Keith Bird, CEO at eSellerPro, tells Retail Times readers what he expects to see next as online retail shakes off its growing pains and heads into adulthood
Whilst the past 15 years have seen the birth and formative years of online retail, we are without doubt now well into the adolescence. Online retail has come a long way and, in some respects, it’s now a relatively mature beast; retailers have become comfortable with the notion of marketing and selling products and services online and consumers are well accustomed to browsing and paying for goods in the digital domain.
There’s always been a notable distinction between online retailers that have grown up as pure-play online sellers and those that have earned their stripes in traditional retail and have gone on to expand their strategy to include online selling. There are of course many similarities in the challenges faced by each group, but the differences are perhaps much more significant. Whereas the likes of ASOS, Amazon and Moonpig have been built from the ground up to operate online, some of the UK’s biggest and best-loved brands have worked tirelessly for years, and in some cases struggled, to make the transition from the offline realm. It’s a tough journey, but the benefits are clear.
A multi-channel strategy gives larger retailers infinitely more flexibility with their product ranges. Not only do they have the scope to sell the season’s latest offerings in store and online, there are also online channels that are actually better suited to selling last season’s leftover stock and products that may no longer considered best sellers – or even returned goods that can no longer be sold as ‘new.’ The likes of eBay and Amazon were once viewed as being the domain of the smaller retailer and maybe still are to many, but it has become clear these kinds of channels also offer big retailers the opportunity to tap into new routes to market that simply can’t be accessed through their own websites alone.
However, while multi-channel retailing certainly has undeniable benefits in terms of making sales and clearing stock, it throws up its own set of challenges. Not so long ago retailers had to just contend with having the right stock available in appropriate stores. Then along came e-commerce websites, with all the planning and logistics that comes hand in hand with the notion of ‘multi-channel.’ Add multiple third-party online platforms into the mix and it makes for an extremely complex picture when it comes to stock and order management. A significant challenge yes, but certainly not an impossible one. The likes of Argos, Tesco, John Lewis and Topshop are all shining examples of best practice and innovation when it comes to multi-channel selling and there are plenty of other retailers that would be wise to look their way for cues on how to make the most of the various channels that are out there.
When speaking to larger retailers that have successfully implemented multi-channel strategies, we hear time and again the biggest challenge they faced was integrating their legacy systems into the new software and technologies they had deployed as part of that journey. This is something that really needs to be nailed in order to make multi-channel work successfully. The moment that stock levels or product listing information gets out of kilter, the customer experience is affected. In these incredibly tough economic times, when social media is becoming ever more influential in people’s purchasing decisions, customer trust, once lost, is incredibly hard to regain.
So going back to the future, what can we expect? In fact the next five years are likely to be even more formative for retail than the past five have been. Mobile, social and location-based commerce are all presenting new routes to market, new tools for customer engagement – and of course new challenges. Retailers should be approaching this fast-changing landscape, not by viewing each channel as a new, standalone route to sales, but as one converged channel. Customers have become increasingly savvy when it comes to reviewing the products and services available to them and retailers need to see this as an opportunity on a scale never seen before – to be able to offer the customer exactly what he or she is looking for, when they want it, via the platform they prefer to interact on. Of course, not all platforms are appropriate for all big brands, but their potential needs to be closely explored. The bottom line is retailers need to be actively engaging with each of these new platforms now, or risk losing out to competitors that do.