The Big Opportunity: Connecting e-Marketing, Retail Analytics and Merchandising
By Sarah E Taylor-Oracle on Sep 05, 2011
Guest post by Willy Rotstein from Oracle Retail - click here to email Willy for more information.
Providing a great cross-channel experience is of course one of the key challenges retailers face today. It is easier said than done though. A good example of these challenges is the integration of the world of e-marketing (i.e. attracting people to your website/store) and merchandising (i.e. what you buy/hold and offer to your customers). In my line of business I get to meet and talk with many of the largest retailers in Europe. Over the last few months I have been trying to understand how well (or how badly) they communicate across their traditional brick and mortar and their e-commerce operation. For example, if talking with the head of merchandising I would ask:
How often do you talk with the head of e-commerce?;
Do you leverage any of the data coming from user navigation on the site to make merchandising decisions?
How does purchasing behaviour on the site influence your buying/allocation decisions?
How are e-marketing/SEO campaigns coordinated with your merchandising decisions?
A typical answer to the first question would be “One hour every week or two”. For the rest of the questions I mostly hit blanks. The picture is of course very similar when talking with the e-commerce side of the business. Reality is that, in today’s retailers, very little data flows between the e-commerce and brick & mortar sections of the business. Silo operation is mostly the name of the game.
This is a pity since, as I have discussed in previous blogs, the potential synergies between merchandising decisions and e-commerce operations are huge. The sketch I have produced below is a good illustration of how data from the web-channel offers a complete new set of information for retailers. I will leave more on this discussion for another day though.
Today I will focus on the data flows in the opposite direction: how merchandising data can influence e-marketing and the website user experience strategies. In this context I was very interested to meet recently with Fredrik Holmen, co-founder of Keybroker (http://www.keybroker.com). Keybroker is an innovative search marketing company started in Stockholm and now operating across Europe. One of their areas of focus is to increase conversion rates and product sales in the web through better management of pay-per-click campaigns. However what grabbed my attention are the ideas they are pushing to ensure that merchandising data (such as prices or inventory) is considered while executing these campaigns. For example, you may want to avoid pushing a product (in response to a Google search) if you know the product is not in stock. This provides a much better experience for your customers (and avoids paying for a click that will not generate a transaction). Or similarly, you may want to push an alternative product (as a response to the search) if you know you cannot offer the product they are looking for at a competitive price. These are two good examples of bringing the web marketing and merchandising world much closer together.
Another example is what can be done once you are on the site. As I have discussed with my ATG colleagues it starts simple, with ensuring your product recommendation engine takes into consideration inventory availability to only recommend products you have in stock. However, once you have done this you can start considering how inventory and pricing data can influence your internal product searches and navigation within the site (which in turn can be influenced by how you got to the site in the first place). Like in a shop, inventory availability and price competitiveness are key aspects of ensuring a good customer web experience. Unlike in a shop, here you have the ability to hide and/or provide substitute products as well as an adequate message when you don’t have these products in stock.
The examples above are very consistent with the main advice Bill Bass (President of Charming Shoppes) provided in a recent blog (http://t.co/Zse6cDV): “Good search quick checkout”. Such a satisfying experience can only be delivered if you start improving the data flow between e-commerce and traditional retail merchandising.
We are only just starting to learn the potential synergies that are available across the channels. It is clear to me though that the way you attract customers into your site, where they come from and what you offer them once they are there will hugely benefit from data existing today in the back office of your business. Moreover, the lessons from how people reach and navigate the site could be valuable to decide what to buy and which stores to send it to. I expect we’ll see significant change and experiments in the next few years on how these data flows take place and are exploited.
As always, I would love to hear your opinion as well.