THE RETAIL BULLETIN - The home of retail news
HOME
RETAIL NEWS
RETAIL EVENTS
Fashion
Department Stores
Shopping Centres & Retail Parks
Home & DIY
Electricals
Health & Beauty
General Merchandise
Entertainment
Sports & Leisure
Retail Solutions
Food & Drink
RETAIL INSIGHTS
RETAIL SOLUTIONS
ABOUT US
CONTACT US
SUBSCRIBE FOR FREE
Increased investment  in Multichannel - NRF Annual Convention and Expo in New York

The unprofitable nature of non-store sales for the majority of retailers is the major prompt behind their increased investment in bringing their channels together to create a seamless multi-channel operation. By Glynn Davis in New York

GENERAL MERCHANDISE

Increased investment in Multichannel - NRF Annual Convention and Expo in New York

Speaking at the 101st NRF Annual Convention and Expo in New York Darryl Owen, vice president of head of trading industries EMEA at SAP, told Retail Bulletin that “maybe 30% of retailers are making profits from their non-store sales” and with increasing turnover shifting from stores to online this is a worrying scenario for merchants who are now making investments to address the situation.

This is occurring at a time when the shopper journey is increasingly straddling channels, and new disruptive technologies are giving consumers greater powers – with mobility and social networking having a big impact – and taking control out of the hands of retailers.

These are combining to prompt a behavioral shift. “Consumers have access to a lot of information, are impatient, and they are not very loyal. We can all do things with the trusty iPhone and it is very unpredictable for retailers,” said Owen.

He also outlined a number of other operational challenges now hitting retailers including the silos within which they currently operate their individual channels, which he says has led to great amounts of duplication. “There is now a lot of extra stock in the system and the cost bases of retailers are significantly higher as a result,” he said.

Another cost issue revolves around pricing and promotion online versus in-store, with hypermarkets running maybe 200-300 promotions per month whereas on the internet this could be 200-300 per day, which is leading to a “death spiral in pricing” both in-store and online.

Further complicating the stores versus online scenario is the ever-shortening product lifecycle. With products on the shelf for as little as three weeks in many fashion stores there is an issue of retailers needing to heavily discount any stock left in-store in order that they can clear the shelves. But in contrast, the same product might be in big demand online and be going out-of-stock. This lack of stock management capability across channels is leading to significant lost revenues.

“Many retailers can’t even say ‘what the levels of online sales are in a specific region’. Multi-channel retailers really need to understand this. We’re taking the view [at SAP] of looking at where was the stock delivered to as opposed to where was it sold. This better enables retailers to manipulate the mix across the channels, suggested Owen.

What retailers have to adopt in order to address these manifest issues are: applications that operate in real-time; standardized data across their organisations; simplified interfaces; and have everything is built for personalization. “If it’s not instant and personal then it’s not relevant,” said Owens.

Such a scenario would require retailers to eliminate cross-reference tables, take out batch processing and replace it with real-time solutions, and reduce the number of interfaces to a minimum. Owens recognised that the complexity of such a move would “not be a cookie cutter approach” and would need to be tailored to each retail business.

But with this backdrop he says retailers can then start to deliver personalization in real-time to their customers, which he regards as likely to be an increasingly important aspect of their business in the future. SAP’s Apollo solution looks to provide exactly this through the creation of customer profiles that include their preferences.

These can then be used to drive promotions by linking to the retailers’ stock positions and communicating the messaging to the customer down the relevant channel (determined by where they are at that particular time). “The system can be used to make relevant promotional suggestions as well as sending recipes and product reviews. It could increase both the basket size and promotional conversion,” he said. This solution is currently being trialed by three retailers who Owen said have enjoyed boosts to their businesses.


Don’t miss the Retail Bulletin’s Multichannel Retailing Summit 2012 February 1st in London. Sponsored by eDigitalResearch, the theme of the day is  ‘Driving ROI through profitable, engaging, seamlessly integrated and consistent multichannel strategies’. Speakers are from GAME, Marks & Spencer, Santander UK plc, Boots.com, Schuh, Halfords , Irisa Group Ltd,Tesco.com,Joules Clothing, Everything Everywhere,  o2 Telefónica, Adnams Plc, r, eDigitalResearch, Collect Plus, Norbert Dentressangle,  K3 Retail,  2ergo,  mBlox.  Click here for full details and registration.

Email this article to a friend

You need to be logged in to use this feature.

Please log in here

Subscribe For Retail News

RETAIL EVENTS

Retail Human Resources Summit
Retail Human Resources Summit
Wednesday 3 October 2018
The Cavendish Conference Centre, London W1
The 10th HR Summit 2018, The Cavendish Conference Centre, London W1, 3rd October 2018
The Retail Design Summit 2018
The Retail Design Summit 2018
14 November 2018
The Cavendish Conference Centre
The Retail Design Summit 2018
Omnichannel Futures Conference 2019
Omnichannel Futures Conference 2019
6 February 2019
Cavendish Conference Centre, London WG1 9DT
A truly omnichannel offering requires an understanding of customer behaviour across all shopping channels and how this should impact your overall business strategy
Customer Engagement Conference 2019
Customer Engagement Conference 2019
5 June 2019
Cavendish Conference Centre, London W1
The 10th Annual Retail Customer Engagement Summit
National Minimum Wage Breakfast Briefing
National Minimum Wage Breakfast Briefing
20 September 2018
6th Floor 1, St. Martin's Le Grand London, EC1A 4AS
National Minimum Wage Breakfast Briefing