Posts Tagged ‘Organization Design’
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.
Shop.org and the Omnichannel Obsessed
This year’s Shop.org 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 Shop.org and this conference confirmed their dedication to topical and timely quality content. Bravo!
Myth Busting –
The Top 3 Omni Channel (Cross Channel) Myths
For our inaugural blog post (yes, we know we’re late!), we thought we would do some myth busting.
Myth #1 – The customer experience must be the same across all sales channels.
Defining the customer experience within an Omnichannel /Cross Channel strategy is one of the most difficult jobs of any retailer. Many retailers we work with find it difficult to describe what they want their customer experience to be. In many cases, dependent upon who we ask within the management team, we will get differing answers. The most common refrain that we hear is “We want our customer experience to be the same across channels”. This is when you will find us asking what we consider foundational questions:
- Are your customers the same in all channels or are they different?
- Do you have opportunities online to enhance areas of your business that may not be possible in the store? (e.g. you product offering, enhancing customer loyalty, or acquiring new customers, etc.)
- Are you considering channel differences (e.g. competition, and cadence) that you may be able to take advantage of?
We counsel retailers that the brand construct should be consistent across channels but doing the work to understand how to leverage the channel differences will result in happier customers and typically better financial performance.
Myth #2 – Omnichannel Retailing is a competitive advantage
There was a time in the not too distant past when Cross Channel strategies could only be delivered by retailers with scale and deep pockets. By default, those retailers who embarked on early Cross Channel strategies had to have the means to invest and the patience of their board for the time to realize that investment. It was a select group willing to take on big risk as Cross Channel strategies were unproven. These early and select pioneers envisioned big competitive advantages with their strategies. They were able to provide their consumers with a value proposition based on convenience and service as they shopped across the available channels. Today, consumers are much more demanding and their expectations include Cross Channel capabilities. Retailers of all sizes have risen to the challenge of considering how their channels can work together better to meet those expectations. We are seeing exciting advances across all segments of the market.
But, Cross Channel strategies are relatively unproven and represent a great deal of internal change to execute. We find:
- Advanced Cross Channel capabilities cannot substitute for good retailing in each channel independently, pure and simple.
- A good ecommerce customer experience is necessary to enable Cross Channel retailing. You cannot leap frog or short cut here.
- Understanding what Cross Channel capabilities will enable a robust customer experience for your business will help differentiate you from your competition. Selectivity and executional excellence are the keys to differentiation.
Myth #3 – The Omni Channel experience is all about technology and operations.
Omnichannel strategies have changed the role of the IT lead inside of retailers. Smart retailers have recognized that these technical visionaries are the gatekeepers to a smooth transition between channels. Their roles have been elevated to strategic thinkers and they have claimed their place at the Senior Leadership table if they were not there before. But, a leading technologist within a Fortune 500 company from our recent paper for the NRF “Organizational Structure for the Future of Retail: The Digital Effect” said “I can build platforms faster than the culture can absorb the change.”
Omnichannel Retail is a sea change in the way organizations work together, plan together, and service the customer. Without the ability to describe the customer facing experience and understanding how the work will get done to achieve Cross Channel goals, the development of technology and operations meant to support the customer experience will be costly and likely flounder.
We are watching as savvy retailers work closely with their IT teams to create prioritization and flexibility in their roadmap priorities. They consider the speed of internal adoption, competitive market conditions, and customer driven insights to shape their vision for the future and guide their development priorities.