While Bill Bass is still very much employed — he's currently the president and CEO of Direct at women's apparel retailer Charming Shoppes — he took a step back yesterday at the Shop.org Annual Summit in Boston to reflect on five lessons he's learned from the 15 years he's spent in the retail industry, including stints at Lands’ End and Fair Indigo. Here's a recap of Bass’ keynote speech.
Lesson No. 1: E-commerce isn't just another store, nor is it just a cheaper marketing channel. E-commerce sites vary in four key ways from brick-and-mortar stores, Bass said. One, they have different sales rythms. While retail stores capture the majority of their sales over the weekend (and run sales and promotions during that time), e-commerce sites are just the opposite. Most online sales occur during the week. Therefore, your promotion schedule should reflect that trend.
Secondly, your e-commerce site is likely to have different competitors than its brick-and-mortar counterparts. For Lane Bryant (a Charming Shoppes brand), Bass considers its retail store competitors to be Kohl's, J.C. Penney and Wal-Mart, but the brand's e-commerce site's chief competition to be OneStopPlus.com.
Thirdly, the key factors for success for each channel are different. Bass said that an easy search and checkout process are the determining factors to being successful selling online. But those factors fall way down the list on whether a retail store is successful.
Lastly, and most importantly, is that e-commerce sites and brick-and-mortar stores have completely different P/L statements, said Bass. Revenues and expenses differ between the two channels, so therefore they can't be run as the same entity.
Lesson No. 2: Organization structure matters. Your e-commerce team should be independent of your other departments and should report directly to the CEO, said Bass. There's so much going on within the retail industry — particularly online — that only a CEO is going to approve spending. Bass advised getting a CRM system that can track customers’ buying behaviors by channel.