. They can also be intranets—providing information and content to internal "customers" in an organization, users of the information—or extranets—providing private access to another business for commerce, content, information, or service.

Integrating and centralizing systems optimizes resources, minimizes redundancies, and provides consistent information and common deployment of information. One data source can serve the variety of websites in a company's domain. This saves resources and provides consistency of information that is "served up" from one source to many websites. Commerce, community, product information and training, and technical support websites can be served by one web server farm. This is the future of the Internet.

Who's Minding the Store?

Which department in your organization is responsible for the customer experience? Along with a new business must come a new dynamic within the organization itself. There are many people and many departments that make up an online store and most are organized in functional areas. Yet, in most companies, no central group is responsible for the customer experience.

Even though there is no official responsibility, everyone has an influence on the customer. Each department—buyers, merchandisers, marketing departments, and IT departments—impact the online store. However, internal measurements can conflict with successful customer navigation requirements. For example, buyers may be measured on product margins, IT departments may be measured on efficiencies of code and ease of database maintenance, and marketing departments on how much advertising space is sold and revenue brought in. Translated online, buyers would promote higher margin products, IT might develop practical yet non-intuitive navigation models, and marketing would create advertising and promotional boxes on the web. These all could directly conflict with customer navigation and purchasing tasks.

Not only do the goals conflict with the customer experience, but they also conflict with each other. Collapsing department boundaries and integrating teams across the traditional boundaries will foster a website that more easily creates the right balance of influencing factors for the store. It takes all people and departments in an online store to make a good online organization that recognizes the value of the customer experience. The organization needs support from the top to achieve a website that is a balance of customer focus and store business drivers.

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