What multi-channel experts are doing

Jason Rommer, London-based Head of Consumer Markets at Penna Interim Executive, shares his guidance based on the movers and shakers in the multi-channel world.

Interview by Suzie Larcombe

In this article, you’ll find out:

• What issues are multi-channel businesses facing?
• How major players are over-coming obstacles and acting on opportunities

Which sectors do you work with Jason?

I run Penna’s Consumer Markets Executive Interim business, appointing senior-level Interim Managers into the Retail, FMCG and Online markets.

What size of businesses do you encounter?

As one of the UK’s leading Interim Providers, Penna regularly supplies Interim Executives into a broad array of clients, from FTSE 50 organisations to SMEs and Start-Ups.

Why are retailers moving to the  multi-channel?

In today’s challenging and rapidly evolving retail market, a compelling multi-channel proposition is, in most cases, an absolute necessity for retailers. Consumer’s habits have evolved and as shoppers utilise an array of channels to engage and transact with retailers, they demand convenience, product insight, value for money and first-class customer service.

Retailers who can offer this consistently across any channel are in a very strong position to win market share in a highly competitive retail environment.

In the main, for the major players in retailing, it is no longer enough just to have a website.

Retailers are constantly identifying new “channels” to fulfil customer needs and as technologies and expectations have evolved, identifying and implementing innovative ways for consumers to make their purchases and receive their goods has been a major priority.

Click and Collect, Mobile Retailing, In-store Ordering as well as an array of other initiatives are constantly being developed and rolled out by retailers.

Whilst for the major multiples the focus is joining up numerous channels to create a holistic solution, SMEs and independent business have an altogether different agenda.

In many cases, the priorities for these players is to create a suitable online capability, supported by an SEO and customer acquisition plan to ensure they are getting in front of and engaging with the right customers. If transacting online for the first time, it is vital to provide a first-class customer experience to ensure customers will return, so getting the support and fulfilment infrastructure right is key.

What sort of financial investments do your clients typically make?

This is entirely dependent on the nature and scale of the business. Any retailer, whether an independent specialist or a major multiple will have a different agenda and strategy for their multichannel capability and this in turn will dictate the appropriate level of investment required.

Some of the major players, including Home Retail Group and Morrisons are openly investing £100s of millions in upgrading infrastructure to support an integrated Multichannel plan, whereas an independent may only need to invest a few thousand in building and maintaining a transactional site.

What are the typical profit/turnover outcomes that you hear of?

Again, this is a difficult question to answer as this varies enormously from company to company but having a fully functional multichannel capability should not be underestimated. Home Retail Group for example, now see’s their multichannel sales accounting for over 50% of their annual turnover whilst John Lewis are exceeding £1bn annual sales online.

SMEs see digital channels as a crucial tool in breaking into new markets and significantly improving exposure amongst their customer base.

What are the difficulties you hear most often from businesses dipping their toe in the multi-channel for the first time?

I think delivering a consistently high level of customer service and ensuring hassle free delivery and returns are always a challenge for retailers looking at multiple channels.

Margins are tight as it is but to then offer delivery solutions and free returns can chip away at this even further so I believe one of the real difficulties retailers are facing is around making these routes to market profitable. Clearly having a brinks and mortar business also incurs significant costs so balancing the store estate so ensure the right sized network is also a major consideration for retailers.

What have they done to overcome these difficulties?

More and more retailers are making some tough decisions about their retail estates, making significant reductions in store numbers as an increasing proposition of sales migrate to multichannel, freeing up cash for investment in inventory and multichannel infrastructure.

What are the three main pieces of advice you’d give to someone starting out right now based on your privileged view?

Before launching, know that transactions conducted through these new channels will be fulfilled efficiently and you can provide a high level of service from the outset. Consumers won’t return if it was not a seamless transaction first time round.

Invest in getting it right first time. A little extra expense upfront can be the difference between success and failure and cutting corners in the beginning can cost you customers and sales in the long run.

Have the right team in place to lead and deliver this business-critical agenda. Quite often the skills to set up and launch a multichannel capability are hard to find internally so a first-rate Interim Manager can be worth their weight in gold in getting the right propositions designed, built and implemented.

For more, check out www.penna.com