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E-Commerce Strategy Transcends Channels

Online commerce connects the digital and physical worlds. Understanding and implementing the right technology tools and strategies builds customer loyalty and drives sales across all channels. The future belongs to the retailers that are best able to provide a seamless cross channel experience to their customers.

More than 200 retail executives gathered recently at Oracle Retail CrossTalk to compare notes on vital retail topics, from merchandising and planning to global expansion. It quickly became clear that the issue most retailers are focused on right now is enabling better cross-channel experiences.

The growth in online sales is contributing to retailers’ sense of urgency to implement winning cross-channel strategies. Kohls reported at the end of the first quarter of 2011 that web sales were up more than 4%, while store sales increased approximately 1%. Neiman Marcus reported online sales up more than 12%, while in-store sales only rose about 6%.  Best Buy reported in June that its domestic online sales continue to grow at double-digit rates and the company expects to double its U.S. online business in the next 3 to 5 years. Beyond growing e-Commerce sales, the influence of the web extends to virtually every other aspect of retail operations. Forrester Research reports that 53% retail sales in 2010 were influenced by the web.

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Retailers are moving quickly to better understand how the web influences overall sales and customer loyalty, and they are working to develop a platform for cross-channel retailing.  Often, retailers begin by integrating marketing and merchandising across channels, using digital coupons, geo fencing (drawing a line around the store and sending promos to customers when they’re near the store), and loyalty cards. They put apps in place to equip consumers with smart phone buying options. They provide staff with mobile devices for line busting, clienteling and alternative payment schemes. 

Differentiating The Shopping Experience

In the ultra-competitive electronics marketplace, Best Buy uses online and mobile channels to differentiate the shopping experience. BestBuy.com sees 1.4 billion customer visits annually and CEO Brian Dunn says 60% of store sales in the U.S. are influenced by the customer’s experience on the web site. To capitalize on this, Best Buy enhances the web experience by creating numerous points of access for the customer. The company enables consumers to interact and create feedback in store, online and over the phone, including mobile apps, and social media. During a keynote presentation at CrossTalk, John Thompson, senior vice president and general manager of BestBuy.com, advised retailers to focus on the platform, not the end points. The platform should enable retailers to understand customer demand and deliver the right product when and where the customer wants it.  “If you get the platform right,” he said, “you can extend it anywhere.”

Social media continues to be a game-changer because retailers are one voice among many. Friends, relatives, trusted experts, journalists and bloggers influence today’s shoppers. Mobile technology has only accelerated this trend. It has eliminated information asymmetries from the shopping experience. As more consumers turn to social channels for input on buying decisions, merchants must maintain a presence on social sites as well. Retailers use these sites to listen to customer merchandising input (a giant focus group), identify influencers and target them more scientifically. JCPenney and Wet Seal are among those investing aggressively in social media and reporting a direct correlation in increased sales. 

Facebook, reigning king of social media sites, cultivates customer loyalty and delivers customer input back to the retailer, helping to inform merchants on social engagement strategies, loyalty activities, merchandising strategies and in-store assortment decisions. These interactions are being extended to enable customers to buy product. JCPenney has become the first leading U.S. retailer to launch online shopping via its Facebook page. Customers can browse the company’s Facebook site for selected inventory and categories, and then make purchases without leaving the site. Users can post comments and recommendations to other friends on Facebook’s network.

Wet Seal combines social media and user-generated merchandise content so customers can create virtual outfits from the retailer’s products. The company’s social initiatives give Wet Seal products exposure to the wider Facebook community and generate valuable merchandising information that trickles down to the store level. In less than two years, users have generated more than 50,000 outfits and generated about 20% of the revenue at Wetseal.com

So, where can retailers go for help navigating the next step in their commerce experience? Groups like the Association of Retail Technology Standards (ARTS) are spearheading the development of a commerce blueprint for retailers. By incorporating the best practices and innovations from industry vendors, retailers, analysts and standards organizations, ARTS can provide guidance to retailers on how to take advantage of commerce to drive growth.


Kelly O’Neill, product strategy director for Oracle-ATG, leads product strategy for Oracle Retail commerce solutions. Prior to joining Oracle through the company’s acquisition of ATG Commerce, Kelly directed product marketing for ATG and provided marketing strategy and services to retailers and other consumer companies.

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