Blending Once Separate Silos: Bricks and Mortar Meets Online

By Stephen Duncan | 13 Aug 2013

One of the major challenges still facing retailers is how to successfully balance and complement online and offline channels from being separate silos, writes Stephen Duncan.

Since the start of the new millennium, retailers have had to implement significant changes to their business operations to keep on pace with the transforming industry.

Once, shifting services to the internet domain was a potential consideration, yet now it’s a vital necessity for retailers to keep afloat and remain competitive. Business managers are now faced with the challenge of synergising their online and physical stores into a core ecosystem, with aligned and overlapping processes, systems and service offerings.

This article seeks to unpick the current climate of the online domain for retailers, draw on key challenges facing the industry, debunk myths currently circulating the public domain and advise current technologies available to retailers seeking to align their dual operations – desktop and shopfloor.

Over the past decade, the presence of online stores has grown in abundance at an accelerating rate.  A report released in late June by e-commerce platform, BigCommerce, found that Australia is positioned as the leading incubator for online businesses with the populace of online retail stores increasing by 200 per cent from 2010 to 2012. Further to this, online retail sales figures from NAB have shown sales spiked by 23 per cent in the year to April with Australian consumers spending  $13.5 billion, a rise from $11.2 billion for the same time last year. It’s safe to say, online sales have increased as the amount of online stores have also risen. Retailers once basing their core business on the outputs of its bricks and mortar sites, have expanded with online operations to keep up with the now increasingly thriving e-commerce domain.

By no means is expanding retail businesses with an online presence an easy and smooth transition. In fact, business managers are quite simply learning as they go, almost leaping into completely foreign territory and making changes on the fly.

One of the many challenges faced by retailers today is the streamlining of promotions available on the shopfloor with mirrored offers available online – and complimenting each other. Lorna Jane is an example of a retailer doing this well. With a rigorous cross-platform marketing program in place, promotions literally mesh with each other. For instance, promotions are valid online, in-store and by phone. With an ongoing email campaign, the major retailer provides links that not only drive purchasers to their one-click-away online store, yet also drive purchasers to their local stores for the in-store experience many shoppers still prefer.

From my perspective, there are four key areas that retailers need to focus on moving forward, and these are rooted in consistency.

  1. Purchase and order systems – Exchanges, returns and product pick-ups must be transparent and flexible across business platforms. For instance, “If I order online, can I pick-up in store?”, “If I buy online, can I return in-store?”, “If I buy in-store, can I post and exchange the product through the online store?” or “If I purchase online, can I still gain credits to my loyalty card?”
  2. Availability across all channels – Similar to retail stores being offered in various suburbs and areas for accessibility, now online stores must be available to consumers from various online platforms to cater to their mobile needs. Online stores should be aligned with apps for instant accessibility from mobile phones and tablet devices, and preferably utilising responsive design technology for ease of use. Further, brand engagement via social channels is an essential outlet for retailers – allowing consumers to play a role in the brand’s development and growth.
  3. Retail advice and knowledge – A significant benefit that drives footfall to a physical store is being able to speak with knowledgeable staff that can provide advice on products you may be choosing between – particularly inherent for technology and electronic related items. For instance, IKEA.com.au has an online assistant available 24 hours per day to respond to user queries. This is a step in the right direction, yet automated online services, in place of a human, can make answering simple queries a complex and frustrating task. Retailers must work to provide an almost equal level of knowledge to customers via online platforms, as consumers would if at the shopfloor and speaking with a retail assistant.

In essence, the larger reaching challenge for retailers is maintaining a consistent message and methodology across platforms, driving value between each and every point of presence. Business managers should embrace business management software that supplies data storage and support to both online and physical store operations. With the benefits of transparent operations becoming obvious, savvy companies in retail are managing business operations through enterprise resource planning (ERP) software.  The technology places key management touch points into a single interface – showing purchase orders, point of sale systems, and product stock figures in real-time. With purchase orders being placed by consumers from various touch points, ERP technology smooths business processes to ensure enough stock reaches shopfloors, and online orders are responded to instantly.

With the integration of Business Intelligence (BI) and data analytic tools, retail managers are able to keep a step ahead with access to flexible, reliable and real-time data.  From this, retailers can predict and respond to consumer insights gathered from trends shown, making strategic offerings that point to noteworthy return-on-investment.  Ultimately, BI provides businesses with instant awareness that accelerates decision making in a fast-paced industry based on trends, fads and responding to consumer needs ahead of the competition.

While online stores are receiving much attention, it’s important to note that no matter how much the e-commerce domain continues to boom, e-tailing will never completely replace the need for bricks and mortar businesses. Physical stores provide instant gratification, personal and on-site purchasing advice, and the social act of shopping with a friend are key advantages that are unlikely to plummet. Some industries however are more likely to be vulnerable above others.

In mid-July, Bernie Brookes, Myer CEO, spoke at the ARA Awards and in his opinion, online sales for department stores would level off at 10 per cent, electronics up to 25 per cent and books highest at 60 per cent. Retail purchases that require less subjective and aesthetic perspective are the items likely to accelerate online purchase figures, and it’s these industries that must embrace consumer behaviour to remain relevant.

Finally, the retail world is experiencing much change, yet it’s an opportunity for retailers to accept and respond to the market in innovative ways. The line between the retailer and the consumer is becoming more and more blurred, and with almost instant availability no matter where a person is located, brands and consumers can become closer than ever.

Brand advocates are the best form of marketing a retailer can achieve. In culmination, ERP and BI technology supports retailers to ensure that not only internal operations are running smoothly and efficiently, but consumer trends are also rapidly responded to.

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