Tag: eCommerce

This in my Editorial from the November issue of Internet Retailing Magazine. Also available as ‘digital print’ via the November digital edition.

Searchandising (ugh) and merchandising relate to retailers’ promotion of sales of products to customers. Ian Jindal wonders whether we oughtn’t also consider how the relationship between our customers and our suppliers might be improved, and ponders whether the English language can survive the word “Purchandising”…

Merchandising – the art of promoting goods for sale by their presentation in retail outlets – spawned the non-word “Searchandising”: promotion of products on-site by means of search tools, faceted navigation and browse, increasing the relevance of products shown to customers.

Relevant, coherent product presentation increases the likelihood of a sale, may not increase overall profits. We may sell more of our great products and somewhat more of our (now well-presented) mediocre products, but we may not sell the ‘dogs’ or purchasing mistakes, destined for land-fill or recycling.

Searchandising attempts to square a resolutely-round circle – the tension between extending product ranges (category authority, dominant range, long-tail SEO) and the desire to minimise ranges (to conserve cash, increase the yield on stock). Despite the science, however, there’s a sneaking feeling that there’s something fundamentally flawed in a retailing approach that is so focused on persuasion and manipulation to push sales. Indeed, promotionally-led retailing could be seen as the practice of selling the unnecessary and unwanted to the unwilling. Could we not find approaches that increase the ‘inherent desirability’ or relevance of products?

“Purchandising” would be the practice of improving the specification and procurement of products and services so that they better match the needs, desires, interests and aspirations of customers (thereby reducing the marketing and promotional demands to convert customers’ interest into cash). This is different to ‘normal procurement’ since it would be based upon insight to customers’ behaviour, a high level of collaboration and ultimately co-creation. Let’s consider each in turn.

Customer insight blends qualitative and quantitive data on preferences and choices to inform buyers as to the products to buy. Null on-site search results (ie where a customer searches for products on your site that you don’t stock) is an indicator of unfulfilled interest or demand, for example, while “On Site Not Seen” metrics (products stocked but never viewed by customers) might indicate stock ready for liquidation. Equally, verbatim comments in user reviews will help improve the quality of products stocked.

So far, though, so normal. This is simply improving the standard procurement cycle.

In our feature on NakedWines later in this issue we have an example of collaboration between the business, the customers and the suppliers to create new products of increased relevance to the customers. NakedWines introduce new wines to their knowledgeable and enthusiastic Wine ‘Angels’, while those angels in turn support those winemakers identified as prospects by the company. It’s open, radical and interesting: but there is a further possible step: co-creation.

Consider that a product is specified in isolation, produced in bulk, promoted ‘at’ people to persuade them that they wanted it in the first place, and a numbers game ensues in which we hope to pulp a sufficiently small percentage to remain in business. Far better, then, would be to co-develop products with customers, and release a better-rounded ‘version 3’ product at scale. As retail outlets become ‘experience stores’ to understand and interact with a brand’s products for later purchase, we’ll see manufacturers sharing prototypes with customers. Phone manufacturers may hand out maquettes and prototypes for feedback in store, and designers assess short runs prior to fuller production. This approach is already visible at https://www.sample-central.com/ (formerly SampleLab) where customers get to try products, take them home and assess them – in return for surveys and insights that improve the products for a mass market. The founders coined the term “Tryvertisting” – trying and experiencing and precursors to great products, rather than advertising post-manufacture to make up for deficiencies…

Whether we’re able to make the move immediately from procurement to co-creation or not, surely it’s time for professionals in buying in the digital age to come to the fore and engage fully with customers to increase relevance, coherence and profit? Developing our tools, KPIs and approaches to seek customer input, create products alongside them which will satisfy need (at least) and delight (at best) must be the aim. This would be the art of “Purchandising” – a full partner with the digital marketing, social media and searchandising skills of our colleagues. While our new word may assault our ears, it may also release some ideas and action – to the benefit of customers and our profitability alike.

Here’s my editorial from the September 2010 edition of Internet Retailing magazine. You can see this article in the digital edition here:

https://viewer.zmags.com/publication/bd0ff4ae#/bd0ff4ae/6

We’ve long predicted that multiple channels will give way to an integrated commercial approach, but inspired by the World Cup – and not allowing his utter ignorance of football to stand in his way – Ian Jindal reflects on the lessons from the Beautiful Game’s radical transformation in the 1970s, drawing parallels with today’s changes: welcome to the age of Total Retail.

In January’s column, we looked forward to a year in which Boards would place ever-increasing demands on the eCommerce teams, and that eCommerce leaders will need to become rounded, commercial leaders in order to secure their role on the Board. Since January we’ve also seen the rise of mobile and m-commerce and this has increased the pace of innovation and digital development, further eroding channel boundaries. M-Retailing.net, our new title, charts the increased pace of change, but there remains a nagging feeling that the game has changed.

In our businesses we expect our teams to combine deep functional expertise, with a non-trivial appreciation of other disciplines, and finally an ability to assimilate and master change situations, new skills and the changes in customer behaviour and demands. Admittedly there’ll be training – both corporate and self-directed – but there is also a need to reconsider the way we manage and lead our digital teams, as well as the wider business, to achieve against these demands.

In the 1970s there was a similar need to change the approach to football. With faster balls and pitches, increased professionalism and training demands, the static tactical approaches that ranged lines of offence and defence against each other had become turgid. The insight was to create a system where any player could take over the role of any other player – fluidly, autonomously and to great effect. A multitalented player would be expected to be an attacker, a midfield play-maker and a defender – seamlessly and without pause. A jack of all trades and master of most.

Central to the tactical approach of Total Football were the notions of creating space, flexibility and collaboration, founded upon rigorous and demanding training and a proactive attitude, always seeking opportunity and taking initiative.

Likewise the modern eCommerce team. For ‘creating space’ we have the need to create commercial opportunity – even amidst the mayhem and turmoil of minute-by-minute trading. Members of a Total Retail team are expected to act commercially, create opportunities, despite the pressures of daily activity.

The notion of multitalented team-members is also vital. Not only must there be an appreciation and understanding of other people’s skills, but team members must also be able to make a credible contribution in other areas. No more “I am a marketeer” or “I am a technologist” – eCommerce professionals must be both (as well as operationally savvy and commercially astute). Indeed, we created the MSc in Internet Retailing as a programme to assist the development of multi-talented leaders for our industry.

One aspect not present in the 1970s was “fan power”, or ‘customer power’. Our colleagues in store have the most intimate human contact with some customers, but across the whole business it’s the multi-touch, extensive digital contacts that give eCommerce professionals a privileged insight to the customer’s activities. With social media we have an enviable view of the customer’s attitudes and activities beyond the shopping experience in our domains. Further, considering m-commerce and mobile interaction, we’re increasingly able to gain more insight into customers’ behaviour even when they’re not “online” and explicitly shopping or researching.

Total Retail is the opportunity for us to progress from a simple injunction to ‘be more skilled and commercial’ to an approach of being more engaged with customers – at every stage of consideration, socialising, learning, buying and sharing. Being of service to a demanding, knowledgeable and social customer, at all times, places and points of attention. It’s a fully committed approach. To deliver upon this demand we need both to hone our individual skills as players, and to develop a ‘game play’ that is open, flexible and enterprising. The tenets are skills, flexibility, collaboration and creating opportunity.

This shift will be uncomfortable and demanding, even upon those who believe it to be a necessity (and an opportunity). However, it’s likely that our customers will come to expect this sooner than the majority of retailers will respond – meaning significant spoils for those who can bring sparkle to the retail game, much as the Dutch shook up football 40 years ago. Time for us all to embrace Total Retail, and we’ll return to this theme again over the coming year.

Here’ the text version of my editorial from January 2010’s Internet Retailing magazine (you can see the digital version here: https://viewer.zmags.com/publication/ec228fee#/ec228fee/1)

In this piece I’m building on a previous editorial, pondering the role of the eCommerce Director (compared with the ‘chief electricity officer’ – see this article: https://innoparticularorder.pencil.wpengine.com/2007/11/chief-electricity-officers-editorial-from-internet-retailing-magazine/). Going beyond the simple question of ‘whither ecommerce directors’ I reflect on a trend seen in the sector to move to a more pan-channel, commercial set of demands from ecommerce professionals.

As the Naughties recede and the Naughteens approach, retailers are caught in the uncomfortable transition zone – the ‘Naughtweens’, if you will. Ian Jindal ponders an appropriate bearing for retailers in these turbulent times.

The Naughties were rollercoaster years. From the exuberance of the dot com bubble, crashing in 2001 alongside the global shock of the 9/11 attach, rising from 2005 on asset-backed consumer euphoria and hitting a wall at the end of 2008 in the reverberations from the global financial crisis.

The steady growth of the ecommerce channel in 2009 signals both its maturing as a valid option in the customer’s eyes and the growing capability and professionalism of the channel within retailers. We have an increased understanding of the channel’s role: it’s an orthodoxy that cross-channel customers are worth more and that the web acts to set preferences and aid in-store purchasing. It is more than a price-led, acquisition-oriented place for wham-bam rapid conversion.

For the last decade, however, we in eCommerce have had (speak it quietly) a relatively easy time. Within established retailers we’ve been able to emulate our elders, as it were, in store and appropriate from the digital pure-players at the same time. Our stock’s been bought for us, the brand’s been created for us, the logistics and operations largely existed. Our job was to assemble these components, jam on a more or less functional web interface and sprinkle some design magic, PPC and a touch of promotional carrot. Kapow!

In 2010 the world’s much less simple. One of the traumas of the teen years is realisation that childhood’s receding while adulthood is neither as easy nor as attractive as once it seemed. This, in the Naughtweens, is where ecommerce stands. Our easy growth is not quite over, but – as a result of our success – we’re no longer marginal, precocious and separate. We have to play a full part within the multichannel business – maintaining our own contribution while contributing actively to the success of the overall business.

If our Boards and colleagues are making demands, then so too are customers. No longer willing to stick within our channels, they insist on cross-shopping (in-store collection, expanded product information in-store, extended ranges, more phone-based support and contact, evermore demanding research and information – and on top of that they want us to engage via social media and quasi-publishing activities). Our early mastery of ‘analytics’ now bites us since we’re a natural home for the onerous “single view of the customer” projects, aggregating in-store baskets with newer behavioural metrics and satisfaction measures… Our colleagues expect the same level of expertise and innovation we’ve shown over the last decade to be applied to brand engagement, customer development, supplier development, new commercial sales approaches – not to mention the KPIs, metrics and business operating models to support these changes. We are expected to lead across the whole of our business.

In parallel we need to understand and emulate the bravery and conviction of our buyers and sourcing colleagues who take risks to create trends and products for our future customers; the daring of our Estate planning colleagues who invest in new stores and centres through market turmoil; the care and skills of our front-line colleagues serving customers directly and exposed while we twiddle an algorithm in the comfort of Head Office.

In the Naughtweens we’ll see major restructuring to align the rhetoric with new cross-channel organisation. eCommerce teams will be under pressure to be multichannel and to maintain margin. Customers become more demanding, and staff demand career development beyond just ‘being in ecommerce’. Finally, there’ll be no sympathy for underperformance of our activity since our Boards increasingly see core eCommerce operations as a ‘solved problem’.

My previous Chairman’s commented to me that there’s only ever a ‘gap in the market’ for “those with sharp elbows – and the willingness to use them”. In the Naughtweens eCommerce leaders will emerge, over and above eCommerce professionals, who will establish a new place for eCommerce within multichannel retail – synthesising learning from traditional retailing while extending new skills beyond their own teams into the business as a whole. The process is certain to be difficult and no doubt unpleasant in parts, but by the time we emerge from the ‘Tweens and Teens we’ll have laid the basis for future performance.

Internet Retailing will be reporting, provoking and helping along the way, and to all of our readers (leaders, professionals, colleagues, all) we wish every success and happiness in 2010.