Articles

The Strength of The Blended Retail Business

Around 3,000 years ago retail had its humble beginnings in the marketplace of Lydia in Asia-Minor. From make-shift stalls to the grandeur of Victorian times, to the modern architecture of the 21st century, retail has developed the nature of its selling environments dramatically to match the social context of its shoppers.

Along the way we picked up alternative formats and more recently alternative distribution methods to arrive at a landscape that offers shoppers a 24/7 smorgasbord of shopping options.

We have direct shopping; catalogue shopping; mail order; call centres; e-commerce/internet shopping; convenience shopping; high street stores; shopping centre stores etc etc. So many options that at times it is confusing not just for the shopper, but also for the retailer to wrap their head around.

Often this has resulted in channel led retail or retailers who have developed from and see themselves as being defined by their primary channel. “We are an internet retailer” some say. “We are a bricks and mortar retailer” say others and on it goes. This is not however the customers reality.

One of the best retailers in the world is Williams-Sonoma – the leading upscale home-wares retailer in the United States. They see themselves as a retailer – full stop. It helps that they developed a strong catalogue business in the early 1970’s in addition to their growing store network. 30 years ago they learned that customers develop a brand relationship and that channels are merely differing distribution options that the customer will choose to use to fit their needs.

As a consequence they built a truly blended business model that today spans a common product range; pricing architecture; navigational process; merchandising format; supply chain; support services & enablers; and promotional model across every channel. There are no silos of people working to differing and often competing key performance indicators. There is simply one business with the only variation being how the customer chooses to browse, purchase and take delivery of the goods and services they wish to access.

The big learning in best practice globally is that it is the customer relationship to the retailer that matters. Channels are not retail businesses in themselves but merely distribution platforms for the retailer who should be focussed on building their brand and customer relationships.

The blended retailer understands that multi-channel operations are not a luxury but essential and that all channels need to work as an integrated part of a whole rather than as a drunken octopus that is unaware of the dysfunctional behaviour of each of its tentacles.

Multi-channel is good but blended retail is powerful.