A recent report into Australian retail has revealed why local players are lagging behind when it comes to integrating an omni-channel approach to business.
The study, conducted by global information firm Experian Marketing Services, surveyed 300 Australian retailers from sectors including fashion and apparel, and found that the majority of Australian retailers consider the impact of international online retailers on their business as a top threat to their future success.
However, a deeper dig into the report – titled 'Retail in Australia: It’s Time to Embrace the Digital Future' – also revealed that while 66 per cent of retailers admit international online retailers have impacted their business, more than half (53 per cent) don’t yet have any online transaction capabilities.
Ragtrader [December 2012 print issue], recently interviewed the experts and Australian fashion retailers to uncover why Australian retailers are reluctant to take the plunge, and can now reveal the six specific key challenges facing retailers, along with five top tips for successful omni-channel retailing.
The challenges facing retailers include:
- A “traditional” mindset
For many larger retailers, it is hard to overcome the “this is the way we’ve always done it” mindset and invest in new ways to drive sales.
- The fear factor
Again mainly affecting larger retailers, there’s the fear that e-commerce could go wrong (made worse by the prevalence of horror stories that highlight the damage done to reputations and brands) and the investment may not pay off.
- Legacy investments
Many retailers, particularly retail banks, have already invested millions in infrastructure and technology, like CRM systems, data processing systems, online stores and shopping cart functionality. They need guidance on how to leverage, build upon and use their existing investments together to adapt to current trends. Many are also seeking advice on how to integrate and make sense of customer information from multiple data sources to add value back to the business.
- Skills gap
Many retailers still lack the in-house capability to develop and drive online strategies, and rely on a more costly agency model.
- “Wait and see” approach
Put off by the rapid pace of change, many retailers prefer to see what’s round the corner. Yet this approach will only hold them back – it can be more risky to sit and wait for the next big thing rather than make the most of the e-commerce platforms that are out there right now.
- For the sake of it
Keen to enhance sales, retailers often build a campaign using a new channel because everyone else is. The lack of a clear digital strategy built to support overall business objectives is setting the campaign up to fail, regardless of whether all the above elements are present.
Five top tips for successful dual channel retailing
As a retailer – particularly if you are yet to engage in e-commerce – you need a clear strategy to get the right people to your site at the right time to buy. Here’s where you can start.
1 - Define your digital and offline strategy
Take a top-down approach and look at the overarching objectives of the business first. Then, feed these objectives into your online and offline marketing mix to create compelling cross channel sales and engagement strategies.
2 - Collect the right customer data
Digital marketing is powered by data. It’s critical to identify what data you need to collect – from both online and offline channels – to produce meaningful insights that drive the online strategy and maximise consumer engagement. Continually “reverse engineer” this data back into your digital strategy to ensure you meet your business objectives.
3 - Invest in the right technology
The lines between marketing and IT have blurred. Invest in a sophisticated CRM system that can be tightly integrated with online, mobile and other marketing efforts. Use CRM and database tools to build a holistic view of the customer, and then use this view to target your offers more effectively.
4 - Build your consumer engagement model
Be clear about what you want to achieve, both offline and online. Is it to grow your customer base? Crosssell or up-sell to existing customers? Then, use your CRM system along with customer segmentation and profiling to achieve these goals.
5 - Tactically build campaigns across multiple channels – use the right message at the right time via the right channel
Multichannel marketing is the way forward. Build integrated campaigns that adapt to the offline and online environments, to create meaningful and ongoing conversations with customers. At the same time, recognise that you can’t be present in all channels effectively. Choose your channels carefully and then leverage them to engage.
Source: Experian Marketing Services report: 'Retail in Australia: It’s Time to Embrace the Digital Future'.