REDWOOD CITY, United States — Imagine a woman in her home in the mid-1700s, spinning wool by candlelight to supply the local weaver. As new machines like the spinning jenny and water frame became readily available, the value of her and other women’s contributions as individual artisans diminished. And, soon, their livelihoods and prospects for the future were challenged by the Industrial Revolution, which most never saw coming.
By the glow of the point-of-sale (POS) system and the bright lights of the showroom floor, today’s fashion retailer faces a similar challenge. A new revolution is upon us and retailers who continue to think of themselves as a store will simply be unable to produce, measure and innovate at the speed of the enlightened omni-channel retailer, whose business is everywhere.
While many retailers continue to think and manage their businesses according to channel — whether it’s a website, a store or a catalogue — the fact is, the customer has moved on and increasingly expects to be able to interact with her favourite retailer across channels, shifting seamlessly between online and in-store experiences. Synchronising inventory and shopping experience, not to mention returns, across multiple channels is the retailer’s responsibility. And the shopper expects to never have to see or interact with the man behind the curtain who makes it all happen.
Today, shopping is a complex and interconnected web of consumer behaviour that renders business decisions made exclusively according to channel quite dangerous. Retailers who continue to optimise according to channel are putting themselves at risk of a disjointed customer experience, reduced profits and languishing brand growth.
Here are some practical examples of situations in which channel-managed fashion retailers struggle to measure and adapt to increasingly common consumer behaviour:
Researching online, purchasing offline
Does a retailer credit the online channel for an offline sale? And will the retailer even have data that is well connected enough to be able to establish this influence? If not, online marketing that started the customer’s search will look like a wasted expense, although it could easily be justified when it is connected.
Buying on mobile while in store
The percentage of shoppers “showrooming” — that is, purchasing on a mobile device while in a store — varies wildly by brand and location. A recent study by Columbia Business School found that 70 percent of the 3,000 people surveyed in the US, UK and Canada said they had purchased on mobile while in a physical store in the last year. The fact is, customers increasingly expect the full product selection on the floor, regardless of a retailer’s space limitations, merchandising strategy or seasonality. And they seek better deals online, even on their favourite brands. So, how does the brand reflect this sale accurately, when it would traditionally be counted as a mobile-based online sale, but the store served a critical part of the consumer journey?
Online orders that ship from a store
As retailers adapt to the idea of “everywhere commerce,” they must start treating every store like a warehouse and, therefore, every warehouse like a store. So, from a channel-centric standpoint, does a retailer give credit to the store for shipping an online order?
The point is, without a unified view of your various channels and a unified plan of attribution, store associates can quickly become disenfranchised and channel conflicts can unravel even the best organisation.
Making the decision to operate as an omni-channel business is the first step that a retailer needs to take in order to survive and thrive during this revolution. But success requires one thing more than anything else: data. More specifically, the retailers who will succeed in the years ahead are those who are connecting the dots and taking action based on the mountains of data flowing in from their various channels, departments and activities.
But fashion retailers too often find themselves in the proverbial Dark Ages when it comes to data visibility. Ninety percent of the C-level fashion retailers who I speak with tell me that their data is “dirty” and incomplete. And yet, in the next breath, they tell me that they continue to make major decisions based on this partial visibility.
The best retailers, however, are already connecting data gathered from marketing, merchandising and operations, across both their online and brick-and-mortar touchpoints. They realise that delivering personalisation to customers online will only pay dividends if those customers can easily find the products they are looking for and receive them in pristine condition, on the promised date.
In the same way, the most lavish in-store experience with the most highly trained employees will only drive long-term loyalty if the merchandise in the store reflects what the customer expects based on the images she saw on her smartphone minutes before stepping into the store.
Keep in mind that the omni-channel revolution is ripe with opportunity for forward-thinking fashion retailers. Just as many industries benefited from the capabilities of new steam-powered factories in the early 1800s, the fashion brands that harness the power of connected data will have the chance to reap outsized gains. The key is developing an enlightened omni-channel strategy that enables educated, nimble decision-making based on this data.
Those who do so will lead. The others risk becoming extinct.
John Squire is president of eCommera North America, a cloud software business that combines big data analytics, commerce and order management platforms to deliver a next generation Decision Intelligent Commerce solution designed for retail.
The views expressed in Op-Ed pieces are those of the author and do not necessarily reflect the views of The Business of Fashion.
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