This article appeared in November 2008’s edition of Internet Retailing Magazine.
After the buzz and positive atmosphere at the InternetRetailing 2008 Conference, Ian Jindal considers the role of ecommerce in a hostile and uncertain period for retailers: can etail’s star shine undimmed?
There’s a stunned and bruised feeling in retail. Not so much as a result of the downturn/recession/depression (delete according to pessimism) but at the effect of the unintended consequences.
The speed and extent of the seizure of short-term lending markets has caused significant trouble to businesses who depend upon flexible working capital: growing businesses, seasonal businesses, leveraged businesses with liquidity covenants and suppliers whose working capital needs to be with retailers are all suffering. The amplified impact of retail and manufacturing workers losing confidence, buying power or even jobs will be, for the retail sector, like hitting a wall.
In retail Boardrooms across the land, all eyes are now on eCommerce. While offline like-for-like performance is down across sectors, eCommerce is still growing or at least ‘holding up’. As drowning men cleave to passing logs, so do CEOs view the online channel as an opportunity to save the financial year. Many in eCommerce, myself included, remember the nuclear winter of 2001-3: the question is what lessons have we learned and do we have the strength to apply them?
The key lesson is that this is a time for brave people to be ruthless and focused. In a rising market there’s always a “mañana” in which to implement gentlemanly improvements in segmentation, stock control, processes, addressing margin… However, there is no “tomorrow”. I know that Christmas is busy, but we must all fear that January post-sale will be even tougher. Putting off decisive action until December 31st is folly.
While each business is different, in general we can concentrate upon pace, focus, agility and responsiveness – attributes that should be a fundamental part of ecommerce.
Pace is vital since we need to trade our sites daily, not weekly or monthly. Learn lessons quickly and implement immediately. This is no time for a ‘to do’ list – you need a ‘just done’ list!
Focus must be upon customer-facing activity – help them part with their cash. Simplicity is a function of this: in merchandising, marketing and projects.
Agility is needed to move quickly and with confidence: make the changes now, not next week!
Responsiveness should be to the customer or emergent opportunities. The origin of the word ‘retail’ is from the French word “retailler” or ‘re-tailor’ – creating something anew for each customer, focused on serving them. The web’s ability to segment, personalise, algorithmically optimise and merchandise should come to the fore. Now, today – not tomorrow.
These are simple requirements, but take backbone to implement. Wibbling, waffling and waiting should be reserved for those on the sidelines.
Even with this bold, brave approach we etailers are dependent upon our colleagues in logistics for service levels, buying and merchandising to have the right goods to sell and our stores and contact centres for cross-channel leverage. The temptation is to try and forge ahead online but now more than ever is the time to work closely with colleagues to burnish a consistent service to customers across all channels. While your colleagues see ecommerce as an opportunity to rescue trading performance you have an opening to cement cross-channel working… not to show that you’re separatist, selfish and narrowly focused!
eCommerce continues to perform well, and it’s said that stars shine more brightly against a dark sky. However, our aim cannot be simply to be valued in comparison with the decline of others. eCommerce professionals have an opportunity in the coming months to demonstrate a robust and agile commercialism and to lift the whole business by customer focus, modern inclusive working practices and delivering the multichannel leverage of which we speak so often.
In these dark times it takes bravery to be brilliant and simplicity to sparkle. eCommerce should be a constellation, not a lone star: this Christmas, don’t twinkle alone.