Customer-Centric Retailing 101: Customer Intelligence and ... - Stores

The 2012 Omni-Channel Retail Experience 

Aberdeen’s November 2010 Cross-Channel Roadmap report indicates that 

74% of multi-channel retail operations are characterized by separate and 

siloed channels, resulting in poor brand and customer management. This 

year’s results indicate that leading retailers are making the move to align the 

brand, align their product offerings, and align their marketing messages to 

achieve a uniform customer experience across all channels For example, 

50% of Leaders (see definition below) surveyed indicated their top strategic 

objective for 2012 is to ensure product availability across all channels. This 

one strategy incorporates the alignment of the brand, product assortment, 

and messaging, for an integrated multi-channel view at all levels of the 

organization. 

Between November and December 2011, Aberdeen investigated the state 

of omni-channel retail operations for 80 organizations (see definition 

below). This Analyst Insight will examine how retailers are aligning the 

brand across channels for a seamless shopping experience. 

Customer Demand is Driving Channel Integration 

Omni-channel retailing is all about the continuous enhancement of multichannel 

workflow integration within merchandising, order management, 

marketing, and customer experience. Omni-channel retailing is defined as a 

set of integrated processes and decisions that support a unified view of a 

brand from product purchase, return, and exchange standpoint irrespective 

of the channel (in-store, online, mobile, call center, or social). 

According to 49% of respondents for this report, the top business pressure 

driving retailers to focus on a channel integration strategy is lost sales 

opportunity costs (Figure 1). Sales can be lost due to myriad factors, 

including price, product availability, technology failure, or customer service 

issues. In difficult economic times, customer loyalty diminishes contraction, 

and price / promotions become a determining factor for customer traffic. 

According to the October 2011 Customer-Centric Retailing report, the 

second top pressure felt by 39% of retailers surveyed is that price is driving 

the shopping decisions of their customers. 

When it comes to lost sales opportunity, retailers need to be aware of their 

competition, especially from a product and pricing standpoint. Price 

matching can only go so far; the retailer that has the product in stock and 

can deliver to the customer via their channel of choice at the right time and 

right price will win the business. Besides the obvious opportunity cost of 

not making the sale, retailers are also spending money on marketing 

programs to promote the products, merchandising strategies for allocating 

the products to stores and other channels, and staff to meet the anticipated 

January, 2012 

Analyst Insight 

Aberdeen’s Insights provide the 

analyst perspective of the 

research as drawn from an 

aggregated view of the research 

surveys, interviews, and 

data analysis 

Demographics 

Of the 80 responding retail 

organizations, demographics 

include the following: 

Job title: Senior Management 

(27%); EVP / SVP / VP (14%); 

Director (14%); Manager 

(25%); Consultant (15%); 

other (5%) 

Department / function: Sales 

and Marketing (37%); IT 

(17%); Corporate 

Management (11%); Finance 

(6%); Supply Chain / Logistics 

(17%); other (12%) 

Segment: Apparel (14%); 

Consumer Products (17%); 

Specialty (18%); Grocery 

(9%); Hospitality (14%); 

Consumer Electronics (16%); 

Other (12%) 

Geography: North America 

(64%); APAC region (11%) 

and EMEA (25%) 

Company size: Large 

enterprises (annual revenues 

above US $1 billion)- 35%; 

midsize enterprises (annual 

revenues between $50 

million and $1 billion)- 22%; 

and small businesses (annual 

revenues of $50 million or 

less)- 43% 

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and 

represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. 

and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.


Page 2 

demand. Overcoming the competitive challenges can alleviate some of the 

wasteful spending, while contributing to top-line sales. 

The second pressure, identified by 42% of respondents, is customer 

expectations of a similar experience regardless of channel. This pressure 

indicates that consumers are anxious for “anytime, anywhere” retailing, 

which puts a heavy focus on digital channels. This means that products must 

be available across all channels (rather than be channel-specific). 

Furthermore, pricing structures must be consistent and “in-line” across 

supported channels, and the overall experience must meet certain brand 

objectives. Aberdeen data from this year’s omni-channel survey shows that 

the top three elements of an omni-channel strategy are the quality of the 

overall shopping experience (54%), secure transactions (49%), and 

merchandise availability (43%). These elements require retailers to align 

their business processes and technology across channels to ensure that 

customers can purchase, fulfill, and return orders through separate 

channels. This poses a serious problem, however, as 58% of respondents 

indicated little to no integration of their business processes, and 56% 

indicate little to no integration of technology. 

Figure 1: Top Omni-Channel Pressures 

Lost sales opportunity costs 

Customer expects similar experience 

regardless of channel 

Inconsistent branding across channels 

© 2011 Aberdeen Group. Telephone: 617 854 5200 

www.aberdeen.com Fax: 617 723 7897 

35% 

42% 

49% 

0% 10% 20% 30% 40% 50% 60% 

Percentage of Respondents, n=80 

Source: Aberdeen Group, December 2011 

The third major pressure felt by 35% of retail respondents is inconsistent 

branding across channels. According to the June 2011 Multi-Channel Retail 

Marketing report, retailers have identified a dramatic shift in the way 

customers want to be marketed to, with the emergence of digital channels 

and prominence of social media. As retailers use multiple channels to 

connect with their customers, the brand must remain consistent. 

Inconsistent messaging, pricing, promotions, or experiences cause customer 

confusion, leading to low customer satisfaction and reduced spending. 

“As we successfully penetrate 

new markets and deliver a 

consistent brand experience to 

more and more customers, we 

expect to reap many benefits 

from higher volume production 

and procurement. Done right, 

this should translate into lower 

costs and even better quality 

for our customers, while 

assuring very healthy margins 

for us and our channel 

partners.” 

~ Manager, Small Consumer 

Electronics Retailer, North 

America


Page 3 

Retailers need to ensure that certain principles, such as branding and style 

guidelines and the voice of the retailer, are evident in all communications 

and all touch points, regardless of channel. 

Defining the Leaders 

Aberdeen used three key performance criteria to distinguish the Leaders 

from the Followers: current customer satisfaction, current on-time order 

delivery, and year-over-year change in revenue. Aberdeen defines “Leaders” 

as the top 30% of aggregate performance scorers using the criteria in Table 

1 below. “Followers” represent the remaining 70% of scorers. When looked 

at as a unified set of performance these Key Performance Indicators (KPIs) 

are the basis from which to understand how top performers are improving 

or enhancing omni-channel retailing. 

Table 1: Top Performers Defined as Leaders 

Definition of Maturity 

Class 

Leaders: 

Top 30% of aggregate 

performance scorers 

Followers: 

Remaining 70% of 

aggregate performance 

scorers 

Mean Class Performance 

Current Customer Satisfaction (CSAT): 95% 

Current On-Time Order Delivery: 98% 

Year-over-year increase in revenue: 19% 

Current Customer Satisfaction (CSAT): 79% 

Current On-Time Order Delivery: 84% 

Year-over-year increase in revenue: 6% 


A Leading Approach to Omni-Channel Retailing 

As Figure 2 shows, leading retailers have identified three key strategic 

actions in response to the pressures mentioned earlier. First, 50% of 

Leaders, compared to 38% of Followers, ensure product availability across 

all channels. By ensuring products are available to customers through their 

channel of choice, retailers are not alienating their single-channel customers. 

Rather, they are expanding product availability, and allowing for up-sell and 

cross-sell opportunities. Cross-department collaboration is required to 

make this a reality, as order management and fulfillment strategies must be 

aligned for in-store, web, mobile, call center, and social orders. Product 

information updates must also be a key component to maintaining accurate 

product availability and pricing for all channels. 

Thirty-one percent (31%) of Leaders, compared to 21% of Followers, are 

developing an omni-channel marketing and promotions plan. According to 

data from the 2011 Cross-Channel Roadmap report, all retailers, Best-in- 

Class included, were lagging in their channel unification processes for 

marketing and loyalty, with only one-third (33%) of respondents enabling 

cross-channel loyalty promotions. It is not surprising that that leading 

retailers have made this a core strategic item for 2012. A roadmap for 

“Customers simply want it 

now. The product must be 

available, shipping or pick up 

easy, payment a non-event. To 

us this is a top=line issue. Price 

compression in consumer 

electronics means you have to 

get every sale. Making sure 

your customer can get what 

they want when they want is 

paramount to growing your 

business.” 

~ Charles Brown, Executive at 

The Source 

Best-in-Class Definition 

Aberdeen used three key 

performance criteria to 

distinguish Best-in-Class 

companies in the November 

2010 Cross-Channel Roadmap 

report: 

Current customer 

satisfaction (CSAT): 91% 

Year-over-year increase in 

average basket size: 22% 

Year-over-year increase in 

revenue: 21% 


www.aberdeen.com Fax: 617 723 7897


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creating an omni-channel promotions plan will alleviate the problems caused 

by inconsistent offers between various channels, and will help to stop 

customers from price shopping channel to channel as another competitive 

complexity. 

Figure 2: Best-in-Class Strategic Actions 

Percentage of Respondents 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

50% 

38% 

Ensure product availability 

across all channels 

31% 

21% 

Develop an omni-channel 

marketing and promotions 

plan 

Leaders Followers 



25% 

18% 

Establish omni-channel 

performance metrics 

n=80 


A third action identified as crucial for Leaders in 2012 is to establish omnichannel 

performance metrics (25%). Retailers have had standard metrics in 

place to determine their relative success within a specific channel. However, 

as new channels emerge, and the shopping experience continues to evolve, 

retailers are re-thinking how they measure success. Leaders, in particular, 

are establishing new ways to gauge the overall shopping experience by 

combining tried and true metrics with emerging technology metrics, from 

customer satisfaction scores and mystery shopping reviews to return on 

marketing investment and revenue. An increased focus on on-time order 

delivery, for example, ensures the seamless execution of the order, 

incorporating pricing and promotions with supply chain technology. It allows 

for an end-to-end view of the retail enterprise, touching on all customer 

touch-points and interaction points. 

Aberdeen Insights — How Do Leaders Use Metrics? 

Ultimately, new shopping channels require more cohesive measurement and 

sharing of performance metrics. As a result, retailers must ensure they are 

able to measure and quantify the impact of their omni-channel strategy. 

Continued... 

“We have experienced a 5 % 

increase in customer 

satisfaction by providing the 

same product offering across all 

channels.” 

~ Director of IT, Large General 

Merchandise Retailer, Europe


Page 5 

Aberdeen Insights — How Do Leaders Use Metrics? 

Thirty-one percent (31%) of Leaders indicate they can quantify the impact of 

their strategy and have the data to validate it, and an additional 46% can 

quantify it, but do so using a soft measurement (i.e., a “gut” feel). Followers, 

by comparison, are less than half as likely to quantify the impact of their 

strategy (16% and 19% respectively). Quantifying the omni-channel impact 

also requires retailers to rethink how they measure success. For example, 

according to Aberdeen’s September 2011 Mobile and Tablet Demystified 

report, the most important metrics to measure include customer 

satisfaction, percentage of business from repeat customers, gross margin, 

cross-sell and up-sell, and marketing’s contribution to company revenue. 

Measuring these metrics is all part of the strategy to reap expanded 

commerce benefits, such as improved customer satisfaction, improved 

customer profitability, and increased brand awareness. 

Figure 3: Leaders Use of Omni-Channel Metrics 


80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

71% 

19% 

Inventory metrics 

measured and 

tracked across 

channels 

64% 

32% 

Sharing of 

performance metrics 

46% 

20% 

Metric-based 

compensation 

incentives 



43% 

14% 

Measurement of 

CSAT at every 

touch-point 

Leaders Followers n=80 


The social channel is also changing the way retailers are measuring success. 

According to the August 2010 Social Media ROI report, the most valuable 

social media KPIs include the quality of customer insights, number of repeat 

visitors, and quality of new sales leads. The wide assortment of metrics for 

various channels indicates that establishing standard performance metrics 

will allow retailers to better understand their omni-channel success. Figure 3 

above indicates that Leaders are more consistent than Followers in the 

measurement of inventory and customer satisfaction metrics across 

channels, sharing of performance metrics across channels, and to provide 

metric-based compensation to employees. The connection between these 

metrics cannot be overlooked, as improved inventory allocation will impact 

on-time order delivery. On-time orders reduce inventory costs, which will a 

positive impact on GMROI. 

"By tracking individual 

performance metrics and 

providing a pay-off we can 

increase performance and 

change the aspects of individual 

performance driven toward the 

ideal characteristic.” 

~ Donald Clark, CIO at Sanuk


Page 6 

Omni-Channel Capabilities 

To execute an omni-channel retail strategy, retailers must develop a 

foundation of business process, organizational, knowledge, and performance 

management capabilities. 

Leaders have shown that executive buy-in for an omni-channel strategy, 

improved tracking of technology performance, and enabling the customer to 

own the experience are keys to omni-channel success (Figure 4). To 

execute the strategy at hand properly, and fulfill the customer’s 

expectations, retailers need the support of senior management to make 

omni-channel retailing a key pillar of the business. 

Fifty-seven percent (57%) of Leaders, compared to 46% of Followers, have 

executive buy-in for their omni-channel strategy. This buy-in allows for 

retailers to develop an appropriate IT and business process roadmap for 

enabling an all-channel experience. Without senior leadership’s support, 

roadblocks will form, from a budgeting, staffing, and training standpoint. 

Followers do not have that same level of executive support, which hinders 

the development of new technology and processes, and discourages new 

ideas. Their executives do not provide the necessary direction to make the 

omni-channel experience dynamic to the customer. In fact, 54% of retailers 

that have executive buy-in indicate a large extent of integration of 

technology tools across all channels, compared to only 30% of those 

without senior level buy-in. 

Figure 4: Process and Organization Capabilities 


60% 

50% 

40% 

30% 

20% 

10% 

0% 

57% 57% 57% 

46% 

Executive buy-in for 

omni-channel 

strategy 

43% 

Tracking of omni- 

channel technology 

failure rates 

27% 

Ability to purchase, 

return, exchange 

product through any 

channel 




50% 

24% 

Ability to ship online 

orders from the 

store 

n=80 


Fifty-seven percent of Leaders are currently tracking omni-channel 

technology failure rates, compared to 43% of Followers. Omni-channel 

retailing consists of multiple operational modules (merchandising, marketing,


Page 7 

supply chain / logistics, data and analytics, CRM, etc.) and multiple channels 

(in-store, online, mobile, social, call center), which means there are many 

moving parts to every interaction or transaction. Leaders are doing a much 

better job of monitoring all these interrelated technologies, and ensuring 

they do not experience critical down-time. Down-time is one of several 

reasons retailers are feeling the pressure of lost sales opportunity costs; if 

the consumer cannot check out, or cannot access product information, they 

will most likely move on to a retailer that can fulfill their request. Order 

management technology, for example, is closely tied to all channels of 

operations. A critical failure of this system will impact every channel, and 

result in lost sales opportunities. 

Leading retailers are more than twice as likely as Followers to enable 

customers to dictate the channel experience. Leaders shine in two specific 

areas within this channel experience. First, Leaders' customers can 

purchase, return, and exchange products through any channel. This allows 

customers to purchase an item through one channel and return or exchange 

it through another channel. Customers are seeking a similar experience 

regardless of channel. This capability allows for that seamless transition 

between channels, and removes the complexities for the customer. Target, 

for example, allows customers to order products online and return or 

exchange them in-store as part of their omni-channel strategy. 

The second part of the channel experience is the ability to ship online 

orders from the brick and mortar store. As mentioned above, lost sales 

opportunity costs are the biggest driver for omni-channel strategic growth. 

Shipping online orders from the store helps maintain on-time order 

fulfillment rates, and eliminates the risk of the customer turning to a 

competitor due to an out of stock situation. The online store is continuing 

to gain traction, and retailers must ensure they can meet growing demand. 

The store may be closer than the nearest distribution center, and therefore 

will be able to get the product to the customer sooner without added 

shipping costs. Additionally, if the distribution center is out of stock on an 

item, the store network can fulfill the order seamlessly, without the 

customer worrying about the product being back-ordered. 

It’s all in the Data 

Today’s retail world is data driven. Retailers have vast amounts of data on 

hand about their customers, their suppliers, their employees, and their 

business as a whole. When it comes to data collection and dissemination, 

Leaders are head and shoulders above the Followers across several key 

areas of the business. Leaders are more than twice as likely (79% versus 

38%) as Followers to have accurate demand data across all channels. This is 

consistent with Aberdeen’s findings from the June 2011 Mission Critical 

Merchandising report, which indicated that more than one half of all 

retailers are striving to improve their demand forecasts and, as a result, the 

accuracy of their merchandising plans, assortment-mix, inventory allocation, 

and replenishment. Assessing demand is crucial for retail success, as 

inaccurate demand sensing leads to lopsided merchandise assortments. By 

“There is a huge inefficiency in 

having product in the wrong 

channel that cannot satisfy the 

demand in the other channel 

(e.g. brick-and-mortar stores v. 

internet customer). There is 

also a huge issue with not 

having the correct product in 

the retail store since it cannot 

carry all of the items shown online 

(in our situation).” 

~ Director of Corporate 

Management, Small Specialty 

Retailer, North America 




Page 8 

accurately assessing demand for all channels of commerce, Leaders can 

allocate the proper assortment for stores, as well as distribution centers for 

web, mobile, and call center orders. Sharing this information across channels 

helps reduce dreaded stock-out situations, which drive customers to the 

competition, or over-stock situations where merchandise needs to be 

liquidated at a loss. Demand data also drives staffing decisions, with more 

associates (in-store or call center) required during peak shopping times to 

eliminate overly long waits. Retailers that can accurately predict demand for 

all channels have reduced lost sales opportunities costs by 12%, compared 

to only a 7% decrease for those unable to predict demand. 

Figure 5: Data-Centric Capabilities 


90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

79% 

Accurate demand data for 

all channels 

64% 

38% 36% 

Customer data collection 

for all channels 



57% 

29% 

Order management 

information is shared 

across channels 

Leaders Followers n=80 


To help drive accurate demand data, Leaders are 1.8 times more likely (64% 

compared to 36%) to collect and aggregate customer data for all channels. 

The sheer volume of customer data that is available makes this capability 

increasingly important. Customers are shopping and interacting through 

more channels than ever before and retailers need to continue to collect 

relevant and accurate data for these customer interactions. This data can be 

used for demand sensing, marketing programs, merchandise assortments, instore 

layouts, staffing levels, and customer engagement strategies. Leading 

retailers are more efficient in how they collect, aggregate, and share data. 

Additionally, retailers collecting customer data for all channels reported a 

17% increase in average transaction value, compared to a 10% increase for 

those without this capability. Followers are missing out on an incredible 

opportunity to learn about their customers, which in turn will allow them to 

learn more about their business and help shape their future omni-channel 

roadmap. Brooks Brothers, for example, collects customer data across all 

channels, and aggregates this data into a centralized customer database for 

targeted marketing promotions. 

The third area of data capabilities where the Leaders are raising the bar is in 

the sharing of order management information across channels (57% versus


Page 9 

29%). Order management systems keep track of customer orders, product 

information, stock levels, and fulfillment. Sharing this data across channels 

allows for more visibility into the business, and makes it possible for 

managers to make more agile business decisions regarding their 

merchandise mix, marketing promotions, pricing structures, and vendor 

relationships. Sixty-four percent (64%) of Leaders are also using product 

information management (PIM) technology to update product information in 

real-time, which has a direct impact on the three highlighted capabilities in 

this section. 

Best-in-Class Enabling Technology 

Combined with the capabilities mentioned in the section above, technology 

solutions are the second part of solving the omni-channel puzzle. 

Omnichannel solutions work with the inherent capabilities of retailers to 

meet customer demands while building out their channel integration 

strategies. Aberdeen data has shown that leading retailers use technology 

enablers in three distinct areas to improve their omni-channel processes: 

customer-facing, data-driven, and marketing technology. 

Core Customer Technology 

Figure 6 below shows the evolution of the omni-channel environment, and 

the new norm for top performing retailers. 

Figure 6: Customer-Facing Technology 


80% 

60% 

40% 

20% 

0% 

79% 

54% 

Retail e-commerce 

solution 

71% 

42% 

Integrated call 

center for order 

processing 

64% 

34% 

Cross-channel 

order 

managementready 

POS 




50% 

24% 

Online chat tool 

n=80 


Seventy-nine percent (79%) of Leaders, compared to 54% of Followers, use 

an e-commerce storefront as part of their omni-channel strategy. The digital 

storefront is moving to the front and center of the retail landscape, with 

more retailers deploying mobile web storefronts as well. The virtual store


Page 10 

allows for the increased use of web analytics to personalize marketing 

content and product recommendations. According to the February 2011 

Next Generation Customer Loyalty report, retailers that are able to 

personalize online marketing messages have seen 16% increase in retention 

rates, and a 15% increase in response rates. Aberdeen’s data is also showing 

that Leaders are twice as likely as Followers to use an online chat tool. The 

online chat tool serves as a customer engagement point. It can be used to 

offer product recommendations and consultations, answer customer 

inquiries or complaints, or to simply chat about specific features of the 

product. Retailers like Home Depot have extended the simple use of an 

online chat tool to their mobile application, allowing for instant access to a 

brand representative. 

Leaders are nearly twice as likely as Followers to use an integrated call 

center for order processing. The integrated call center acts as another key 

customer interaction point. The call center can process web, store, or 

mobile orders, and arrange for delivery or pick-up at a time and location of 

the customer’s choice. Additionally, when the call center is integrated with 

other channels, call center representatives have real-time access to product 

information, availability, delivery timeframes, pricing and promotions, and 

related product recommendations. This seamless transition between the 

channels is what the customer is looking for out of its omni-channel 

experience. 

The final customer-related technology enabler that Leaders are more likely 

to use than their competitors is the cross-channel order management-ready 

point of sale (POS) system. The POS is the lifeline of brick and mortar store. 

It has evolved from the simple cash register to a marketing, data collection, 

and inventory engine. An order management-ready POS system links the 

brick and mortar store to the other available channels, and can help to 

facilitate delivery of an out-of-stock item, or fulfill an online order during the 

in-store pick-up. The POS can also collect a lot of customer data for 

retailers, who can incorporate this data into the order management system 

to track customer spending habits accurately. Retailers using a cross-channel 

order management-ready POS have a customer satisfaction score of 89%, 

compared to a score of 83% for those not using this technology as a result 

of increased visibility into the order and fulfillment process. Marks & 

Spencer is an example of a retailer using a cross-channel order 

management-ready POS to increase order visibility for higher customer 

satisfaction and improved on-time order rates. 

Data is Driving Retail 

The use of data intelligence technology in retail is continuing to evolve, with 

Leaders making more informed decisions about many facets of the business 

as a result. Aberdeen data shows that 86% of Leaders, compared to 55% of 

Followers, use a business intelligence (BI) stack as part of their omni-channel 

strategy. A BI stack consists of data collection, analysis, reporting, and 

dashboards, and can be used to assess the status of the business. The BI 

stack makes it possible for retailers to analyze customer, financial, and 

“Inventory availability across 

channels will reduce markdown 

cost. Seamless interactions 

with customers across all 

channels will increase sales. In 

depth customer information / 

history across all channels at 

point of interaction with 

customer will increase sales. 

~ Gordon Russell, Corporate 

Management at In the Pink 

Stores, Inc. 




Page 11 

operational data across all channels. It also makes for quicker decisions by 

management for changes to the business plan. 

For example, according to the October 2011 Retail Business Intelligence 

report, the median time to decision after an event for those retailers using 

BI was about 20 minutes, compared to 48 hours for retailers not using BI. 

This shows the importance of a BI stack for a retailer. Losing two complete 

business days before a decision can be made can be catastrophic for 

promotional calendars or the merchandising mix. The ability to make that 

decision in twenty minutes can help satisfy customer demand, and decrease 

the odds of customer abandonment. 

Figure 7: Data Enablers 


90% 

75% 

60% 

45% 

30% 

15% 

0% 

86% 

55% 

Business Intelligence 

stack 

71% 

58% 

Centralized data 

warehouse 




50% 

21% 

Predictive Analytics 

n=80 


Fifty percent (50%) of Leaders, compared to a mere 21% of Followers, are 

using predictive analytics in their omni-channel approach to retail. Predictive 

analytics use statistical modeling and theory to analyze information and 

make predictions about future events. These predictions are used to design 

marketing campaigns, cross-sell campaigns, product recommendations, and 

demand sensing. By aggregating all channel data into a single repository, the 

predictive analytics application can make better predictions for omnichannel 

customer behavior and purchasing patterns. Leading retailers are 

using predictive analytics as a core part of advancing their current marketing 

capabilities. 

Figure 7 above also shows that Leaders are 1.2 times more likely to use a 

centralized data warehouse than Followers (71% compared to 58%). The 

siloed nature of multi-channel retail operations is still a barrier to data 

sharing. Many retailers view the individual channel as its own business unit, 

with a distinct data collection strategy. Leaders, however, are moving 

beyond the traditional siloed nature of retail. The centralized data 

“Visible data across all channels 

can stimulate healthycompetition 

within the 

business, streamline and make 

the deal approvals uniform / 

consistent...which maintains or 

grows margin...which maintains 

compliance and shortens the 

sales cycle.” 

~ Vice President, Corporate 

Management, Small CPG 

Company, North America


Page 12 

warehouse allows for separate channels to share information on the 

customer and the business. The single data warehouse serves the needs of 

all operating channels, allowing employees to pull the data they need to 

better assist their customers. As retailers collect and analyze data across 

channels, the centralized data warehouse will help provide the seamless 

movement between channels that consumers seek. 

Marketing Technology 

Leading retailers have identified three key marketing technology 

components for driving their omni-channel strategy: social media monitoring 

tools, cross-channel promotion and marketing management solutions, and a 

catalog management system. 

Currently, 54% of Leaders use social media monitoring tools, compared to 

30% of Followers. Leading retailers collect massive amounts of customer 

data through social networks, and use this information for marketing and 

engagement opportunities. Retailers such as Best Buy and New York & 

Company have used social listening to respond in real-time to customer 

inquiries, with an increased focus around the holiday shopping season. 

Figure 8: Marketing Enablers 


60% 

45% 

30% 

15% 

0% 

54% 

30% 

43% 

34% 

Social media monitoring Cross-channel 

tools 

promotion and 

marketing management 

solution 


36% 



14% 

Catalog management 

system 

n=80 


Leaders are also using a cross-channel promotion and marketing 

management solution to further their omni-channel strategy. This 

technology is important for aligning the marketing team’s brand message, 

along with the making promotional offers and language consistent. Too 

often, consumers are confused by disjointed channel offers. By moving 

towards a cross-channel marketing solution, leading retailers are able to 

reduce the clutter that customers must wade through when making a 

purchase decision. According to the June 2011 Multi-Channel Retail


Page 13 

Marketing report, 41% of Best-in-Class retailers have made developing 

consistent branding across channels their top strategic priority. The crosschannel 

solution will serve as the main hub for implementing a consistent 

approach to marketing communications objectives. 

A final marketing solution Leaders are using is a catalog management 

system. A catalog management system allows retailers to update product 

catalogs across channels with accurate product information, pricing, 

functionalities, related products, and product features. The increased use of 

digital channels makes this technology important for retailers, as all catalog 

information needs to be up to date and reflective of changing inventory. The 

seasonal nature of retail also plays a role in the need for these updates. 

Case in Point 

Take, for example, the case of a large general merchandise retailer based in 

North America. This retailer operates brick and mortar stores, an online 

commerce site, and call center locations. The main problem facing the 

retailer, however, was inconsistent assortments across channels. According 

to the Director of IT, “We had a multi-channel strategy in place, but we did 

not provide a consistent experience across these channels. We had an 

enormous number of SKU’s that were channel specific. While our loyal 

customer base remained intact, we were driving our fringe customers away 

by forcing them to shop in a specific channel.” 

To improve upon their omni-channel strategy, the retailer overhauled their 

strategic approach to their channel options. According to the Director, “the 

message came down from the top. Senior management fully backed our 

move to align the channels, specifically from a product availability and 

marketing standpoint.” This retailer revamped their inventory and fulfillment 

strategies to ensure product availability across channels. Additionally, the 

retailer made order fulfillment from separate channels a possibility, to 

alleviate the issues surrounding out-of-stocks. 

From a technology standpoint, the retailer centralized their product data, 

allowing stores and other channels to pull inventory for customer order 

fulfillment. They were also able to better manage their marketing efforts by 

not duplicating or sending disjointed offers across channels. According to 

the Director, “the new omni-channel approach has left us with a more 

consistent brand across channels, and has resulted in better order fulfillment 

rates. Additionally, we have experienced a 5 % increase in customer 

satisfaction by providing the same product offering across all channels.” 

Key Takeaways and Recommendations 

Channel integration processes continue to evolve as customers turn to 

emerging digital channels to meet their shopping requirements. The 

prospect of a lost sale is daunting, and consumers are seeking a seamless 

omni-channel experience. To alleviate these customer concerns, leading 

retailers are aligning the brand and sharing customer, product, order, 

financial, and operational data across channels. The rise of the digital channel 




Page 14 

is moving the web experience to new heights, with the advent of mobile 

technology that can be used in the store or on the go. An integrated 

approach to data sharing is a key component for omni-channel success, and 

Leaders are embracing it as they launch new products through new 

channels. 

For retailers re-thinking, re-launching, or just developing an omni-channel 

strategy, the following steps will spur performance improvements. 

Recommendations for Followers 

Measure customer satisfaction at every customer touch 

point. Currently, only 14% of Followers are measuring customer 

satisfaction across all customer touch points. Customer satisfaction 

is the driver of personalized relationships; as consumers move 

through the buying channels, Followers need to build on these 

relationships. To understand better how the customer perceives 

the brand, Followers need to develop customer satisfaction 

guidelines and inquiries for every channel. These inquiries include 

POS CSAT surveys, in-store intercepts, mystery shopping, social 

media monitoring, and call center campaigns. Once these initiatives 

have been put in place, Followers can get a better understanding of 

how they improve the customer experience, and begin to improve 

their customer satisfaction scores. 

Give consumers ownership of the channel experience. The 

customer expectation of a seamless experience across channels is a 

top omni-channel pressure for all retailers is. Currently, Followers 

are not providing this experience, as only 27% have the ability to 

purchase, exchange, and return a product through any channel, and 

only 24% can ship online orders from the store. The lack of 

guidelines for sales, exchange, and returns settlement creates a 

disjointed experience. Increased executive buy-in for an omnichannel 

strategy is the first step from a business process standpoint. 

Once senior leadership backs this process, the rest of the 

organization will follow. 

Collect and analyze customer data across all channels. 

Currently, only a little more than a third (36%) of Followers are 

collecting customer information across channels. Disparate data 

collection techniques, guidelines, and applications are creating a 

customer data roadblock. Followers need to incorporate customer 

data capture procedures for all channels to ensure that relevant 

data is collected. Once relevant data is collected, Followers can 

purge their customer databases of duplicate and irrelevant data, 

which will make the information at hand actionable. Cross-channel 

and cross-departmental collaboration is required to build out an 

omni-channel data collection strategy. 

Share up-to-date fulfillment, planning, and execution 

information across channels. Currently, less than a quarter 




Page 15 

(24%) of Followers are sharing fulfillment, planning, and execution 

information with all necessary stakeholders. Accurate inventory 

information is critical to retail operations, from store-level 

assortments and displays to enterprise-wide marketing and 

promotions campaigns. If this information is not up-to-date or 

readily available, disjointed offers and pricing strategies can exist. 

This information also ensures product availability is accurately 

broadcast through channels, enabling customer to receive orders 

on-time. Followers must develop a common merchandising strategy 

for all channels as part of their information sharing practices. 

Recommendations for Leaders 

Develop formal and standardized omni-channel training. 

While 57% of Leaders have executive buy-in for the omni-channel 

strategy, they are sorely lacking in training, as only 14% have a 

formal omni-channel training strategy in place. Formal training helps 

keep employees engaged and productive, while outlining the key 

tasks they need to perform to meet and exceed the retailer’s omnichannel 

goals. Training must include guidelines for all stages of the 

customer lifecycle – before, during, and after the sale. As Leaders 

are able to communicate what is expected from employees, how 

their success will be measured, and what they need to do to 

succeed, management can revamp the omni-channel strategy 

depending on feedback from key stakeholders across all 

departments and channels. This information will be crucial to the 

future growth of an omni-channel environment. 

Measure and track marketing “recency”, frequency, and 

monetary (RFM) metrics across channels. Currently, a mere 

29% of Leaders have established guidelines to measure these 

important metrics. This capability allows retailers to monitor the 

performance of marketing programs, and break down results by 

campaign or channel. It also helps justify marketing spend on specific 

customer segments, based on analysis of how much and how often 

certain customers buy. These metrics need to track across channels 

to allow retailers to prioritize the marketing appropriate channel 

mix. 

Include omni-channel loyalty programs into the overall 

omni-channel strategy. Currently, only 29% of Leaders have a 

fully integrated cross-channel customer loyalty application. 

Aberdeen data has shown that customer loyalty programs are 

channel-centric by nature. However, as consumers desire a 

consistent experience, loyalty components cannot lag behind. 

Developing a consistent loyalty program, where customers can 

register, check loyalty balances, redeem rewards, and access specials 

across all channels, must be a priority. According to the February 

2011 Next Generation Customer Loyalty report, retailers using a 

cross-channel loyalty platform have seen a 20% increase in customer 




Page 16 

retention rates (compared to 8% for all others) and 15% increase in 

customer re-activations rates (compared to 4% for all others). 

Channel integration remains vital to a successful omni-channel retail 

environment. Leaders are paving the way in their approach to a seamless 

shopping experience, and continue to evolve the way consumers interact 

and shop through their channel of choice. For more information on this or 

other research topics, please visit www.aberdeen.com. 

Customer-Centric Retailing 101: 

Customer Intelligence and 

Engagement Strategies; October 2011 

Mobile and Tablet Shopping 

Demystified: Adoption and the ROI 

Business Case; September 2011 

High Definition Digital Merchandising: 

Rise of the Revenue- and Customer- 

Centric Retailing Experience; July 

2011 

Related Research 

State of Multi-Channel Retail 

Marketing: A Paradigm Shift for 

Reaching New Customers; June 2011 

Next Generation Customer Loyalty: 

The Evolution of the Digital Customer; 

February 2011 

The Roadmap from Multi-Channel to 

Cross-Channel Retailing: The True 

ROI of Unified Customer Experience; 

November 2011 

Author: Chris Cunnane, Research Analyst, Retail, Hospitality, and Banking 

(chris.cunnane@aberdeen.com) 

For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. 

Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide 

organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why 

our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of 

the Technology 500. 

As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community of 

local, regional, national and international marketing executives. Combined, we help our customers leverage the power 

of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional 

information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call 

(800) 456-9748 or go to http://www.harte-hanks.com. 

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies 

provide for objective fact-based research and represent the best analysis available at the time of publication. Unless 

otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be 

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Aberdeen Group, Inc. (2011a)

Customer-Centric Retailing 101: Customer Intelligence and ... - Stores

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