Omnichannel
NetSuite apparel leader talks COVID-19 impact, the need for a multi-channel retail approach
Craig Harris, segment leader and industry principal for apparel, footwear and accessories at the cloud-based business management solutions provider, offers up tips and insight on how retailers can battle back in the wake of the coronavirus pandemic.
July 31, 2020 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com
With the 'new' normal in retail taking root, retailers scrambling to lure in shoppers in a safe and healthy approach and consumers now wearing a facial mask to enter stores (and the inherent conflict taking place amongst those who don't want to wear and mask and store management), it's challenging to be a retailer to be blunt.
But oftentimes adverse situations can birth innovation and amazing progress in many ways. So Retail Customer Experience reached out to someone in the trenches, working alongside retailers as they strive to stay in business, to grow and to adapt to the fast-changing retail environment.
Craig Harris, who serves as segment leader and industry principal for the apparel, footwear and accessories team at Oracle's NetSuite, is focused on helping apparel retailers deliver a rewarding customer experience. On the front lines, he's hearing from customers and clients all the pain points and helping ease those pain points.
Q: The demise of a slew of retailers, from J.C. Penney to Pier 1, reveals some retailers are more than struggling with all the changes in the retail and consumer landscape. What went wrong and what lessons can other retailers that may be on a similar path, learn from these failing retailers?
A. Many segments of retail have been hit hard over the last several years. COVID-19 has magnified and accelerated a massive ongoing transformation in retail. These cautionary tales provide a number of lessons learned and shine light on the potholes retail brands need to avoid.
So, how do we move forward? Retailers should consider these 3-pillars: vision, planning and execution:
• Vision: Establish or reinvent your go-to-market identity. Low price and discount retail is saturated, and the costs of real estate and store operations makes this a tough business. Retail needs to focus on the value-add of in-person shopping experiences and reexamine the role of the store itself. This is vitally important with respect to pandemic reopening's.
• Planning: Retailers should be taking stock of the state of suppliers and inventory. Especially as they emerge and slowly reopen in phased approaches across the country. We're hearing many of our customers say they would rather plan conservatively around financial projections through the end of 2020 and be surprised by positive movements. In some cases, this means adjusting models multiple times a week based on actuals and what's happening around them, their customers and their suppliers each week. Plans must be deeply thought out and actionable.
• Execution: Merely repeating things as we used to do is not going to produce better results. As lights go back on in retail it is imperative to make the necessary changes in our business models to insure the long-term viability of business. We must also take steps to mitigate the potential pain of future shutdowns related to the pandemic. We don't want to struggle for six months only to have our enterprise shut down again without having addressed some of the pain points experienced in the first wave. Retail brands must act now.
Q: In light of the COVID-19 pandemic retailers have had to switch strategies, refocus and realign everything. From what you hear and see with clients, what's the biggest challenge in play and what strategies do you expect will continue long past the pandemic environment?
A. The pandemic has demonstrated the need and value of developing a multi-channel sales strategy and then ensuring the right business solutions are in place to deliver on those strategies. If all stores are closed, then e-commerce suddenly becomes the most important sales channel. If 3PL is struggling with fulfillments due to quarantines and social distancing rules, then being able to fulfill orders from closed store locations is now a critical lifeline for the business. We've seen that multi-channel brands that already had good omnichannel ship-from-store capabilities in place have fared better than their competitors who did not. They hedged their bets and made the investments to ensure they weren't all in on a single, and therefore vulnerable sales channel. Ultimately, they are able to pivot their business models.
We've seen brands like CO Bigelow Apothecaries devoting more resources to its ecommerce site, working with retail partners to extend its direct-to-consumer reach. On the other hand, brands like Dippin' Daisy Swimwear leveraged extra fabric inventory to produce 5,000 face masks a week. Using social media and promotions, mask sales have taken off and the effort has drawn more customers than ever to its website. As retailers continue to adapt to a new environment, strategies like this offer much needed promise.
For example, on our commerce platform across all channels, we've seen sales order volume increase 59% year-over-year in May with our retail industry customers, which consists of traditional retail, AFA and health and beauty brands. We're starting to see a rebound for brands as consumers shift their needs from just immediate products like food, medicine and paper goods to more regular activity we saw before COVID-19.
Taking on a new reality means retailers have to be flexible. We expect technology advancements in areas like ecommerce and omnichannel to be key areas that last long past the pandemic environment.
Q: As you interact with retail leaders all day can you share some anecdotes on how brands and retailers are excelling at changing gears and reacting on a proactive approach to meeting new customer expectations and demands.
A. A great example that comes to mind is Hammitt, a luxury handbag company. Its sales were down 75% in March so CEO, Tony Drockton recognized a direct-to-consumer strategy could drive immediate revenue and he shifted gears for the brand. The brand converted its wholesale showroom in Los Angeles into a broadcasting studio for livestreams and videos. During this time, they featured not only new handbag styles, but a diverse set of guests including boutique owners, a Bravo TV host and a chef to speak to how the coronavirus has affected them. Hammitt also launched styling appointments that proved extremely popular and continue to be in high demand. The result? A whopping 200% increase in direct-to-consumer sales year-over-year, and the brand is once again growing quickly.
Additionally, hair care product-maker T3 Micro also found itself in a difficult situation at the start of the pandemic. The Los Angeles based company relies on manufacturers in China and began experiencing supply chain interruptions at the beginning of the year. When COVID-19 made its way to the U.S., retail partners stopped placing orders which caused the brand to halt unnecessary spending, gauging the market and shifting its employees to work remote. After an initial pause, T3 Micro shifted its focus immediately to its direct-to-consumer e-commerce initiative, adding resources to develop a platform and improve engagement and branding through its site. The brand continues to ramp up direct-to-consumer efforts and pave the way for its future.
Q: Customer acquisition and customer retention are both critically important. What tips and advice do you have for retailers as they tackle both challenges?
A. A recent survey found 85% of business leaders have experienced harm to their businesses as a result of COVID-19 and returning to "normal" is still far out for many. But it's more important than ever to first know your current and future customers to reach them where they're at and where they're headed.
So how can retailers actually do this? First, focus your efforts on segments that are essential or least impacted. Pare back efforts in the areas where the customer is unable to buy right now. Much of this data is publicly available and can also be gleaned from analytics tools you might already have in place. Second, reassess how you go to market. Make sure to focus on your value as a brand and demonstrate how you're able to help and support right now.
Lastly, consider the unknown that current and potential customers feel, not just in a period of crisis, but long after 2020 is over. The more you compensate for unknowns, the better you can forecast for how your business could perform over the coming months. It is crucial to understand it is not always the time to sell so we must also be most valuable to customers outside a one-time purchase or transaction.
Make the time to lean into your mission and customer communication now, and all year round. Use this capability to delight your customers. In my own experience as a consumer, I have had markedly different experiences across brands. Some are proactive and err on the side of over-communicating to their customers. Others communicated very little, which left me wondering what was going on? Did I make a mistake in choosing the brand? But, that's the great part about retail. We get to delight our customers with every interaction. Brand excellence comes down to that simple proposition: communicate with your customers clearly and often and then exceed their expectations. This has always been the recipe for success in business and the pandemic has not changed this fundamental truth.
About Judy Mottl
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