“Actually, e-commerce is just commerce,” says Marc Huijbregts, Managing Director Accenture Digital. “E-commerce literally means that you sell 100% online, like the Bol.coms of this world. The most successful retailers are those who adopted a clear omni-channel strategy a long time ago. They sell their products and services through various channels: online, physical and mobile. E-commerce is ‘business as usual’. It’s the new standard in 2016. Today’s consumers want to be able to buy products, return them, and ask questions through all channels.”
Keeping up with online
Companies that have yet to make the major transition to a mature omni-channel strategy are already running late. “No company wants to end up like Kodak,” says Huijbregts. “And yet you can regularly read about struggling companies in the papers. Companies that fail to properly integrate their online strategy into their overall strategy and don’t have a mature presence online are increasingly falling behind – with all the negative consequences that entails.” Huijbregts cites the case of Macintosh, the parent company of stores such as Dolcis, Invito, and Manfield, and formerly also of Halfords and BelCompany. “They didn’t pay enough attention to online. And it’s not the only company to miss the boat. The world and consumers are changing rapidly. It’s up to companies’ managements to keep up with these developments.”
Although consumers have been buying products online for many years, managements have not always realized the strategic value of online buying. “People generally find it hard to change. They often hang on to their old strategy. However, to reach today’s consumers and to stand out from the crowd, a more market-oriented way of thinking needs to be adopted at boardroom level.”
Retail is detail
It is not just the lack of a market-oriented approach that is the trouble. In addition, in many cases, insufficient resources are freed up to fund a well-integrated strategy, a sound organization, and talent. But these are all essential factors. “You often hear that ‘retail is detail’, and this certainly applies to online,” says Huijbregts. “As a retailer, you need to fine-tune to perfection. That’s what consumers expect these days. Communication, navigation, logging in and out – everything needs to go smoothly, or consumers will simply go elsewhere.”
Online revenue can also be increased by applying analytics to your target group, both with regard to current and new customers. This includes smart algorithms that suggest other products that customers might find interesting. “Many stores could refine their cross-selling and up-selling. We all recognize this phenomenon: you book a holiday online, for instance to Ireland, and for the next umpteen weeks, you keep seeing online ads for other holidays to Ireland. You don’t want that.” A company that has successfully tackled this issue, says Huijbregts, is Bol.com.
A boardroom topic
Retailers do not always realize that making the switch to an omni-channel strategy is one of the biggest changes they will ever make. In fact, a retailer’s online strategy should be a boardroom topic, emphasizes Huijbregts. “It could be the remit of a marketing director, or a board member for e-commerce. If more than 30% of revenue is earned online, the board should be involved.” The transition to online is a strategic program. “What’s the added value of a physical store if customers buy online? It’s the shopping experience. But what does that look like these days? And is this experience special enough to justify a premium? In other words, can you sell the product in the store at a higher price than online?” Retailers moving to an omni-channel strategy would be well-advised to think about this carefully.
3D printing and virtual reality
Every company needs to engage in ongoing innovation. Certainly in the world of retail, new technologies will lead to even more changes. “Take 3D printing. This will turn everything upside down. Although the type of material used still needs to be improved, it has already opened up opportunities. Nike, for example, is customizing shoes: 3D-printed shoes always fit better than shoes bought in the store.” Another technology that will be very influential, says Huijbregts, is virtual reality. “This particularly adds value in terms of the customer experience. In the construction industry, for instance, it can be used to enable buyers to walk through their new home before it is built. And travel agencies can show travelers around a hotel and its surroundings.”
Huijbregts acknowledges that companies that started off as online stores have an advantage over those that started in bricks and mortar. “If you start an online store from scratch, you don’t have a legacy to deal with.” Nevertheless, there are examples of stores that have managed the transition to online very well. One example is John Lewis, a British chain of department stores. “These department stores for consumers in the mid-market segment used to have a rather staid and boring image. A few years ago, however, the company developed and implemented the right omni-channel strategy. Now, 25 to 30 percent of its revenue is earned online.” Having a good vision was part of the success, as was having the guts to take the necessary steps. “John Lewis understood that the switch to online required more than just a website. It’s a complete program, involving a website, marketing, staff and logistics. Whether you’re selling just one product online or a hundred thousand products, you need a solid basis.”
Like to know more about digital commerce? Visit the Accenture Digital website.