The potential for multiple channels has meant that retailers have had to rethink their customer service strategies. Joanna Perry discovers how the right technology can help

People who buy online ask a lot of questions. They also don’t differentiate between channels in the same way as retailers still might like to.

In the run-up to Christmas, retailers find that calls, e-mails and even in-store enquiries rocket and customers expect staff in all channels to know everything.

However, a survey of online businesses by web software company Transversal has shown that some retailers have a long way to go to meet this demand.

Most retailers were unable to answer all 10 key customer service questions online. On average, it took retailers 46 hours to respond to e-mail enquiries, with fashion retailers taking an average of almost five days.

In addition, both grocery and electronics retailers respond correctly to only 55 per cent of e-mail enquires.

So what are retailers doing to correct this?

Littlewoods chief operating officer Keith Basnett sums up the task facing retailers. “The challenge is to create a consistent, joined-up experience for customers, allowing them to transact using the channel of their choice, while maintaining a single view of the customer,” he says.

Littlewoods has created functionality on its web site for mail order customers to track their order online and arrange returns. During 2008, it will also run a programme to harmonise and integrate its business processes across all channels, to deliver a “next-generation” of customer service and support its aim of having 50 per cent of sales coming from its web site by the end of that year, according to Basnett.

The retailer will invest in e-mail, SMS and intelligent voice recognition technology to allow customers to communicate in the way that they prefer.

E-mail overload

Hughes Direct, the online arm of electricals retailer Hughes Electrical, has turned to an online self-service option as a way of tackling the rise in customer queries that comes with selling online.

Hughes Direct general manager Simon Cox explains that over the past three to four peak Christmas periods, e-mail volumes have gone through the roof. It was receiving 2,500 e-mail enquiries a day – up from 150 on a normal day – and Cox estimates that 60 per cent of these were repeat queries.

In September, Hughes Direct implemented an online question and answer tool from Transversal to answer customers’ questions at a faster rate. Using this system, it has created a bank of answers to more than 500 different questions. Customer service staff can still reply to other queries personally and add this content to the system if they think it will be relevant to others.

The result has been a 40 per cent reduction in e-mail queries and a 10 per cent reduction in calls since the system went live.

Cox explains that the decision to implement the system was made partly because the company had worked out the cost of dealing with correspondence over the past year. Another reason was to create consistency in the brand across the web site and in stores.

Consistency has also been a key issue for Oddbins, as part of its multichannel strategy. Oddbins operations director Bob Smyllie explains: “When we first developed our online shopping channel, we were looking to recreate our core brand values and ensure that our customers received the same quality of service across channels.”

Oddbins uses the Maginus retail system as a conduit between its central merchandise system that manages its stores and its web site. This ties the on- and offline worlds for business customers who have a store-based Oddbins account. Smyllie says: “All transactional information, irrespective of channel, is visible to the business. We view a customer as a single entity, so their spending activity or preferences in either channel are known to us.”

Smyllie says that the Maginus system has enabled Oddbins to provide comprehensive multichannel customer service, because that is what the system was built for.

The architecture of the system also means that information on promotions and discounts are consistent across channels. The information is set up once and can then be used by both store and web systems.

Betterware is another retailer that is upping its multichannel game. Betterware head of e-commerce and customer services James Gurd joined the company 14 months ago. At the time, the retailer had a solid transactional web site, but the site needed to be integrated more closely with the offline channel, with a stronger focus on a multichannel customer service.

Betterware launched a refreshed, integrated web site in July. The site, Betterware’s call centre and the traditional local distributor model provide three channels for customers to purchase products.

Gurd says: “We have a self-employed workforce, so whatever we do online must be married back to the overall objectives of the business to ensure that all channels are complementary and work well together.” As a result, Betterware customers see a unified offer, where they can buy online or over the phone and then return goods via a distributor or vice versa.

The call centre will service all customers with product enquiries, irrespective of their preferred purchase channel. Crucially, call centre staff are given access to all the information that Betterware stores about its customers.

The channels are not set up to compete, but rather to offer the most complete customer service possible. Gurd says: “Existing customers are more likely to use the call centre, because they are not so used to online shopping. We also get a lot of e-mails from customers wanting to know more about how to use the web site and our customer services team is well trained to respond promptly and efficiently.”

Betterware’s distributors are also offered incentives to provide a united customer service front, even if people choose to shop online rather than order via them. Gurd explains: “We pay a commission on online sales that originate in the distributor’s postcode area.” This is important, because 97 per cent of the company’s sales are still offline. Betterware has a committed force of 5,000 local distributors that it must keep onside.

Betterware is also improving its customer service with the use of technology. One step it has taken is to introduce a cash payment service via its call centre. This service, provided by Go&pay, enables customers to ring up and order products, receive a unique, barcoded invoice by e-mail or post and then pay by cash at a local Payzone terminal. The goods are dispatched as soon as payment is received. This service provides added value to customers who are uncertain about buying online or who have no local sales agent and also caters for those without a debit or credit card. Betterware intends to extend this service to its web site next year.

Gurd says that any further investment in technology will be tempered by the speed at which the company’s traditional customer base is willing to embrace change. “Betterware has outlined a long-term programme of developments, but we have to make sure we don’t alienate our existing customers. Things like improved guided search, customer reviews and feedback have been proven to produce a sales uplift, but I think independent feedback on products would be first,” says Gurd.

In the longer term, Gurd observes that interactive web self-service, where a customer service agent can conduct an instant messaging conversation with a customer, could reduce the need for customers to call or e-mail. Other technologies he has considered include a question and answer tool that allows customers to type in keywords to refine relevant answers to their questions.

Technology is even playing a part in improving customer service around the delivery process. For instance, Ikea’s distribution business has installed a track-and-trace and electronic proof-of-delivery system to its 60 delivery lorries, in order to improve customer service across its multiple channels.

The system was provided by Zetes and transfers information between Ikea’s home delivery system and wireless computers in each lorry. In-cab printers provide customers with a receipt for delivered items.

Even before Ikea launched sales online, it was fulfilling store-based sales of items such as sofas and kitchens straight from its main warehouse. The introduction of online sales was going to make customer service even more crucial.

Ikea deputy customer distribution manager Don Marshall says that one of the main benefits of the system is the quick response that is possible if something goes wrong with a delivery. He explains that customers will receive a call from Ikea within hours if there is a problem with delivery. Data is transmitted immediately from the lorry system using a mobile phone network, so it is technically possible to contact the customer within minutes.

Storing proof-of-delivery records electronically means it is also much easier for customer service staff to look back and work out what has gone wrong. Marshall adds: “The time spent on the admin might have been two days before, but now we can see the problem immediately.”

All this is critical, because Ikea has doubled its volume of direct deliveries since launching its online business and Marshall predicts that this will double again once Ikea launches online sales to all areas.

Basnett says that, while online continues to register growth as a sales channel, retailers’ other channels will remain equally as important when it comes to customer service. He concludes: “We see that customers are choosing to browse and order online and that for more complex queries prefer to speak to an adviser. As a result, we are predicting that the e-commerce channel will be the main channel for order-processing, with contact centres becoming a predominantly service-driven environment, but at the same time generating additional sales through excellent service.”

With service becoming as important as price to online customers, skimping on technology to provide good customer service must be considered a myopic strategy.