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1. Multi Channel Retail Thinking 2. Project Management Thinking Rob Stone, Principal 11 th April 2006.

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1 1. Multi Channel Retail Thinking 2. Project Management Thinking Rob Stone, Principal 11 th April 2006

2 What is Multi Channel Retail (MCR) Charteris defines MCR as: One view of the customer One supply chain One service policy One assortment/product range across multiple channels

3 Background Difficult retail environment Internet shopping maturing Retailers’ upgrading websites Industry view is that successful retailers providing integrated shopping More customer information available Technology costs falling Mail Order and E-commerce account for 11% of total retail sales Record Numbers via Web and TV Shopping ICD Oct 05

4 The Survey - Who we spoke to Turnover above £200 million 40 blue chip, high street retailers Senior Board, Middle Management Anonymous Questioned about Multi Channel Retailing

5 Channel Penetration

6 Key Findings ♦ The most admired retailers were perceived to have their full range of products and services across all channels ♦ Retailers still focussed on battling for transactions rather than winning the war for life time value ♦ Key issue – channels managed separately and often at too low a level ♦ Level of service inconsistent across the channels ♦ Lack of integration is causing significant “leakage” Multi Channel Retailers Best – Argos & Next

7 Key Findings ♦ Expansion Areas ♦ into m-commerce (30%) ♦ in-store kiosks (18%) ♦ and digital TV (15%) ♦ Most admired multi channel model ♦ Argos… large range available ♦ Tesco… strong brand ♦ Amazon… dominant on web

8 What does it all mean? 4 key areas Responsibility & Strategy Cultural Change Customer & Brand Supply Chain That if addressed will increase customer base. These changes will be driven by significant reduction in the cost of Technology

9 Responsibility & Strategy The Multi Channel Retailer Test: Q1 Who is responsible for sales through all your channels? Q2 Who champions the customer? Q3 Is that person on the Board? Q4 Can they set agendas for Technology, Logistics, Customer Service, Product Assortment and developing new customer services? Q5 Have they summarised the vision for MCR in the organisation and communicated it to all levels? Q6 Can you see the MCR plan for 3 months, 6 months 3 years and 5 years? Q7 What are the published KPI’s for MCR How many would you score?

10 Cultural Change Does everyone understand what retailing will look like in 3, 5 and 10 years time? If selling to a customer is made up of many touch points who gets the credit? Do senior managers really understand the recent technology changes and what it means to retailing? Do buyer, managers, merchandisers, stock handlers, sales assistants, store designers, customer service assistants and directors know what will need to changes about their job for MCR?

11 Customer & Brand “We have a strong information flow within each channel silo, rather than across them” “ it’s difficult to manage consistency across the different channels” “lifetime value measurement is a key criterion that we’ve started to develop within channels” Who champions the customers? How do your customers see your channels? Do you want to drive sales to the shop or on line? Which is more cost effective for your retail operation? Do you treat the same customer in different ways in different channels - price? Do you have a 360 view of the customers wants and needs?

12 Supply Chain - A Customers View Can I get my goods when and where I want them – in store or delivered? How come you have run out of stock in store and why didn’t you offer me a delivery from the web stock? If my product is faulty can I take it back to a store or send it back by post? Is it the same price on line as in store and if not why should I pay more in store? Can I order it in store and have it delivered direct. Can I order on line a collect it on Saturday when I am shopping? Can I have timed delivery slots? Since May 2005 Woolworth has allowed customers to buy over 300,000 products for home delivery via its 824 stores EPoS

13 The New Shopping Landscape Retailing faces the convergence of influences which are dramatically altering the landscape: impact of change 24x7 culture reducing cost of IT PC + broadband penetration e-commerce changing consumers’ behaviour new retail formats new channels (iTV) new channel specialists (ebay, Amazon) Specialist /mass market polarisation no barriers from cost or age The new shopper

14 Birth of the New Shopper Behaviour polarisation: loyal to strong brands, disloyal to weak Technically savvy, literate and competent with IT All ages All socio-economic groups Sophisticated comparison shoppers Speed of availability and delivery increasingly crucial: “I want it now!” Has eBay saved the Post Office? Not a slave to a channel – ingenious users of channels for their advantage Convenience and certainty

15 Need for a New Retailer Offer reasons for customers to come back Consistency across channels of: range price expert service Mass market vs niche – which playing field? Single view of customer Weak brands won’t survive

16 Multi-Channel Retailing Journey

17 Project Management Thinking Christmas Present? Planning Requirements Gathering Tracking and Control Look and Feel Go-Live Migration

18 Christmas Present? Business focus on 12 weeks to early January 50% revenue in Q4. 25% in December Business drives a September / October launch Still require stabilisation period Still require business involvement Still require Christmas Change Freeze Initial Project Sign-off Mid Q1 after January rush over Business readiness ITT / Review responses

19 Planning Software development or Change programme? Always listen to the team pessimist Treat all channels alike Web / Call Centre / Mail Order Common catalogue Customer-centric view More marketing involvement = More time Customer Conversion / Retention Website tagging Pricing feeds Performance / Response Times Design it in from beginning

20 Requirements Gathering Business team needs deep business knowledge Are they being taken out of the business to support the change programme? Do the requirements support the MCR model? Difficult to break out of silo mindset Single customer? Common catalogue? Common prices? Release Genie from IT Bottle Gathering requirements versus wishes Want versus Need. Expectation management

21 Tracking and Control Project manger should own the plan Do not detach yourself from planning and reporting process Track internal and external dependencies Are you being challenged by the Project Board? Are benefits being delivered? Management Reporting Quality thinking time Good …. and bad news Planned activities in period …. Deviations… Reasons… Actions

22 Look and Feel Customer Journey Consistency between channels Basket / trolley / cart Entering payment card details Persona driven design? Story Boards Agree basic layout Alignment problems on website Anomalies from real data Who will sign-off design? Marketing manager / Sponsor / CEO Time consuming

23 Go-Live Migration Legacy data Ditch or convert? Data cleansing exercise Data mapping issues Separate domain knowledge Misuse of fields Customer name (title, forename, surname) Migration Metrics Go-live timings Minimise system outage

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