We recently attended the Future Stores event in Seattle where we had the pleasure of hosting a roundtable session with 40 retailers spanning several industries. We posed three questions: What is driving animosity between store and digital channels; what makes creating a unified commerce experience so difficult; and, if you could go back 10 years, what would you tell your future self?
What do you think still drives animosity between store and digital channels?
Associate (store employee) compensation and attribution was the overwhelming and immediate reason retailers said a wedge exists between channels. One retailer summed it up by sharing that their store associates actually hide when they see a customer walk in with an online package, so they don’t have to take a hit on an in-store return.
Each retailer has their own unique challenges, so there’s no silver bullet for solving the issue of associate compensation for cross channel transactions. However, several retailers found success through various methods of addressing not only associate compensation but also an organizational understanding of unified commerce experiences including:
- Enable stores to resell merchandise returned to them from an online purchase
- Tie online purchases to stores by applying regions and/or zip codes to digital sales
- Base compensation on the result of the total business vs. a single channel
- Share omnichannel demand metrics with store associates to drive ownership and awareness of the store’s impact on the larger organization
It is clear that unless everyone in the organization, especially associates who are the face of your brand, are onboard for your omnichannel vision, success will be hard be elusive, at best.
What makes creating unified commerce experiences difficult?
Unified commerce is a complex enough endeavor that there is not one (or three or four) reasons to explain its difficulty. The challenges span technology and the organization.
Retailers are finding it difficult to overhaul legacy systems in which they have invested years, and untold dollars, building. At the same time, established retailers with legacy systems are being challenged by new and nimble competitors just entering the market or expanding their footprint.
Retailers are operating in a time where business needs seem to be at odds with each other. For example, retailers say that associates are key to the success of unified commerce, but at the same time these retailers are facing declining foot traffic in stores and increasing labor costs. It boils down to the fact that creating unified commerce experiences isn’t easy. If it were, retailers would have already done it. Moving forward, retailers need to focus on their target customers, reflect on the brand experiences they are providing, and streamline operations to become more flexible.
At the Salesforce XChange conference in May, two brands, Kiehl’s and Oasis, shared their experiences implementing some elements of unified commerce. It’s an eye-opening, honest, and helpful to other retailers looking to do the same.
If you could go back 10 years what would you tell yourself/organization?
“If we only knew then what we know now.”
It’s something we can all relate to. Retailers at the roundtable sounded a strikingly common theme – unification. If they could go back ten years, they’d:
- Create a central data source. Why? Because data (particularly making use of reams of customer data) is a major source of competitive advantage.
- Cross-pollinate teams to avoid creating silos with competing agendas
- Use one P&L to drive the business
- Realize that it’s about your brand winning – not a single channel
- Invest in business intelligence earlier
However, it seems that few retailers are taking their own advice. While they know the direction they want to go, taking that first step has proven to be difficult.
Having the chance to hear retailers from across industries discuss their insights on creating unified commerce experiences was incredibly enlightening and produced several key takeaways:
- Your organization must be aligned, from top to bottom, according to your organizational goals
- The impact of delivering unified commerce experiences changes based on your time in the market, and requires not only technology but also operational changes
- Don’t allow the fear of shifting future shopping preferences paralyze your progress towards transformation today