DO RETAIL STORES STILL MATTER IN THE DIGITAL AGE? RETAILERS STILL NEED TO BRIDGE THE GAP BETWEEN ONLINE AND IN-STORE SAY BRIAN HUME, CEO MARTEC INTERNATIONAL, AND ROBIN COLES, MICROSOFT TECHNOLOGIES ENABLEMENT LEAD, HSO
ast year The Guardian ran the headline: The future of e-commerce: bricks and mortar. The article was a wry look at Amazon’s decision to open a physical bookstore in Seattle, and its tone a reflection of the irony of the situation. While this one shop didn’t reverse the entire online retail revolution, it was an important acknowledgement that the traditional store still does have a key role to play in a retailer’s strategy. Since then other native online businesses have gone into bricks and mortar. There have been other changes too. For example, some Waitrose stores have sacrificed retail space for changing rooms for click and collect John Lewis customers. There is also evidence of a strong relationship between online and in-store sales. Once we thought physical stores would turn into showrooms only, but now customers are just as likely to do their browsing online and then make their purchases in store. Evidence shows that when a store closes in any given area, online sales decline too – and when a store opens, the reverse happens.
Click and collect has also added to the complexity of the situation. One major women’s clothes retailer reports that 25% of click and collect customers make additional purchases once in the store. In-store customers, even those collecting goods ordered online, provide retailers who have good customer service skills with the opportunity to increase transaction value; something that is more difficult in pure online sales. So this relationship between channels suits both customer and retailer alike. It’s no longer just about maximising profitability per square foot in the store any more. It’s also about optimising the trust value
in the brand. But it’s difficult to translate service into the digital world. It’s no longer a single channel journey. It’s whatever the customer wants a retailer to do to deliver its brand promise. However, if a retailer doesn’t take care of their back office operations, they risk not being able to deliver on their promise and misplacing the customer’s trust. And so this brings us round to technology – and the challenge here is that many are still using systems designed to address yesterday’s problems, not those of today or of the future.
UPGRADING SYSTEMS FOR NOW AND TOMORROW Robin Coles
Corporate systems such as ERP are often well over a decade old and only survive because of continual enhancements. This means that typically they represent a major investment – and because they have been customised over the years it might be difficult to make the case for replacement or upgrading. Yet in this 24/7, on-demand world, many of these systems may not be up to the job unless they are upgraded. This is why many retailers are taking the plunge and either replacing all of their legacy ERP systems or investing in improvements. Historically ERP systems looked after logistics, distribution, product management and finance; the customer module did not exist. But if you look at the
“It’s no longer a single channel journey. It’s whatever the customer wants a retailer to do to deliver its brand promise.”
main enterprise resources retailers actually own, it’s their stock and their customer information. ERP can no longer be hidden in the back office. The more that can be opened up to different business areas, such as sales and customer service, using straightforward user interfaces and new integration patterns through the cloud, the more retailers will be able to deliver on their promise.
EMPOWERING CREATIVE SOLUTIONS
So it’s down once again to a single view of stock and a single view of the customer – and both easily accessible to staff via a mobile or tablet, whether they are in the fitting rooms, the warehouse or on the shop floor. But it’s also going to take a change of mindset; a transformation of the traditional bricks and mortar store, replacing wrapping and sales points with kiosks for online browsing and beacons for checking a customer’s buying history and directing them to relevant areas accordingly. Although often quick to embrace creative trends, the retail industry has been slower than others in appointing chief information and technology officers (CIOs and CTOs) into the executive board. More technology experts in high places will allow for a mind shift, with someone at the top empowering the business and creative minds to think freely without worrying about the complexities of the technology that will be needed to facilitate their vision. The technology is available but many retailers are still wondering which way to turn and how to maximise new opportunities. Upgraded ERP systems can help future-proof the operation and provide a firm foundation to accommodate further twists and turns in the retail story. MARCH 2017 GET CONNECTED
Published on Mar 20, 2017
04 Editorial Comment 06 The Word In and around the industry 13 Guest Column Retailers still need to bridge the gap between online and in-sto...