By Paula Rosenblum
Having a website is imperative for every retailer, including independent brick & mortars. At minimum, potential customers should be able to find you through a search, get a sense of who you are and what type of merchandise you carry, and find your locations and hours. For many there is also additional money to be made in selling products online. By looking at how the best performing retailers manage business operations, and how those operations are supported by technology, retailers can incorporate online sales smoothly and profitably into their business plans. According to an ecommerce benchmark study from RSR Research, the following are key points for retailers to consider when venturing into ecommerce.
Digital channels
Amazon.com’s march towards market dominance is forcing retailers to differentiate their digital presence. Uncertain consumer demand remains a huge challenge, as merchants of all sizes struggle to grasp the way different customer segments prefer to interact with them. Operationally, retailers are focused on finding more cost-effective ways to fulfill and deliver orders placed through digital channels. These channels have both unique challenges and opportunities. One important area of focus is improving search and browse capabilities. Shoppers must be able to find your website easily, and once there, need simple and intuitive capabilities to look for the product of their choice. In addition, the technology infrastructure used to drive the web should be moved into your store. More than three-quarters of RSR Research study respondents either have or are planning to use their ecommerce platform as a mobile platform, and more than half can envision a time when their ecommerce platform is also their point of sale tool.
Organizational inhibitors
Lack of budget can be a roadblock to retailers’ ecommerce initiatives. In 2012, 38 percent of RSR Research study respondents cited capital expenditure constraints as a top-three inhibitor to moving forward with ecommerce initiatives, while in 2013 that number rose to 63 percent. Getting internal IT resources allocated has also risen as a concern. Retailers’ best option could be simplifying their infrastructure.
Specific technology enablers
RSR frequently looks at the difference between “Retail Winners”—those whose comparable year over year sales outpace inflation—and their peers. In the area of technology, the difference between Winners and lagging retailers in the perceived value of new ecommerce technologies is stark. Retail Winners believe user-generated reviews and recommendations are the most valuable technologies they could add to their websites. Next are product-level social network integration, and retailer generated reviews and recommendations. Of those surveyed, 60 percent have added user-generated content to their websites already, and two-thirds have implemented call center and CRM solutions.
RSR’s recent research left many takeaways for the independent retailer, the most important of which may be the notion of a single streamlined technology platform. The last thing an independent retailer needs is to think about updates to multiple systems from different sources. The need for technology is inescapable. Today there are many creative ways to finance technology implementations, including the old standby of leasing coupled with cloud-based or hosted solutions.
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Paula Rosenblum, managing partner of Retail Systems Research, is widely recognized as one of the top analysts in the retail industry. She formerly served as VP of Research & Content at Retail Systems Alert Group (RSAG), and as VP of Aberdeen Group’s Retail Research practice. Rosenblum was also retail research director for AMR Research. She spent over 20 years as a retail technology executive and CIO, and received her MBA in 1991 from Northeastern University, with a major in management of high technology firms.