Channel Surfing: How three major electrical retailers moved online

Omnichannel is not only changing the world of electrical retailing, it’s transforming how consumers shop across the world. But those who think that omnichannel retailing is just about bolting a shopping cart onto a retail website should think again. The retailers that are succeeding in this space recognise the importance of integrating every element of their business into one streamlined offering.

Appliance Retailer went to three very different retailers to find out more.

The Young Upstart: Appliances Online

Founded in 2005, Appliances Online sits in the territory between omnichannel retailer and pure-play-online. Owned by the Winning Group, which also owns the Winning Appliances chain of bricks and mortar stores, Appliances Online was started as a “stand-alone online retail business” according to the Winning Group, without any physical stores or showrooms, and was this year recognised at the Online Retail Industry Awards as Best Pure-Play Online Retailer.

Despite this, Appliances Online certainly found its genesis in the bricks and mortar landscape as the brainchild of Winning Group CEO John Winning, son of former Winning Appliances figurehead John Winning Senior.

According to the younger Winning, it took some time to convince his father that online retail was worth the effort, but now Appliances Online is taking on the “old guard” of bricks and mortar retail and finding success.

“The old guard would have been my Dad eight years ago,” said Winning. “Now the old guard is probably most of my competitors who were quite slow in getting online. And I think that now they are all online, we’ve been happy to be quite public about our success.”

For Winning, that success has come from offering consumers the same dedicated service online that they would expect from a physical store.

“There is so much more to our brand than just a website,” he said. “At Winning Appliances people come to us because we give the best advice at a shop level and we wanted to try and replicate that on the web. One of the things we thought was going to set us apart was being the experts.”

Recognising that the store’s biggest demographic is over-55s who want to be able to “call someone and get some advice”, Winning said it was important for there to be “a face behind the brand” in online retail.

For example, to ensure Appliances Online maintains its relationship with customers, its call centre is operational 24-hours-a-day, 365-days-a-year, with staff using down time to hand-write thank you notes to customers.

Another important part of the Appliance Online offering is delivery. The company delivers to over 80 per cent of the population and 95 per cent of deliveries are made with the retailer’s own trucks.

“Our drivers are absolutely aware that they are the only ones that see the customers,” said Winning.  “I say to them, ‘You’re giving them the best experience and the more over-and-above you can go, then you’ll make sure we can win them back time and time again’.”

For Winning, this is all about bringing the “Where, What, Wow” to every element of the business.

“We want to be where our customer shops with us, which is part of being contactable. We want to have what the customers want to buy from us, which is how our product line has evolved over the years from selling just fridges and washing machines to now having audio visual products, barbecues, cooking appliances and small appliances. And we want to wow our customer with every experience.

“We want to put ourselves on a world level.”

From Shop-by-Post to Shop-by-Click: David Jones

For Australian department store icon David Jones, the move towards omnichannel retail has been a long time coming. When David Jones himself opened his store in Sydney’s Martin Place in 1838, his choice of location would prove to be a masterstroke; with the General Post Office just around the corner, the retailer was perfectly placed to start up a shop-by-post service in 1890, servicing the needs of customers who couldn’t come into the bricks and mortar store.

While the retailer was quick off the mark in the golden days, it was slower to move into the 21st Century with a strong online proposition. But after working on an online overhaul with IBM, the department store relaunched its omnichannel offering in 2012, building on the strength of its social media community and its legion of loyal real-world shoppers.

DJs has used online as an extension of its bricks and mortar brand, with a focus on curated content and editorial-style blogs, as well as live-streamed fashion shows that reiterate its couture cred. While other retail sites look like catalogues, David Jones has tried to emulate the look of a magazine.

“There’s a lot of enabling technology, and there are a lot of opportunities to implement that technology, but it does come down to the quality of content,” said David Jones general manager of marketing in digital and advertising, Adriane McDermott.

This focus on content and consumer experience is tied into DJs’ strategy of “moving from acquisition marketing into relationship marketing” as McDermott explained.

“The one thing that DJs that has that a lot of others can’t necessarily claim is that element of trust, and that’s built up over years,” she said. “People wanted to be entertained, to be inspired and to participate with our brand. But you need to provide some incentives to customers to get them across the line to that relationship.”

Just as the brand no longer relies solely on traditional “acquisition channels” such as TVCs and print advertising, David Jones’ omnichannel strategy doesn’t rely on a website alone. For its relaunch, DJs developed a new transactional mobile site and magazine style ‘tap-to-shop’ app, as well as new back-end warehouse management and content management systems, all of which are designed to work together to ensure a smooth and polished experience for consumers.

The Bricks and Mortar Institution: Harvey Norman

In March 2012, Gerry Harvey took to the ABC’s Lateline program to declare that furniture sales on the internet “are zilch, or so close to it, it doesn’t matter” and to say of whitegoods, there were “no internet sales in the world on that to speak of”.

Tough words for one of Australia’s leading electrical retailers and a company that was trying make its mark on the collective consumer psyche with its fledgling e-commerce site.

Since launching its transactional site in November 2011, Harvey Norman has used its online presence to complement its network of 170-plus stores across Australia. According to Harvey Norman’s general manager of digital, Gary Wheelhouse, online and bricks and mortar retail are like “yin and yang” — two parts of the one strategy.

“Omnichannel retail is about not only giving customers the great experience online that they’re used to having in-store, but it’s also about giving them a great experience in-store that they expect now that they’re online.”

One example of this is Live Chat, a service designed to create an online version of the face-to-face service customers get in stores. With 15 ex-store staff on the Live Chat team, Harvey Norman can “talk to an awful lot of customers every day”, answer online questions in real time and even hold multiple conversations at once — a distinct advantage that is only possible online.

“A great experience for a customer is about having humans when you need them, technology when you don’t,” he said. “What Live Chat does is it replicates the things that people love about walking into a store.”

Once the customer has done their research, asked their questions and made their purchase, Harvey Norman is also well placed to deliver, thanks to its Australian network of over 170 stores. Orders can be fulfilled from multiple locations, rather than the one warehouse, and customers have the opportunity to pick up in-store, with online orders getting pushed to the relevant store in a matter of minutes. In this way, a bricks and mortar presence directly benefits the online offering.

As for those that push back against Gerry Harvey’s comments and say Harvey Norman has been too slow to get online, Wheelhouse was defiant in the face of critics.

“I think there is an advantage in not being the first mover, especially when you’re trying to do multichannel,” he added. “Ten years ago, it was all about opening a website and getting a couple of distribution centres and putting a whole bunch of stock in. That doesn’t make sense for us. What makes sense for us is we’ve got 170-plus stores that are within a stone’s throw of the average customer in Australia. And that’s not changing; it’s not like all of a sudden because of online, customers moved further away from stores.”

“There are an awful lot of great competitors now that we learnt from and that we are developing a competitive solution around,” he added. “If they have a competitive advantage over us, and we think that’s something that customers want, then we will develop. And we have.”

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