“Have a plan”

What is the first advice you give to a big-box retailer who wants to transform his business into an omni-channel model? Have a plan that recognises your own market circumstances and brand strength and size, even if the plan is an active decision to wait (a ‘lag’ rather than ‘lead’ strategy) for your market to become more omni-channel before you make large-scale investments. As a minimum ensure: The plan influences all your new store decisions (such as the size and purpose of any future stores) and IT investments (aim to get a ‘single view’ of the customer regardless of channel). You take a challenging approach to all new store acquisitions, lease renewals and revamps. The role of the store is likely to change significantly and the fixed costs associated with stores could become a drag on overall profitability if more of your business moves to direct delivery via internet orders. You understand the economics of shifting your business to more omni-channel (eg, the split of costs between fixed and variable will change, and there will be the additional costs of omni-channel services such as click & collect as well). Plan for a more integrated business...it’s not just another channel that you bolt on separately. What are the biggest mistakes made by retailers who want to become omni-channel players? There are a number of mistakes that are quite understandable and also fairly common: Setting up the internet channel as separate from the stores channel so the two parts of the business have a tendency to ‘compete’ with each other; omni-channel retailers measure and reward sales across channels, eg, they allocate internet sales to the nearest store so that store staff are happy to provide great advice and service even if they know the customer wants to purchase online. Underestimating the threat from the internet because its adoption in the DIY retail sector has been slow so far. Watch out for the twin threat from the likes of Amazon (big, cross-category retailer, growing fast in DIY) and the small, nimble and low-cost pure-play specialists. If nothing else the internet will put pressure on your prices even if the timing of this will vary by country. Underestimating the importance of online as a shop window – with customers showing an increasing tendency to research products online before visiting a store, it’s vital that the retailer’s website supports customers in deciding what products are right for them. Why are the home improvement retailers so late in…