Retail profitability is being constrained by irrelevant technology debates and an inability to extend the successful use of the Internet to transform sales effectiveness to other areas of the business, argues Tristan Rogers, managing director, Concrete Group.
Retailers may have achieved a significant financial boost from the online sales model but they are patently failing to leverage the Internet in any other areas of the business.
Organisations are maximising the Internet’s low cost per transaction, streamlining operations and the ability to offer customers a far broader product range to significantly boost both sales and customer value.
So, having seen what the Internet can do for the sales model, why are these organisations failing to apply the same principles to the rest of the business?
The web-based approach offers huge opportunities to transform business processes, such as merchandise management, marketing distribution even stock ordering.
For any organisation with disparate geographic users, the web is an obvious solution. Why struggle with re-entering information or orders received via fax, email or telephone when a web-based solution automatically stores and reconciles the same information in a database, creating a full audit trail in the process?
Just as the consumer uses the online store to compare offers, make selections, and undertake payment, why not provide store managers with online access to merchandise information, with pictures of racks, mannequins and in store promotional material?
Not only are orders then automatically reconciled with the core system but transaction level data provides unprecedented information into trends in ordering and supplier performance that can drive ongoing business strategy.
Increasingly, such strategies embrace international expansion – often via franchise. Yet for any business operating globally the problems created by poor processes are legion.
Despite spending £millions on above the line marketing campaigns, too often international franchises end up moving logos, changing colours and fundamentally undermining brand consistency.
Furthermore, poor merchandise management adds significant cost to the distribution of racks, mannequins and other in store materials.
Replacing tortuous manual processes with an online ordering system transforms the cost model, ensures brand consistency and critically, gives stores access to the right goods at the right time.
The stores then benefit from real-time, online access to excellent pictures of merchandise as well as information on possible delivery dates and forthcoming products.
Critically, the web-based model is inherently scalable, enabling additional functionality or business areas to be rapidly embraced.
Indeed for one drinks manufacturer the use of a web-based solution for global merchandising has been so successful, it is adopting the same model – indeed using the same technology – for the sale of its core product.
Leveraging the same underlying web technology enables the organisation to switch on a solution that will fundamentally transform business efficiency within weeks.
Taken to its logical conclusion, this approach can change the entire business.
It enables totally integrated processes from initial product conception, through collaboration with manufacturers, pre-sales to global franchises, marketing and end sale to the consumer.
By utilising an existing, proven infrastructure, organisations can rapidly turn on new functionality to support the business without incurring the extended development and implementation phases that have dogged traditional IT deployments.
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