2012 was the year multichannel work started in earnest for many retailers. Evan Schuman charts its progress and discusses what’s next.

In 2013, everyone will be after the same thing - a business that is merged completely across the channels, whether that is referred to as multichannel, omnichannel or cross-channel. Ideally, and once all the work is done, retailers won’t have to care whether the transaction happens in-store, via mobile, through the website, using a catalogue or on the phone. From the shopper’s perspective, it’s all about the merchant making it easy to buy, whether you’re at home, on a train, walking down the street or in a mall.

That’s the theory. But the journey to get to this ideal state - a route many of the largest global chains started seriously taking in 2012 - is littered with the wreckage typically found when chains move from demo to deployment.

Best Buy, for example, has been one of the more thoughtful chains on pushing multichannel retail. But when it suffered a 17-hour site outage on its website in March this year, it discovered the downside of seamless omnichannel retailing and the resultant interdependence between the channels.

The problems occurred while it was working on updates to its systems, and Best Buy was forced to post the bad news on its website. It said at the time: “While the updates are occurring, customers will be unable to search or browse products, place orders or check order status on BestBuy.com, m.bestbuy.com (mobile or tablet), BestBuy.com/espanol and store kiosks.” Not only this, but it became impossible to check on an order status for a few hours. It said: “Shoppers will not receive emails regarding orders while the updates are in progress.” Making online purchases was not possible for store employees, call centre agents and online support representatives.

Stephen Baker, an analyst with the NPD Group, says few retailers have given much thought to the downsides of embracing merged channel retail. “As you more closely integrate web systems and the store systems, the inevitable web blowout is going to have more implications,” Baker says.

The same kind of problems hit many chains during Hurricane Sandy’s assault on the eastern United States, when they discovered that those smoothly integrated channels caused some stores to become less operational because they had become so dependent on online and mobile access. When web and mobile networks go down, stores are increasingly affected.

New ways of thinking

The world’s largest retailer, Walmart, has been especially aggressive about thinking of new ways to do things. More than almost any other chain, Walmart’s focus has been not merely breaking the barriers between various channels, but using the data generated by one channel to fuel sales in another.

It also understands the idea of channel layering, which goes beyond the idea of linking separate channels together and deals with multiple channels simultaneously. For instance, a shopper in a Walmart aisle can use a smartphone to look up price comparisons and reviews while also using the phone to talk with a customer service associate at a call centre. And there is a chance this shopper is doing all of this while standing in front of a kiosk that is showing the live Walmart website.

In March the retail giant bought a Facebook app called Social Calendar, which most saw as a way to send birthday notes to shoppers. In reality, it creates the potential for Walmart shoppers to not only be reminded of their Aunt Bertha’s birthday but have gift ideas based on Aunt Bertha’s social media activity together with her purchase history. Walmart.com will send these gifts to its customers - or to Aunt Bertha directly - with one-click delivery available on the mobile.

That service is a potentially great one. The magic comes when those millions of gift-giving events - birthdays, anniversaries, weddings, graduations, baby showers - are merged with Walmart’s new social media files and its not-so-new customer purchase histories. If Walmart can match Aunt Bertha with Bertha Smith of Altoona, who is a frequent shopper at the Plank Road Walmart, the results could be impressive.

This year Walmart also became the first chain to offer online shoppers the ability to pay with cash in-store. The idea is visitors could process everything online but then would have two days to get to a store to pay for the purchase, presumably with cash. It turned out, though, that some 40% of the shoppers who participated ended up not using cash at all.

At one level, this programme was intended to reduce shopping cart abandonment from customers who are either unbanked or who simply are still afraid to enter payment card data online. Not that giving the card to a sales assistant in store - who will swipe it into a point-of-sale system where it will end up in the same database - is any safer than online entry. But let’s not confuse reality with shopper perception. However, at a deeper level, this is potentially a good driver of footfall. It is a way to get online customers to walk inside a store.

Frustratingly, this programme - which was copied by Toys R Us a few months later - is the antithesis of merged channel and is the worst of both worlds. Merged channel is where shoppers are encouraged to shop in whatever way is easiest and most efficient for their situation and the purchase’s particulars. The true value of this type of programme is that it gives chains the chance to showcase a good store experience, and perhaps to cross sell other products.

But the way these initiatives are being deployed is disruptive. The shopper is already online and, at payment, the process is disrupted because the shopper is sent to the store. Once in the store and having paid, the action is disrupted a second time, when no product is received and the shopper has to wait days for home delivery.

Walmart did a better job with a clever price comparison trial. It started a trial in three US cities where shoppers can email photos of competitors’ receipts, inviting Walmart to do the price comparison. In this trial, called the ‘receipt comparison tool’, the idea is to hopefully showcase lower prices to consumers without them having to walk into a Walmart store.

The trial, which started in mid-August, receives emails from prospective customers who want to compare prices, and then links those shoppers to the products they purchased in Walmart’s database. Overall, the process is quite complex, because Walmart does two fairly common things for its in-store pricing; it localises pricing, so one store in one neighbourhood could have different pricing to a store in another area, and it updates pricing throughout the day based on supply and demand for particular products.

This means quite a bit has to happen with that receipt. First, the retailer the customer bought the goods from must be identified and matched against Walmart’s confidential list of retailers that it will compare against.

Second, the items must all be identified, which is not necessarily easy given the huge number of rather cryptic codes many retailers, especially smaller ones, use.

Next, the system must identify the nearest Walmart to the shopper’s location, which is relatively easy. It must then determine what the pricing was for that item at that specific store at that specific date and time. That’s one of the reasons for a seven-day limit. This database is huge enough as is, let alone if it needed to record every item’s price for every store for every hour going back months. The trial shows just how complex seemingly simple multichannel initiatives can be - but after a year of hard work, retailers are starting to produce some interesting multichannel projects.