Who would have thought the e-commerce manager, I.T manager, and retail operations leader would be the key team working closely together to create the cross channel retailer? Haven’t times changed that such a triumvirate of skills sets operate in unison to build a retail organisation’s cross channel capability. This is quite a long way from the good old days when sales were made by retail ops delivering the promise created by the marketing team and recorded by the I.T manager. Forgive me
for being slightly perplexed by the manner in which some of our retailers are facing the challenge and opportunity that is building a truly cross channel retail business.
Recent retail figures cite growth will come from online sales as the dominant channel, however potentially the most risk to brand equity and margin enhancement will come from an online channel strategy only.
I am convinced of the role of online in a cross channel retail strategy, so please don’t read into this that I am a naysayer when it comes to online per say, far from it, however all our RDG Insights research tells us that average spend per customer is four times higher in a cross channel retail business, and there are many examples to share.
Let’s go back to our internal cross channel team charged with building and delivering the new cross channel business model. Often the I.T business case for the hardware and operating platform, necessary to record ‘one view of the customer’ might not reach payback until year three and beyond.
Often well in excess of the internal rate of return targets and in some cases the predicted tenure of the CEO. So the I.T. manager needs to understand the potential longevity of the systems and their rate of return.
So what does that leave the e-commerce leader with? Creative website designs? social media play – that isn’t integrated with the other channels and trying hard in the following areas to build a customer driven digital connection and purchase environment?
M-commerce is expected to grow 66 per cent per year each of the next five years and developments such as wearable technology and NFC are expected to increase in popularity and thereby cement the key role of the smartphone in the process. The e-commerce leader in the business needs to understand these changes and be one step ahead of the competitor at implementing relevant solutions in this space.
More than four billion hours of video are watched on YouTube…each month so the e-commerce leader needs to become more involved with that channel. While websites, apps, emails, videos and every other piece of online content needs to have a clear purpose and value to the customer. While this involves design and technological input from e-commerce and I.T, the input of the retail ops team to convert form to function (i.e. make sales) from this endeavour is critical.
Whether you’re talking about social media, advertising, design, or development it always comes back to profit and this won’t happen without the focus of the I.T manager to support and the retail ops team to convert.
Meanwhile the ops leader is wrestling with a myriad of factors to implementing a cross channel retail strategy. They know the store is the jewel in the crown and that on average 90 per cent of their sales come from the store environment however other channels are clearly important to driving people in store and to creating a strong brand image.
• What is the best product range to put online?
• What is the best pricing strategy?
• How will they deliver integrated channel value add such as click and collect”?
• What reporting do they need their I.T. team member to implement?
• How will inventory visibility be maximised across the various channels?
• How will they motivate their store managers to promote their online retailing offer?
As Paula Rosenblum at RSR succinctly puts it:
“In fact, retailers with annual revenue between $50 million and $1 billion are most likely to report their cross-channel customers are more profitable than single channel customers. Retailers of this size depend far more on customer loyalty and strong, curated assortments than their larger competitors. Ironically, the smallest retailers, those with annual revenue less than $50 million, are most likely to rely on digital channels for product education. In other words, cruising the web for product information doesn’t necessarily lead to a buy elsewhere.
“Leverage every channel you have at your disposal. Make sure your store employees can support the buying process, not hinder it. Be sure you create a consistent customer experience across every channel you sell through. Keep your pricing consistent. Put a technology infrastructure in place that will support you as the number of information and selling channels continue to proliferate.”
And guess which team in your business will make that happen?
Happy ‘fit’ retailing
Tomorrow morning the Retail Doctor Group are holding a complimentary webinar on the topic of cross channel retailing, featuring international guest, Jim Okamura. Details and registration at www.retaildoctor.com.au