Multichannel Commerce: Retailers have to reorganise themselves
Interview with Dr. Bernhard Blüthner, Managing Partner, SALT Solutions GmbH
Dr. Bernhard Blüthner: "Product assortments, pricing, inventory, customer accounts – all of these need to be coordinated and real-time capable across all distribution channels."
Established retailers have a tough time developing a suitable multichannel strategy. Mature organizational structures and IT environments that have stood the test of time often stand in the way today. EuroCIS.com speaks with Dr. Bernhard Blüthner, Managing Partner for SALT Solutions, about the need for companies to newly organize.
Dr. Blüthner, the multichannel buzzword has kept the industry sector on its toes for more than five years. Yet for all that, the number of successful examples can be counted on one hand. Why is that?
Causing quite a stir are primarily startups that have geared their internal organization, their processes and IT towards multichannel commerce from the beginning. The big companies are just now slowly catching up. On the one hand, this is due to inertia that inevitably characterizes the decision-making processes in mature units: decisions are being deliberated for a longer time; numerous stakeholders are involved in the implementation – oftentimes with diverging interests.
On the other hand, the existing application landscapes cannot be converted into multichannel commerce with the snap of a finger. Some technologies and systems have stood the test of time for many years and are suddenly supposed to no longer be enough to meet the demands of multichannel commerce? This discovery is only slowly being accepted.
How can established retail companies respond to this?
One example we keep coming across with retailers is the organizational separation between the online store and the brick-and-mortar business. They are set up as individual companies with their own management and separate IT systems. Naturally, these separate entities pursue their own goals apart from each other and focus on different measures in doing so.
However, this is not how multichannel commerce becomes successful. When retailers offer their customers click & collect service for instance, that being the opportunity to pick up an online order at the actual store, the processes between the online store and floor management need to be harmonized with each other. Product assortments, pricing, inventory, customer accounts – all of these need to be coordinated and real-time capable across all distribution channels.
It is imperative for the management level to provide the foundations of a multichannel strategy – this task must not be delegated into the divisions. This results in new forms of organization that don’t have any “best practices“ yet.
What might these types of decision-making processes look like in detail?
Multichannel is not just limited to the operational and organizational structure. The key is that everything is being automated. The role of IT is underestimated in this regard, and it is often integrated far too late. Linking all channels requires the constant involvement of IT in organization and service to stay on top of things in the back-end as well as the front-end.
When it comes to detailed organization, companies should not chase any hype, but initially determine exactly what fits their corporate philosophy as well as their target group. There needs to be an actual benefit for the consumer, if you would like to promote customer loyalty and attract new clientele.
From your point of view, what cornerstones need to support a multichannel strategy?
Pure players are almost unrivaled when it comes to providing fast delivery with free shipping. What’s essential here are additional services with a true benefit for the customer. Consumers do not distinguish between the online and brick-and-mortar store of a brand: all things that are possible online should also be offered in the store and vice versa. The subject of payment can be what tips the scales in a company’s favor. With it, customers are free to use their preferred payment method – and the associates at the store or in customer service always have an overview of open and paid invoices. Multichannel commerce is not an end in itself; you need to be able to manage the necessary investments!