1. Multi Channel Retail Thinking
2. Project Management Thinking
Rob Stone, Principal
11th April 2006
What is Multi Channel Retail (MCR)
Charteris defines MCR as:
One view of the customer
One supply chain
One service policy
One assortment/product range across multiple channels
Background
Difficult retail environment
Internet shopping maturing
Retailers’ upgrading websites
Industry view is that successful retailers providing integrated shopping
More customer information available
Technology costs falling
Mail Order and E-commerce account for 11% of total retail sales
Record Numbers via Web and TV Shopping
ICD Oct 05
The Survey - Who we spoke to
Turnover above £200 million
40 blue chip, high street retailers
Senior Board, Middle Management
Anonymous
Questioned about Multi Channel Retailing
Channel Penetration
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Call Centres Catalogues Digital TV In-store Kiosks M-commerce Stores Web site
Channel
YES
Key Findings♦ The most admired retailers were
perceived to have their full range of products and services across all channels
♦ Retailers still focussed on battling for transactions rather than winning the war for life time value
♦ Key issue – channels managed separately and often at too low a level
♦ Level of service inconsistent across the channels
♦ Lack of integration is causing significant “leakage”
Multi Channel Retailers
Best – Argos & Next
Key Findings♦ Expansion Areas
♦ into m-commerce (30%) ♦ in-store kiosks (18%) ♦ and digital TV (15%)
♦ Most admired multi channel model♦ Argos… large range available♦ Tesco… strong brand♦ Amazon… dominant on web
What does it all mean?
4 key areas
Responsibility & Strategy
Cultural Change
Customer & Brand
Supply Chain
That if addressed will increase customer base.
These changes will be driven by significant reduction in the cost of Technology
Responsibility & Strategy
The Multi Channel Retailer Test:Q1 Who is responsible for sales through all your channels?
Q2 Who champions the customer?
Q3 Is that person on the Board?
Q4 Can they set agendas for Technology, Logistics, Customer Service, Product Assortment and developing new customer services?
Q5 Have they summarised the vision for MCR in the organisation and communicated it to all levels?
Q6 Can you see the MCR plan for 3 months, 6 months 3 years and 5 years?
Q7 What are the published KPI’s for MCR
How many would you score?
Cultural Change
Does everyone understand what retailing will look like in 3, 5 and 10 years time?
If selling to a customer is made up of many touch points who gets the credit?
Do senior managers really understand the recent technology changes and what it means to retailing?
Do buyer, managers, merchandisers, stock handlers, sales assistants, store designers, customer service assistants and directors know what will need to changes about their job for MCR?
Customer & Brand
“We have a strong information flow within each channel silo, rather than across them”
“it’s difficult to manage consistency across the different channels”
“lifetime value measurement is a key criterion that we’ve started to develop within channels”
Who champions the customers?
How do your customers see your channels?
Do you want to drive sales to the shop or on line?
Which is more cost effective for your retail operation?
Do you treat the same customer in different ways in different channels - price?
Do you have a 360 view of the customers wants and needs?
Supply Chain - A Customers View
Can I get my goods when and where I want them – in store or delivered?
How come you have run out of stock in store and why didn’t you offer me a delivery from the web stock?
If my product is faulty can I take it back to a store or send it back by post?
Is it the same price on line as in store and if not why should I pay more in store?
Can I order it in store and have it delivered direct.
Can I order on line a collect it on Saturday when I am shopping?
Can I have timed delivery slots?
Since May 2005 Woolworth has allowed customers to buy over 300,000 products for home delivery via its 824 stores EPoS
The New Shopping Landscape
Retailing faces the convergence of influences which are dramatically altering the landscape:
impact of change24x7 culturereducing cost of ITPC + broadband penetratione-commerce changing consumers’ behaviournew retail formatsnew channels (iTV)new channel specialists (ebay, Amazon)Specialist /mass market polarisationno barriers from cost or age
Thenew
shopper
Birth of the New ShopperBehaviour polarisation:
loyal to strong brands, disloyal to weak
Technically savvy, literate and competent with ITAll agesAll socio-economic groupsSophisticated comparison shoppersSpeed of availability and delivery increasingly crucial:
“I want it now!”Has eBay saved the Post Office?
Not a slave to a channel – ingenious users of channels for their advantageConvenience and certainty
Need for a New Retailer
Offer reasons for customers to come back
Consistency across channels of:
range
price
expert service
Mass market vs niche – which playing field?
Single view of customer
Weak brands won’t survive
Project Management Thinking
Christmas Present?
Planning
Requirements Gathering
Tracking and Control
Look and Feel
Go-Live Migration
Christmas Present?
Business focus on 12 weeks to early January
50% revenue in Q4. 25% in December
Business drives a September / October launch
Still require stabilisation period
Still require business involvement
Still require Christmas Change Freeze
Initial Project Sign-off
Mid Q1 after January rush over
Business readiness
ITT / Review responses
Planning
Software development or Change programme?
Always listen to the team pessimist
Treat all channels alike
Web / Call Centre / Mail Order
Common catalogue
Customer-centric view
More marketing involvement = More time
Customer Conversion / Retention
Website tagging
Pricing feeds
Performance / Response Times
Design it in from beginning
Requirements Gathering
Business team needs deep business knowledge
Are they being taken out of the business to support the change programme?
Do the requirements support the MCR model?
Difficult to break out of silo mindset
Single customer? Common catalogue? Common prices?
Release Genie from IT Bottle
Gathering requirements versus wishes
Want versus Need. Expectation management
Tracking and Control
Project manger should own the planDo not detach yourself from planning and reporting process
Track internal and external dependencies
Are you being challenged by the Project Board?
Are benefits being delivered?
Management ReportingQuality thinking timeGood …. and bad newsPlanned activities in period …. Deviations… Reasons… Actions
Look and Feel
Customer JourneyConsistency between channels
Basket / trolley / cart
Entering payment card details
Persona driven design?
Story BoardsAgree basic layout
Alignment problems on website
Anomalies from real data
Who will sign-off design?Marketing manager / Sponsor / CEO
Time consuming