Posts Tagged ‘Ecommerce’

Omnichannel Differences in the US & Europe

15 years ago, we embarked on the first “multichannel” retailing study for the National Retail Federation, during the midst of the Dotcom Bubble era. Little did we know how long it would take before retailers truly committed to the long journey we now call omnichannel or cross channel retail strategies. Today the ubiquity of “omnichannel” is enough that the mere mention draws a grimace or a roll of the eyes from industry insiders, similar to other industry buzzwords like “big data” and “customer centricity”. 

Despite this growing cynicism, the retail industry marches forward at a steady pace of omnichannel development with each passing season.   We’re still excited to see new developments emerge that will change how retailers win the hearts and wallets of shoppers.  Macy’s announcement of their latest wave of omnichannel capabilities sets the bar higher:  ApplePay in-store, same day delivery in select markets, national rollout of in-store pick up, enhanced mobile apps and pilot tests of digital tools in-store (associate and consumer-facing).  In the same week, Staples similarly announced a range of new cross channel capabilities to position themselves as innovative leaders, and Whole Foods launched their own version of in-store pick up.

But how does all of this US omnichannel development stack up against European retailers’ drive towards omnichannel innovation?

In recent years, among our Ebeltoft Group of retail consultancies, we have benchmarked global cross channel capabilities and a vast wave of retail innovation driven by digitally-infused retail concepts.  The global trend is clear, but some findings such as the more advanced omnichannel among UK specialty apparel retailers (vs. US retailers) were a tad surprising.  Some of the most innovative new concepts, born of the digital world and transforming into physical store retailers (Emmas Enkel or My Meusli) are award-winning German retailers.  And while many leading European retailers started later than their US counterparts, their commitment to omnichannel has been impressive.

This week, I will speak at an Amsterdam retail event on omnichannel strategies and will have the opportunity interact first hand with the retailers who are “raising the omnichannel bar” in their markets. The competitive intensity within mature, slow growth retail markets of Western Europe are macro drivers pushing retailers to find new sources of advantage, and we’re quickly seeing many retailers embrace integrated digital strategies (aka omnichannel) as their strategic priority.  In many ways, we draw analogies to our work in international ecommerce, where European retailers more naturally plan for growth outside of their domestic market, and therefore have different attitudes among senior decision makers to take these risks.

We will report back from Europe, and the upcoming conference in Seattle where we expect to hear even more of the latest and greatest omnichannel innovation, to share our impressions of these attitudes to embrace digital retail in our next post.

Omnichannel Challenges – Keeping Score In A Connected Environment

Multichannel retailers are responding to the connected consumer at break neck speed. The shift in their business model demands that they work horizontally across the organization, breaking down silo’s, and developing new collaborative processes. Yet in many cases the organization of human capital, budgeting and planning, and key metrics have not aligned with their new Omnichannel  strategy.

We ask our clients to answer “Big Questions” to help illustrate the challenges that they will face in their shift to an omnichannel future.

Is it the expectation that the Ecommerce team will support “all things digital” within the business?

In some cases we see brand marketing taking on the role of social marketing and digital display for awareness building. But in most cases the Ecommerce team is still responsible to develop content, support brand campaigns on the site, develop the mobile strategy, and to help educate the Senior Team on how to leverage the digital infrastructure critical to the omnichannel future.  In many cases, they are asked to manage vendor selection, the digital roadmap and more – in addition to driving ecommerce revenue growth. Yet, when it is time to resource the “all things digital” team, the resources are based on Ecommerce revenues.  We encourage our clients to measure the influence of digital efforts on the broader business to properly resource for the Omnichannel customer experience.

In response to our suggestion to measure online influence we often hear “ We can’t always see what happens at the store and we need to understand how much of the business is incremental ”.  Our overwhelming recommendation will  save you time and effort. Don’t chase the incremental statistic – it’s difficult to prove and may only give your detractors the opportunity to poke holes in your analysis. Instead, determine your key metrics (e.g. customers who buy in multiple channels, cross channel customer satisfaction ratings, number of hits on the store locator or who redeem coupon codes at the store, incremental sales from “pick up in store” orders). Track what you can to develop a benchmark and look for growth.  Report progress to the broad management team and reward positive influencers.  This will help you align disparate teams to work together better.

When the time comes to add resources pay close attention to the skillsets that are needed to drive those customers across channels.  Sometimes it is as simple as adding more copy and creative talent. Sometimes it means reducing the administrative workload of Senior resources by bringing in support personnel.  Other times it is developing a core competency in an area you have been outsourcing and the new positions will require acquiring high level specialized skill sets. With the changing role of the digital team, make sure to support growth by getting the necessary resources to deliver the customer experience you envision.

Are you willing to track and reward store associates for online revenue increases in their store’s trading area?

We are asking store associates to become digital evangelists but in many cases we don’t reward them for contributing to the increase in online sales in their store’s trading areas. Or on adding incremental sales for in store pick up orders.  In many cases we ask them to learn more about an extended online offering but don’t give them incentive or “time on the clock” to do so. The Container Store is an omnichannel best practice leader that allows store staff to train and learn about digital advancements “on the clock”, and this shows in their excellent store execution.  Our research has confirmed that tracking and sharing online revenue within the store’s trading areas has been a game changer for most retailers.

Incentivize the behaviors you want to build upon.

Until retailers are at a point where we can look at sales in a holistic manner and reward people across channels for behaviors we want to reinforce, we will struggle with the omnichannel customer experience.  Understanding that organizations will evolve, measurement tools will improve and new processes will replace old ones suggests our success metrics need to evolve too.  Develop a plan to measure, report, and reward your team to support a digitally connected environment and you will lessen the friction that comes with change management. and the Omnichannel Obsessed

This year’s Annual Conference was held in our own hometown of Chicago. We were delighted to participate and network with a “Who’s Who” collection of Ecommerce Executives with abounding expertise. The conference confirmed that chasing the Omnichannel customer experience is high on the list of priorities for most multichannel retailers in attendance. As a overview of what we learned we’ll stick to the highlights and a bit of generalization.

Our awards for the most discussed challenges from the Executives we spoke with were:

1) Prioritization of omnichannel efforts. Senior management and the board are  pushing hard for rapid innovation. In many cases they don’t understand some of the underlying challenges, costs, or timeline  (e.g. process change, infrastructure inefficiencies, visibility to data at a customer touch points, skill sets and training, etc) that are necessary to execute Omnichannel capabilities.

2)  The role of the ecommerce team is changing. They are being called upon to either be “all things digital” within the organization. Tapped to handle digital innovation, brand initiatives, develop the mobility strategy and grow the ecommerce business all at the same time. In these cases, the team is concerned with resources and budget to support efforts coming from multiple areas of the business that don’t necessarily impact their P&L but are now their responsibility. Additionally the Ecommerce team is being asked to be aware of the challenges that the store team is faced with Omnichannel programs.

Alternatively, the business has restructured and Ecommerce traffic driving efforts have fallen under the “digital marketing” team, which is no longer inside of the Ecommerce team. The approaching holiday season has them on high alert.  Their increasing resource needs and a necessity for marketing flexibility to meet revenue goals, without these direct resources, has them concerned.

3) Organization Design and talent acquisition remain a key hurdles in accomplishing the future vision. Fundamental questions are being posed as to “Where should Ecommerce report?”, “Who owns the marketing budget and how should it be spent?”, “How should we incentivize the store team to assure that they are digitally savvy and omnichannel advocates?”, “Who makes pricing and promotional cadence decisions and what are the guardrails associated with them?” .

Our favorite observation: With all the change and increased performance pressure Omnichannel has stirred up, Ecommerce executives appear more open to sharing insights and learning from one another again. We had several requests to connect retailers who were non competitive but focused on exploring the same issues.

Our roundtable topic “The Top 3 Myths of Omnichannel Retail”  was well attending and enlisted a robust discussion about  Omnichannel challenges and mobile efforts. Everyone was excited by Target’s Cartwheel app and it’s in store couponing using geo-fencing capability.  We handed out our Omnichannel Self Assessment Tool. We hope it helps the team’s internal discussions regarding the Omnichannel vision and to exemplify the complexity of Omnichannel execution.

We are big fans of the content brought to the industry via and this conference confirmed their dedication to topical and timely quality content. Bravo!