BrainTrust Query: Four Keys to High Online Growth for Omnichannel Retailers
Earlier this summer, we conducted a private benchmarking study for clients that were interested in learning approaches to omnichannel integration from peer companies. All of the participants were historically strong brick and mortar or catalog retailers in various stages of growing their online business. Four of the companies in the study grew their direct business in 2012 faster than Internet Retailer’s Top 100 average (range was 20 – 40 percent growth).
As part of the study we looked for commonalities among those four high-growth companies and here is what we found:
1. Shared Services for Merchandising and Creative – At these high-growth retailers, merchandising groups are organized by product category, not channel. Within the teams, store and direct merchants collaborate to present a consistent offering to the customer, regardless of channel shopped. Similarly, the creative function operates under a shared service model, following product launches or marketing campaigns across channels.
2. A Different Approach to Talent – The retailers are sourcing talent and making key hires from tech companies like Amazon, Microsoft and IBM. Some of them are located in tech hubs like Seattle and San Francisco and those that aren’t are opening "lab" style satellite offices in one of these key digital talent markets.
3. Technology Investment – A shared services approach won’t be effective unless the systems are in place to support it. The leading retailers in the study are now benefitting from their previous investments in fundamental infrastructure, including integrated inventory management, product information databases and creative asset repositories. They have turned their attention to the "front-end" and are investing in both e-commerce features (ratings and reviews, social integration etc.) and digital tools that empower store associates to serve the omnichannel consumer.
4. Reinventing the Catalog – Many retailers have changed or cut back on their catalog strategies, but the leading retailers in our study have reinvented how they use the catalog. Printed catalogs have become "lookbooks" incorporating high quality photography and design values, while digital catalogs have emerged with direct click-to-purchase functionality. In some cases, merchandise is now featured alongside editorial feature stories. Whether print or digital, the primary role of the catalog is now as a marketing vehicle and a venue to tell brand stories.
While these four strategies are not the only ways for a traditional retailer to grow an online business, there was a clear correlation in our study between a high degree of channel integration including the strategies above and a high rate of growth in the direct channel.
How would you rate the four strategies mentioned in the article toward guiding omnichannel integration? Which approach is the most challenging for retailers to tackle?