The Multichannel Trilogy

Retail, catalog and online synergy is absolutely essential in today’s market

ON A RECENT VISIT TO A NEW SHOPPING MALL, I was astonished to come across a Harry & David store. I get the Harry & David catalog and had no idea the company operated retail stores. But a closer look at one of its catalogs showed an extensive store listing, albeit in tiny print on the order form.

If it hadn’t been for the immense Harry & David logo, I probably would’ve walked right by the store. It looked nice, but not any more or less inviting than the many other shops in the mall. There was nothing distinctive to make anyone aware they were being offered another way to shop with an old friend. Maybe its main purpose, and I am betting on this, is to introduce new folks to Harry & David.

Even if it’s not perfectly executed, a move into a different area to increase sales is the way for a company to go. It has become more and more obvious that single-channel distribution means painfully slow growth at best. When I started teaching catalog courses it was easy to name decent-size companies that were freestanding and growing: Horchow, Lillian Vernon, L.L. Bean, Lands’ End. These days, with the exception of Cornerstone Brands, it’s hard to name a predominantly single-channel cataloger that’s expanding.

For non-retail catalogers, the sales growth that’s happening tends to come from the Internet, one part of what I call the multichannel trilogy (retail, catalog/telemarketing, online). An example is Hanover Direct. With only two parts of the trilogy it has flat or declining sales in its base catalog business, and growth only from the Web.

More often than not, without these three methods of reaching the consumer, a company is doomed to mediocrity. Some feel that having stores, a Web site and a catalog only causes cannibalization, spreading the sales around while creating additional costs of establishing and maintaining the other channels.

The reality is that if a firm doesn’t cannibalize its customers, its competition will. Consumers are getting used to having a choice about how they’ll purchase: from the store, when they feel like an outing or need something in particular; from the Net, also for that one special item; and from the catalog, for impulse buys.

Sure, sales could be increased by adding extra titles, and some companies, like Williams-Sonoma, have done this expertly. But many others