Op-Ed | Embrace Everywhere Commerce or Go Extinct

In today’s reality, retailers who fail to embrace omni-channel strategies powered by connected data risk becoming extinct, argues John Squire.

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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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7 comments

  1. Very interesting. John – how do you establish that the credit for an offline sale belongs to an online channel, without intrusive questioning?

    Gareth Townshend from United Kingdom
  2. Nice article John! I agree that a company will have an advantage over its counterparts by connecting data from all its channels. Obviously the larger the company the harder this is going to be. I was amazed at the stat you quoted ” 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”. Do you think the cost of pulling all this data together could be cost prohibitive to a particular size (large vs. small) of retailer?

    Sonya Nelsen from Lincoln, NE, United States
  3. I couldn’t agree more with the need to shift to an omni-channel, consumer-centric view. Data is certainly the number one hindrance to doing so. John, I’d be interested in seeing eCommera’s data solutions. @carigatto

    Cari Gatto Huszar from Port Washington, NY, United States
  4. If a brand chooses to be on multi-channels it must always keep in mind the brand image. It must be the same everywhere so that the customer can immerse in the brand’s values and won’t be disappointed.

    Ella for Modus Man – http://www.modusman.wordpress.com

    Modus Man company from Brooklyn, NY, United States
  5. Thanks for reading, Gareth. There are a couple of unique ways that retailers are connecting channels more closely than ever before, and they center around the concept of adopting a common Customer ID across channels. Take a look at Sephora’s integrated loyalty program in which they connect a customer’s purchases in-store and online, see what has been viewed online and then purchased in-store, and ask customers for reviews and recommendations to fellow shoppers on all of these products purchased across channels. It is a 360-view of the customer experience that rewards their most valuable advocates. You can also look to connected promotion codes – available online or via email – and only redeemable in store, as well as the connection of customer’s credit card data between stores and online (Nordstroms, Anthropologie and others have begun this practice). Those connections will only get more clear with synced data and a breaking down of the channel-specific mindset. A very interesting point was made by the CEO of Macy’s, Terry Lundgren, at NRF why they are investing to better understand and service customers across channels. When they looked at the customers they could identify across channels they found that for every $1 a multi-channel customer spends online, those customers spend another $4.75 in the stores within the next two weeks.

    John Squire from United States
  6. Thank you John. One more question if I may please? Does the implementation of common Customer ID and credit card data recognition technology only work if a brand owns all the doors/channels outright? Is it possible to generate data on how online drives offline sales at multi-brand stores that carry your product and vice versa? Gareth – ZANZAN Eyewear.

    Gareth Townshend from United Kingdom
  7. Interesting take on the state of fashion retail, an omnichannel approach to apparel retail will help retailers minimize warehousing costs with the help of new supply chain techniques and technology. I came across a whitepaper about this very topic that readers will also find very useful @ Count, manage and move: Warehouse inventory control strategies http://bit.ly/1kgYXWo

    Andrew Boon from New Delhi, Delhi, India