Christmas Delivers Skills Demand
Hitting multichannel critical mass highlights the need for more experienced staff.
The online sales growth seen by many retailers over Christmas has hit the headlines in the past few weeks as trading updates have been published. New Look’s online sales up 50%, Fat Face’s online sales up 65%, and Tesco’s online food sales up 18%; the list goes on and on.
However, sector commentators argue that while this growth is impressive, online sales overall still only account for around 10% of total retail sales. While this is true, Christmas trading has highlighted the growing number of businesses who are reaching critical mass for multichannel sales; and shows why it’s crucial that they widen their multichannel talent pools.
Online skills all around
For instance, department store John Lewis registered £800m online sales in December 2012, driven by its click-and-collect service. And competitor Debenhams has seen its proportion of total sales from online move from 9.3% to 12.6%. Meanwhile even N Brown Group – with its perceived older customer base – is seeing 54% sales through the web.
Once you achieve figure such as this then it is no longer enough to have an ecommerce director and a small digital team. Online knowledge and experience starts to become important to all parts of the business, from merchandising, marketing and customer service through to supply chain and logistics.
Within marketing departments we are seeing teams grow as retailer add specialist expertise in areas such as search engine optimisation, CRM and customer insight. IT and project delivery teams are finding they need specialists with experience of multichannel retail to deliver the infrastructure and culture change projects required as retailers become more joined up between sales channels.
And it’s an issue even for the most traditional areas of retailing. The way buyers work may need to change; for instance if you are a catalogue retailer moving from seasonal buying to adding new product to the website weekly, or a retailer with stores offering online-only exclusives.
At Argos, online accounted for 42% of all sales, and mobile sales are growing at a rate of 125%. In its last half-year results, parent Home Retail Group reported that mobile commerce represents 7% of Argos’ total sales.
Another great mobile example is Shop Direct: in its trading update it reported that mobile now accounts for 28% of all its online sales (and online accounted for 80% of total sales over Christmas). Indeed, 37% of total online interactions by its customers are via mobile devices.
Figures such as this provide compelling reasoning why we are seeing many larger retailers appointing a head of mobile.
And this critical mass trend is true even for smaller businesses. Cath Kidston reported that 22% of total sales were from online in its latest figures, for example. While smaller businesses cannot support the huge multichannel teams of their larger peers there is evidence that online – and even mobile – experience is a must-have for the senior appointments that they do make.