In its race with archrival Office Depot Inc., Staples Inc. is tackling a problem that retailers in many markets are facing: coordination of a variety of sales channels.
“The big buzzword today is to have a customer-focused organization because you have all these channels,” said Patti Freeman Davis, an analyst at JupiterResearch, in New York. “Retailers realize that consumers interface with those channels as they want to, not as the channel wants them to.”
Davis said Office Depot, in Delray Beach, Fla., is seeking to use its Web site not only to capture sales but also to drive customers to its stores. “These companies are trying to get the back end coordinated so they can service these customers,” she said.
But assuring that data remains consistent across multiple channels is no easy task, said Andrew White, an analyst with Gartner Inc., in Atlanta. “Before you can automate [supply chain] processes, you have to make sure your data is the same as the suppliers. Too many times, it is a problem. All the retailers on the planet are focused on this,” White said.
The efforts of Staples, in Framingham, Mass., to create a centralized product information repository and to make consistent product data accessible to key supply chain applications addresses the issue head-on, he said. “That architecture is a good thing to be doing at this point. A lot of retailers in other markets want to get to that point,” White said.
Some retailers, such as Office Depot, are relying on a suite of retail applications from Retek Inc., of Minneapolis.
“Retek is probably the largest high-end retail management solution stack. It does everything, like merchandising and procurement, but doesnt synchronize effectively across the enterprise. If you use only Retek, great, but if you use another app for catalog or Web site, you have several silos of data,” said White. “There are very few packages that are good for multichannel retailers.”
Davis said customers are accustomed to using Web browsers for a variety of tasks, and as a result, kiosk usage in stores is on the upswing, even as kiosk technology improves. “Kiosks are getting better and are less costly. And consumers are more used to interfacing with that technology. The use of an electronic interface to research or shop is now customary to how people operate,” Davis said.
Because customers are increasingly comfortable using electronic interfaces, online sales will grow at a torrid 38 percent compound annual growth rate through 2008, according to JupiterResearch.
Maintaining consistent data will be an even greater challenge as Staples continues to expand globally. “You have the issues of data consistency and naming conventions and different privacy laws around the world,” Evans said.
In the end, Evans said, success will come down to being customer-centric across multiple sales channels.