Retailers going against the grain to overcome silo mentality

There are signs the digital evolution that spawned organisational silos at its onset in retail is now forcing companies to break down disconnected departmental thinking.

Retailers are actively embracing more cross-departmental working methods and merging how they report sales across channels which is distinctly different to pioneering online retail deployments which were set up in isolation from the wider, traditional business.

The eTail Europe event in London in June brought much of this to the fore, with retail speakers reporting encouraging progress in this space.

Head of eCommerce at fashion retailer Whistles, Simone Williams, said the wider team has come together during a process to implement and refine its new ship-from-store capability. It is a similar story for the retailer’s other “omnichannel” projects, and involves Williams meeting with the IT, merchandising, retail directors each month.

“We sit down and review omnichannel performance, ship-from-store performance, and mixed dispatch which changes during different trading periods,” she explained.

“You need to forecast and plan for [changes in demand] and get your lessons learnt.”

Whistles works with OneStock to open up its stores for eCommerce order fulfilment, and the deployment of this software and the evolution of the system has required collaboration between multiple teams in the company.

“Our challenge is we buy quite tightly – we are not the kind of brand that buys in depth and has a lot of stock sat in our DC,” noted Williams.

“So, we have very much been working very closely with our merchandising team, getting them to understand what it actually means to buy from a demand perspective rather than a net sales perspective – and that’s been a big learning curve.”

Click & collect

There are perhaps no examples of physical and digital integration as tangible as click & collect. But, anecdotally, although click & collect has provided a suitable service for customers, it has caused internal sales attribution strife for many retailers.

However, Dee Gittins, head of online trading & digital marketing at arts and crafts retailer Hobbycraft, told eTail Europe delegates the introduction of click & collect has been “a huge psychological catalyst” for aligning stores and eCommerce teams.

“[Finance] used to report on channels, they now report on total business and they become very much the independent arbitrator”Dee Gittins, head of online trading & digital marketing at Hobbycraft

“If nothing else it has got stores on board with why they should endorse eCommerce,” she noted, adding that its introduction has made its company’s 95 store managers see online retailing in a different light, thanks partly to its potential to drive traffic.

Gittins said there is “no silver bullet” for breaking organisational silos in retail, but she commended her business’s head office for focusing on total sales targets rather than separate divisional ones.

Talking about a recent financial department restructure, she remarked: “They used to report on channels, they now report on total business and they become very much the independent arbitrator between [channels].”

New KPIs bring teams together

Essential Retail recently reported Joules CFO Marc Dench’s comments from eTail Europe, where he detailed how Joules stores drive wider benefits than solely turnover.

He said they are crucial for brand awareness and driving local eCommerce sales, and talked up Joules ‘Total Retail’ model which is devised to generate sales across channels – as opposed to one over another. Store staff are recognised for their impact on eCommerce as part of their performance monitoring, too, but he doesn’t see a problem with some level of internal competition.

“You want some tension in the channels – we encourage eCommerce and stores to be a little bit competitive,” he added.

“You don’t want it to be destructive from a consumer perspective – you want it from a customer perspective to look like you’re completely joined at the hip. We actively encourage the competition but as a business we run it as a single [entity].”

Brian Sivyour, head of IT portfolio for buying & merchandising and supply chain at clothing retailer River Island, detailed the importance of ensuring the wider supply chain thinks with more of a digital perspective.

“We have an organisation that is used to the tempo of buying for stores – the tempo for buying for online and the newness is different,” he noted.

“Therefore, taking that online tempo all the way back to the earlier processes – as well as that final delivery step – is something that is becoming increasingly important for us.”

He spoke about the multifaceted River Island distribution network, which comprises marketplaces, franchises, and wholesale, as well as owned stores and a website, and said each of these channels is now involved in the product design and buying process. That move brings formerly separate business divisions much closer together.

Bed retailer Dreams is another business that has made changes to the way it communicates internally and has introduced technology that breaks down silos between sales channels, as previously reported.

“You want some tension in the channels – we encourage eCommerce and stores to be a little bit competitive. But you don’t want it to be destructive from a consumer perspective – you want it from a customer perspective to look like you’re completely joined at the hip.”Marc Dench, CFO at Joules

Nothing’s perfect

In a competitive industry when capital for major projects may be difficult to come by, there is always going to be divisional tension within retail.

Systems integrator Greenlight Commerce released research in July suggesting internal blame culture in eCommerce projects is hindering growth and success for UK retailers.

The study, which questioned 100 UK-based eCommerce decision-makers within the retail sector, focused on the disagreements between IT and marketing teams. It found 25% of marketing teams at those organisations had blamed IT for a project failure, and 30% vice versa.

Kevin Murray, managing director of Greenlight Commerce, says: “Senior management must ensure the rift between IT and marketing is healed and resources properly allocated between the different departments to drive success.”  

When projects are conducted in inter-departmental teams this blame culture can be minimised, as responsibility is more equally shared, and there is growing evidence retailers are shifting in this direction.

Hailing the power of better internal collaboration, Whistles’ Williams said: “We’re all coming at it from different viewpoints – what might be an opportunity from my perspective might be a challenge for someone else’s perspective.

“We come together and determine what’s right for the wider business.”

She added: “[The success we’re experiencing] is really down to the leadership, the senior team, the collaboration and getting everyone to work together. That didn’t used to happen and without it I can’t see how a business can be successful today with the challenges retailers face.”