Over the past few weeks, online retailing has made the headlines – but not for the best reasons. This has motivated me to share outcomes from a recent industry discussion on evolving best practice in omnichannel strategy. The high-level session was spurred by retailer concern following the situation where Harvey Norman’s “Biggest Ever Sale” was compromised through pricing and customer service issues. Hundreds of consumers believed they were getting a genuine bargain when lo
unge suites were snapped up for just a few hundred dollars. Sadly for them, this turned out to be the deal that never was as the pricing offered was a mistake.
Failures in the store’s listing and validation procedures led to a catalogue of errors that would have made even the toughest retailer cringe.
While this episode has kept media channels busy, and provided great fodder for business and marketing students to analyse, savvy retailers have used the example to reassess their own systems and strategy in what has been a collective demonstration of risk management.
Uniquely, the situation brought together retail competitors and sector experts to discuss strategies that will ensure the fast-growing online market is not compromised in such a public fashion again.
The meeting of minds demonstrated two key issues. One was that New Zealand retailers should be less concerned with each other and rather focused on stemming the dollars flowing from online shoppers offshore.
The other, more pertinent issue, is the lack of truly integrated systems that enable businesses to sell as efficiently online as they do instore.
Omnichannel in NZ remains in its infancy compared to countries like the UK and US.
Online stores have been simply bolted on to existing retail infrastructure, and this lack of integration could potentially compromise emerging opportunities such as click and collect.
Discussions at the think tank centred on the huge amounts of product information retailers have now at their disposal, the complexity it creates, and how smart businesses are leveraging this information.
Structured master data (SMD) is the key foundation element of any robust omnichannel offer. This honed combination of product information, images and other unique collateral sits within a universal product code or what is known at a GTIN (global trade item number).
Overseas, almost all medium to large retailers use these systems both for external and internally-sourced products. Australasian retailers have been a little slower to adopt these practices, which in part is why internal mistakes end up in front of consumers such as the lounge suite.
Retailers that use structured master data leverage systems that test and validate price differentials ensure they sit within prescribed limits. Where discounts fall outside predetermined parameters, the listing and offer must go through more rigorous analysis.
These systems also ensure pictures, product information and pricing align to ensure authenticity, provenance and safety of listing. Retailers using this smart methodology are unlikely to be compromised to the extent this furnishing chain was compromised.
A key outcome from the collective discussion has a been a focus from retailers to adopt these global standards, which will transform content standards and quality.
Just as a good instore service is seen as fundamental to retail success, managing a customer’s online experience is equally important. Discovering mistakes and anomalies casts doubt over the wider offer and does impact goodwill.
Lessons have been learnt and, as a result, our e-commerce channels will be a better place.
One retailer’s online misfortune has been the catalyst for more cohesive thinking and action across the wider sector. It is fortunate this grey cloud has been able to deliver at least one silver lining.
-Chris Wilkinson, CEO of First Retail Group
