The pure-play Internet retailer not too long ago was projected to annihilate traditional retailing, but now, it has become a team player, one of several contact channels available between merchant and customer. The lesson is that there is only one customer, who may or may not be a multi-channel shopper. And while the opportunities for multi-channel retailers are endless and exciting, a host of nightmarish questions must be answered for retailers to prosper in this new environment.

For instance:
* Do you maintain disparate data silos, organised by channel, that make it impossible to craft a clear view of the total customer relationship?
* Can you go beyond merely measuring customer spending by channel, and track the impact of marketing campaigns across multiple channels by measuring customer value and ROI?
* Are some of your best customers invisible to your database if they choose to pay with cash or a bank credit card?
* Are you creating a trusting relationship with your customers, and in the process initiating a dialogue that offers insight more valuable than any transactional data set?

Most retailers will struggle with answers to one or more of these questions. One way a multi-channel retailer can bridge the gap in this new environment is through a well-designed and executed loyalty marketing programme. Such a programme can go a long way toward identifying the best customers, regardless of channel, developing a stronger customer database and encouraging them to spend more in any or all channels. Right now, many retailers find it difficult to link a customer's actions across multiple channels. In the US, some retailers can identify a good customer when she logs on the Web site or makes a catalogue purchase, but they often have no way of knowing when that same shopper enters a physical store.
The blend of recognition and rewards offered through a loyalty programme can encourage customers to ask to be identified. Once they have joined, an identification number allows all customers to be recognised, regardless of their preferred method of payment. Such programmes encourage cross-channel shopping with rewards that can accrue and be redeemed both on and offline. When customers opt in to a permission-based loyalty programme, they are more willing to share information as well, enabling retailers to create a dialogue with customers. That way, the retailer can learn a lot more than the bits and pieces information available from transactional data. When programmes build trust and offer value, retailers can overcome even the hurdles presented by online customers giving false information in the anonymity of cyberspace. But it takes some work; first, retailers must break the mindset that has forced their retail channel strategy into separate operations for physical stores, online retailing and catalogue operations. Perhaps Indiatimes.com and Fabmart should also start planning in this direction.

Early adapters of multi-channel retailing have learned some important lessons , such as introducing new channels to customers just for the sake of technology doesn't work; the “cool” factor will not carry the day. The first priority must be understanding the customer and determining his preferences for browsing, purchasing and customer service. To develop a loyalty programme that builds bridges between retail channels and expands knowledge about customers to all channels, retailers must first analyse what they expect to accomplish.

*Define measurable objectives: Is the aim to encourage cross-selling between channels or increase profitability in particular customer segments? What objectives can a loyalty programme help with, and which call for another approach?
* Define the desired customer behaviour: Is the focus to increase purchase frequency or average sale amount? Or is the goal to shift sales volume from one channel to another?

* Profile current customer behaviour: Look at current customers and build a channel strategy around them. For example, it would be foolish for a retailer to spend money developing a Website if its customer base has limited computer access.

Clearly, there is no one, right way to market through any one channel, but there is a right way to market to customers across several channels, and a loyalty marketing programme can help. A successful programme assumes that all channels are included in the customer relationship that measurable objectives have been established, and that promises are kept. With this foundation in place, a programme can boast the following characteristics:

1. Visibility: A loyalty programme must be highly visible regardless of the channel. A Web site can show special offers for programme members, a catalogue can feature the programme prominently and shoppers in the store should be asked if they'd like to join. Cross-promotional materials should be present and easily obtainable.

2. Simplicity: To succeed, a loyalty programme must be easy to use in all channels. Minimise the fine print; the more the customers have to figure out, the less they like the programme.

3. Value: The balance of reward and recognition must establish value in the customer's mind and motivate incremental purchases. Programme rewards should be credited regardless of where the customer prefers to shop. And while the price of merchandise should be consistent across all channels, don't be afraid to offer incentives to encourage customers to try a new shopping experience.

4. Trust: Keep the promises made by the loyalty programme. If the promise is for a personalised, highly valued service, don't bombard program participants with meaningless offers that obviously are available to everyone.

Recent studies indicate that customers who shop more than one of a retailer's channels - perhaps looking online and buying in the store or reading the catalogue/leaflet and buying online-spend more money with that retailer than single-channel shoppers.

The best way to coordinate marketing objectives across channels is to build a knowledge base of customer behaviours and preferences. Retailers cannot afford to let legacy systems interfere with building this knowledge base. A well-conceived and executed loyalty programme can be the key to turning invisible shoppers into hand-raising volunteers and profitable customers.