Channel Credit - How Target Got It Right?
Assigning multi-channel credit is still a thorny subject inside of many retailers - who should get credit for the sale?
This is another topic that Target got right early on.
Listen to Target's CEO in November 2013: "There is no penalties, or there is no internal conflict at all as it relates to who is going to get that credit for the sale. We are double crediting everybody from an internal standpoint, and then we take it out at the enterprise level to make sure that it all washes through on a consolidated basis. "
This means that the stores get the same "credit" for sales (in terms of achievement) as online if they are at any point included in the online value chain - and vice versa. Then of course when they report to Wall Street, they remove the double-counting. Chris Gerardy says Target has “exactly the right approach. Reward all channels for their participation in the revenue and don’t create artificial competitive barriers to achieving the best experience.”
Marvin Harris say “customers expect to see one brand across sales channels. A retailer who fails to understand that is in deep trouble.” Sad to think many retailers still don't get this right today.
Heck, the financial engineers at HBC just split Saks into two: offline and online, and furthermore essentially established an affiliate relationship between the two. DeAnn Campbell thinks “Saks will suffer from making the decision to split. Online and offline feed each other, and multi-channel shoppers spend more and are more loyal in the long term. They have limited their ability to create an optimal customer experience, for in-store pickup, returns, service, delivery and product selection. But perhaps desperate times called for desperate measures.” Do you think such a transactional relationship between the same brand will lead to outstanding customer service? I sure don’t.
Matthew Holman shared how Old Navy handles this - “any online sale in the same region as a physical store gets attributed to the store as well. You just never know who walks into a store to try something first!” A great point.
Rahul Saraswat worked with Target in 2014 and says he “remember[s] these issues being brought up by their eCommerce buyers. There was a lot of concern at the store level because stores were central to the their omni-channel strategy but they feared that stores would not get the credit for those sales. Glad they landed on this strategy.” I’m also glad they landed on this strategy. It seems to be working.
