Power Retail chats to NetSuite’s Mark Troselj, VP of Sales APAC, about the challenges Aussie retailers are facing, and what they can do to combat these.
Taking a time out from the jam-packed NetSuite SuiteWorld schedule, Power Retail took Mark Troselj, VP of Sales APAC, aside for a chat about the local Aussie market and how retailers are stacking up against the challenges they’re facing in the omnichannel world.
What are the biggest challenges Australian omnichannel retailers are facing today?
A lot of them haven’t actually put the backend and frontend systems in place to transact with the customers. As online consumers, we expect something like you’d get from Apple, and anything below that can be frustrating.
In addition, we live in a world that has no borders so Australian companies are competing globally in a world that’s becoming commoditised with established players.
How can these challenges be overcome?
The first thing they need to be is self-aware of what they’re doing. They need to treat themselves as a consumer of their own product and look at how they believe they’re servicing their customers.
Looking at analyst reports, there are only a third of Australian retailers that are able to transact online – how do we transform our business? As an online retailer, you’re conducting commerce via the internet. If you haven’t got the ability to communicate effectively over the internet, then really, what business are you in?
We’re seeing a lot of retailers coming to NetSuite and saying the Australian economy isn’t doing well. The banks are lowering interest rates to spark business, but it gets to a point where they can’t pull that lever anymore.
We want to expand our business quickly and defend our own space from international retailers. Consumers would prefer to buy from an Australian retailer, but they’re not going to pay more for a poorer experience.
What are the must-haves for delivering a great omnichannel experience?
You have to have the ability to communicate with your customer consistently across multiple mediums, and it has to be seamless. You need to be able to transact quickly and get information in real time. It has to be efficient, effective, fast and offer a good user experience, with the ability for a consumer to transact within a few clicks.
There are no longer real barriers to achieving this – the hardest thing to do is make the decision. And if you don’t, there’s already a competitor coming at you that you can’t see.
The companies that are doing it well are those that start out using cloud-based systems, for example, Stylerunner – they’re the ones growing quickly.
How can Aussies compete against the increasing threat of internationals when it comes to the last mile?
That is the toughest part of running a business. You have to have the ability to provide and transact. NetSuite, as an example, is designed as a transaction engine to facilitate transactions so you can focus on other areas of the business, such as marketing.
The critical part for online retailers is that NetSuite is acquiring companies and building systems so they don’t have to. They don’t have to reinvent anything as the systems are already established and work. They just need to implement it for their business. So they can leverage the might of NetSuite, and do it quickly.
What do you see as the main changes in consumer needs today?
The growth of online in Australia alone, with transactions doubling over the next two to three years. Also, a lot of retailers now allow customers to try products at home before they buy – that’s because they run a business model that allows for this – no bricks-and-mortar, infrastructure, staff etc. It won’t be long before the majority of transactions will happen online.
What is NetSuite doing to address these needs?
We’re helping retailers operate more efficiently with one backend to support the frontend. For example, if you go into a Williams-Sonoma store, it’s quite small yet the product line is as big as Ikea. They do this by only having one of each of the products in-store so consumers can see the variation. And if a product isn’t available to buy in-store, they’ll ship it to the customer’s home immediately. By running this way, the cost of the footprint is drastically minimised, plus they offer the ability for a customer to engage directly with someone in-store, which is a huge benefit.
For a retailer like Williams-Sonoma, with multiple brands selling to a similar target audience, its able to operate with a single backend, with warehousing, stock and replenishment all translating online. And it’s very cost effective.
How can Australian retailers be better equipped to deliver a unified message across channels and devices?
Having a great product is only one step. You need to allow customers to find you. You don’t get a lot of chances to grow exponentially, and if the demand far outstrips expectations and you have the wrong backend system in place, you’ll fail.
You need the right business software. Some retailers think they’re too small to consider investing in this, but now is exactly the time to invest in something scalable.
What are the key investment priorities for the retail market?
Online. The online experience and revenue generated through it is going to double every two to three years. You’ve got to get the online experience right.
What appear to be the hot topics retailers are buzzing about at the conference?
There are absolutely three hot topics. The first is global expansion in terms of how retailers can trade in a different currency. The second is the ability to have real-time visibility of stock and distribution. And finally, it’s how retailers can target customers in an effective and timely way to get them to buy more things.
What have you gotten out of the conference so far?
This is my fifth SuiteWorld, but some of the announcements today had me on the edge of my seat and shows me how far NetSuite has come. Particularly the developments with Microsoft from being a competitor to becoming a partner, and to see the CEO come on screen was amazing.
Also, seeing some of the customer wins I’ve had visibility of and hearing from the MDs of those companies on stage talking to the audience, and getting a sense of how excited they are about what they’ve achieved and what’s next.
We’ve transformed our business with a dedicated retail section in ANZ, and the barriers to entry are so different. So a clear message to retailers is to at least have a look. We’ve yet to have someone talk to us and say it’s a waste of time.
Power Retail is attending the SuiteWorld Conference in San Jose this week as a guest of NetSuite.