February 19, 2015
Neiman Marcus snapping feature
PALM DESERT, CA – Obsessing over where a transaction occurs should be irrelevant for brands and retailers, according to an analyst from Forrester at eTail West Feb. 18.
Deciding if a purchase occurred online or offline can be nearly impossible to define with 49 percent of in-store purchases seeing online influences. An omnichannel approach breaks down the barriers between different sectors of the same brand and allows for the consumer to be the main focus, not the point of sale.
"Channels are something for ships to go by, consumers could care less about channels, but as retailers we are obsessed by them, we build our whole retail division by channels, the online and offline divisions," said Peter Sheldon, vice president and principal analyst at Forrester.
No boats here
It is estimated that in 2015 American consumers will spend $3.3 trillion in retail purchases. Ten percent of this will be online and 90 percent in-store.
However, if a brand were to get rid of their online presence, in-store sales would hurt tremendously and vice versa.
Coordination between in-store and online can drive success; omnichannel has to begin from within the channels of the company. For instance, when looking at financial statements the profit and loss is often separated between in-store and online, but it is nearly impossible to differentiate if a purchase is influence from the other.
The in-house integration will require a cultural change within companies. The bonus world cannot focus on individual sales and benefit the consumer to every extent possible.
Forrester at eTail West
For instance, in-store associates should not be driven by their personal sales numbers, but the sales numbers of the brand as a singular unit.
Four tactics to embark on this journey is to share inventory, share buying and merchandize functions and connect over the same technology and have a single profit and loss report.
The most difficult change is thought to be the single profit and loss. The bonus structure, the corporate performance and the financial structure has to be altered to merge into one set of data.
Some brands have enacted this by making bonuses based on the company’s overall growth, making every person of the brand work toward one goal.
Data-driven goals
Collecting data for marketing purposes is becoming the way of the future, but 21 percent of brands surveyed do not collect any analytics, according to a report from Forbes Insights.
Data-driven marketing is when brands use data to reach marketing goals and measure results. Data has always been about who bought something, where they acquired it, when they purchased it and what the item was, but with increases in data consumption, brands can now look into why a consumer bought it and adjust their marketing strategies toward this information (see story).
Staying on top of all the aspects within a brand and the in-store and online sales will likely be a step toward omnichannel success.
Italian lingerie maker La Perla has teamed with a software platform to create a platform that will be implemented for all La Perla boutiques and fashion stores were its products are sold.
La Perla worked with MicroStrategy Mobile to analyze sales and other company data points through key performance indicators. This new technology will allow La Perla to be aware of information in all its stores and make necessary alterations to tactics without too much delay (see story).
Brands must recognize the change that is coming and attempt to accommodate to the evolving internal structure that benefits the consumer.
“As digital readers, embrace, don’t deny this this is going to happen, become evangelists of the consolidation of online and offline,” Mr. Sheldon said.
Final Take
Nancy Buckley, editorial assistant on Luxury Daily, New York
Share your thoughts. Click here
