Merging Brick and Mortar with Ecommerce: Getting Rid of Silos

Abnesh Raina
April 15, 2014

A Conversation with Mike Jones, PlumSlice SVP for Strategic Partnerships (Part 2)

 

Q.  Given your experience in coordinating multi-functional tasks in organizations, what are key internal challenges you’re seeing today in ecommerce?

A.  Many retail organizations continue to operate in silos; the online business is separate from their brick and mortar operation.  The inefficiency and redundancy is even more evident as ecommerce moves to support the omnichannel environment.  Instead of one cook for each stew there may be three or four cooks.  It’s a recipe, if you will, for slow or lost sales.

 

Q.  With ecommerce and online shopping established for some time, why has the siloed approach continued?

A.  Retailers in the early stages of ecommerce weren’t sure online shopping would work so they kept things siloed as a form of insurance.  Now, as ecommerce has become much more complex with the emergence of many shopping channels, it’s become more of a task to create a new, merged organization.  There are turf wars as to who owns the product, who gets credit for the sale.   This is counter-productive, of course, but not easy to change since you are also changing corporate culture.

 

Q.  What organizational areas suffer the most from the siloed approach?

A.  Product management is one area.  You will see, even in Tier 1 retailers, separate product files for the same goods sold online and in physical stores.  Merchandising, inventory, product information, including one price   – all these need to merge so that you have one view of a product. 

 

Q.  Where does a retailer start to accomplish this new merged approach?

A.  CEOs and COOs have to drive this level of change, and some retailers are making progress.  The executives set clearly defined roles for responsibility in each function during the centralization process.  We’re seeing this evolution work successfully in functions such as marketing, buying, product information and product development, inventory management and supply chain management. 

 

Q.  Let’s examine the advantages of centralization from the customer perspective.  How does it help marketing and closing the sale?

A.  Customers shop everywhere these days so inventory management   systems, for example, have to be smart enough to know where a specific product is in the supply chain.  By having one central data point, one physical inventory, you can effectively serve the customer regardless of what channel they’re shopping in at that moment. 

 

Q.  What else can retailers do to better serve the omnichannel shopper?

A.  A critical area is product information management.  When you have a merged operation, you can do a much better job of connecting the dots between product availability, pricing and messaging.  Customers expect the same information about a product whether they’re standing in the aisle or sitting at a café using a mobile device.   Having ‘one source of truth’ for each product, one data point, is the answer and it can be achieved with a centralized product information platform.

 

Q.  Are retailers starting to respond more to the needs of the omnichannel shopper?

A.  Not completely.  Some are still looking at separate sales channels rather than approaching merchandising and marketing from the customer’s point of view.  Interestingly, retailers that began as online merchants are now moving into brick and mortar stores.  There are a few good examples.  They have the advantage in channel integration since they began online and already have a centralized inventory operation.  This new breed of retailer will be competing with traditional brick and mortar retailers so it’s a good time for established retailers to be thinking of how to better connect with the customer.


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