With the global economy looking fragile and one of Australia’s largest trading partners, China, slowing down, it’s important for Australian business decision-makers to re-evaluate their position as the new financial year begins, according to Atradius. Mark Hoppe, managing director, Oceania, Atradius, said, “The start of the new financial year is traditionally an ideal opportunity for Read More…
4 steps to developing a multichannel business
Tue 9 October 2012 - 7:00 amGrowing | Hot Tips | Retail
There are many aspects to consider when a business approaches multichannel retailing.
A one-size-fits-all structure certainly doesn’t apply as companies have to consider the size of the business, the maturity of the business in the multichannel realm, the company’s branding strategy and compatibility in each channel, current distribution and information systems, and their position in a new channel.
1. All channels must be aligned
There’s one constant for all organisations though; all channels must be fully understood, supported and championed by the company leaders in order for integration and coordination to be achieved.
It’s no longer sufficient for companies to adopt a decentralised structure, though this happened a lot in the early days of online retail with the creation of separate teams for buying, merchandising, planning, marketing, finance, analytics within each channel. Take US retailer Walmart as an example, which flourished in the beginning with rapid growth and innovation from this approach, but in the end it resulted in customers becoming confused by the different shopping avenues, and the retailer had to reconsider its method. It also led to a larger propensity for cannibalisation and duplication, and made it hard to alter multichannel pricing, promotions, product and customer information.
2. Marry up all channels
When it comes to Australian multichannel retailing which is somewhat immature, a degree of decentralisation should be assigned, otherwise you risk having the new channels being sidelined with the Gerry Harvey-like view, ‘it’s only X% of my business, why should I give it so much attention?’ A better organisation structure approach is with a concept I’ve labelled ‘centralised-decentralised’, where the central eCommerce or ‘e-business’ team takes care of strategy, frameworks, analysis, complex project execution and end-to-end customer journey, while the brands look after marketing, merchandise, planning and buying for all channels. For this sort of structure to work, the head of e-business must report in to the CEO or COO, not to IT or marketing, that way an integration of multichannel helps to fight silos within the organisation
A lot of retailers still report sales by channel which can cause channel conflict, where the different channels almost see the other channels as a direct threat. This separation process can sometimes lead to channels being ignored, or at worst, sabotaged because it’s seen as a threat. This way of reporting goes against a ‘multichannel view’, which in turn, reduces the power of the ‘endless aisle’ and ‘never miss a sale’ opportunities other channels create.
3. Customer consideration
A better way to approach an organisation structure is to consider the customer up front, and make customer interaction the key behind all team structures. Ensuring that the team is always considering the customer and that every role is designed with the consumer in mind – from company objectives to KPIs to daily interactions – will go a long way to motivating employees to think in a multichannel manner. Taking the channel out of the equation and rewarding people on sales no matter what channel the customer chooses is best practice to me. Creating this united entity can help to break down the silos, and break away from the single-channel approach.
A united structure should be the ultimate goal, incorporating online, catalogue, customer service and other elements. However, embedding multichannel into the organisation may require recruitment shuffles with boards, executive teams and senior management so that multichannel is aligned.
4. Seamless cross-channel Experiences
A multichannel-ready organisation structure will provide the groundwork for success in retail, while also establishing a seamless customer experience, no matter what channel they choose.