Data could hold retailers back this Christmas

Retailers’ biggest priority in integrating online and offline sales channels is providing delivery of online orders direct from stores, according to new research seen exclusively by Marketing Week. But is it a consumer priority too or is it just the easiest step for retailers to achieve?

Michael

The survey of 337 business leaders by Forrester, commissioned by ecommerce specialist OrderDynamics, suggests being able to take online orders and then ship them from stores is not only the most common ‘omnichannel capability’ already in place at retail companies, it is also the leading strategic priority and the biggest source of increased online revenue.

It’s not surprising that this should be the case. Particularly for retailers with large physical store footprints, warehousing space and product-picking staff are often available on-site already. Online stock and store stock can be one and the same, removing the need for separate inventory operations.

But could taking this easy option also be a problem as well as a solution, if you look at it from the customer’s rather than the business’s point of view? If you’re a customer using any retail sales channel – in-store, online, mobile, mail order – all you care about is being able to buy the right product at the right time, and getting accurate information about stock levels, sizes and delivery times. Anything else inevitably leads to a bad shopping experience. The question is whether focusing on store deliveries is the best way to get this right.

At the crux of the issue, as usual, is data. Retailers surveyed by Forrester say the accuracy of inventory data is the biggest barrier to setting up a ‘ship from store’ programme, with 27 per cent saying it is “very challenging” and 44 per cent calling it “somewhat challenging”.

Michael Ross, who founded underwear retailer Figleaves.com and now runs OrderDynamics’ parent company eCommera, points out that the principle of ecommerce or omnichannel retail (whichever you prefer) is that the customer believes “all products in all locations are available online”. He adds that from the retailer point of view, “if you fixate on channels and fixate on stores, you start making bad decisions”.

He mentions one high-end US retailer selling luxury fashion, which came to eCommera asking how it could better manage its 75 million rows of inventory data, after frequently finding that it was wrong. Customers would order products online and either because they were sold out, damaged, stolen or adorning store mannequins, they just weren’t there.

Shipping from stores could be the best option for some retailers, without doubt, but only for those who are confident that they have the data systems in place to tell them exactly what can be sold to whom and when. If your brand is only doing it because it’s the cheapest and simplest solution for the business rather than the best guarantee of customer satisfaction, in the long run that’s going to limit you.

Marketers need to be able to make this case forcefully – but that’s something they look certain to struggle with, since the OrderDynamics research shows it’s usually the IT department that’s left in charge of implementing ecommerce initiatives.

It’s at this time of year that successes and failures will be crystallised. If you’re a retail marketer whose delivery operations fall down this Christmas and your customers suffer, you should start asking searching questions of your business in the new year about just what its priorities are.

Voting for Data Professional of the Year closes on Friday 22 November, so click here to vote before the end of the week.

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