The importance of having both a digital and physical store strategy is old news. Thinking about the two is something new that not all retailers have necessarily embraced.
A panel of retail executives at the annual Etail West conference on Tuesday batted around the impact of omnichannel on an organization and the changes that need to take place to remain relevant to consumers. One common theme that emerged: customers have to be at the center of the strategies.
“You’ve got to start with the consumer.…You’ve got to start the planning there and then go backwards,” said Nick Worth, chief marketing officer of omnichannel platform vendor Selligent.
It’s easier said than done with most retail organizations having layered on digital teams after the fact with the rise of online selling, creating silos within a company’s headquarters.
Gap Inc. about five years ago was still treating its online and brick-and-mortar as separate business units with their own presidents and then integrating its brands into that model. That later changed into separating out the Gap Inc. brands with their own president and head of e-commerce up until the most recent evolution where functions such as marketing and merchandising were streamlined into single teams.
“We’re in the middle of this journey,” said Old Navy vice president and general manager Blair Dunn, adding the focus this year is on organization-wide metrics and a customer-centric approach.
“Years ago there was always this conflict of is the e-commerce business stealing my store business,” Dunn said. “That conversation doesn’t happen anymore because we don’t think about it that way. We think about how do we want to service the customer? Where is she shopping? When is she shopping and how do we meet her where she wants to be met instead of trying to force her into one [selling] channel versus another channel.”
It’s not the easiest of tasks to unify operations. Even taking one item and trying to unify product codes across selling channels is a major undertaking pointed out Yona Shtern, chief e-commerce and omnichannel advisor for Sears Canada.
“The way we tried to approach it was we realized that trying to do it across an entire organization all in one shot was not going to work,” Shtern said, so the company tried pilots.
That began with applying an omnichannel approach to appliances and then learning from there.
Office Depot last August took its three selling channels — consisting of brick-and-mortar, e-commerce and business-to-business — and had all three report to the chief operating officer with shared metrics and a shared focus on the customer. The three divisions had previously operated separately from one another.
“It feels like most larger omnichannel companies are struggling with this idea of how do you put customers first and how do you incent and organize around that idea,” said Kevin Moffitt, senior vice president of e-commerce at Office Depot.
Part of the answer lies in performance metrics focused on the entire company, the executives said.
At Gap Inc., the compensation model changed to focus on all markets in all channels, Dunn said. That’s seen success.
“People were much more interested in what was happening in the online business and much more supportive and more willing to go out of their way in thinking about it as this is the future growth of our brand and if we don’t get behind it we’re going to lose out,” he said. “Without the adjustment in financial compensation it wouldn’t have been the same priority.”