Sunday, 21 July 2013

From Buying to Trying

In my last post - from McJobs to iJobs - I considered one possible organisational impact that Multichannel could have on "traditional" retailers: the upgrading of roles at the point-of-sale. Of course this will have wider consequences: staff performing more complex roles need to be managed in more sophisticated, and probably less top-down process-driven, ways.

This has led me to consider where else in the organisation this increase in role-complexity might hit hardest, and I'll be looking at a few of these in my next few posts. For the first of these, I want to consider the opposite end of the product-lifecycle in a retailer: Buying.

As Amazon puts it "we... focus on selection, price and convenience". Most multichannel retailers, in fact, attempt to offer a much wider range of products online than they do in stores; "thin" categories, which might work as end-of-aisle or next-to-POS takeaways in a store environment, just don't cut it online. Customers expect "total" ranges where they can browse a complete selection.

Suddenly the poor Buyer needs to buy 3 times the previous range of products.

To make matters worse, top-sellers in store could be very low price-point articles. And these aren't going to work online, because of shipping charges, unless they can be sold as add-ons. The required range profile is typically slightly different.

The Buying organisation faces a dilemma: each category buying team now has to buy more articles. So is the best way to do this to create two teams, one buying for store-only (or core articles for both channels) and one buying for the online range only? Or is the best approach just to make the job more complex? What you definitely can't do is stand still...

In practice for a true Multichannel retailer (as distinct from a Multiple channel retailer), the answer is best summed up in a quote from Philip Clarke at Tesco:
"As we look forward, I think our larger stores will have a bit more food space, a bit less general merchandise space, and a bit more clothing space."
In other words, range planning has to be a multichannel process. Inevitably that means a more complex process. And in turn, that means more complex roles.
More complexity buying the assortment, more complexity selling the assortment. The obvious question is what about in the in-between processes, and that's what I will look at in my next post.


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