Expanding the offer: a matter of survival for retailers

Business Challenge #1The omnicommerce booklets

Between a Website offering thousands of references and another offering just a few hundred, it is an easy choice for consumers. This means that the scope of the catalogue becomes crucial for retailers. But how to proceed without incurring astronomical costs for storage, transport, management, etc.? By expanding the offer thanks to omnichannel retailing. Here are some explanations.

 OVERVIEW

A question of visibilityIt is mathematical. More than one-third of consumers begin their search for products on Google1. Among them, 91% do not go beyond the first page of results2. Therefore, the vital nature of good natural SEO for retailers is understandable. At the same time, search engines - like consumers - prefer sites offering as many choices as possible. The more products associated with a keyword the brand e-shop carries, the more chance the site has of appearing at the top of the list of search results. And it is the same in stores since 71% of consumers hope to find the same variety of products at a physical point of sale as on Internet3. In other words, brands are forced to expand their product catalogue if they want to deal with competition. Facing brands, pure-players and marketplaces are regularly placed at the top of Google result lists thanks to their almost unlimited catalogue. For example, Amazon4 offers 183 million references on-line! Such a wide range of options that consumers tend to go directly to these websites rather than going via a search engine: they are certain of

finding what they are looking for. Thus, 44% of Americans start their product search on Amazon5.

To reverse the phenomenon, there is no mystery. Without going so far as offering such an extensive catalogue as the pure-players, retailers are forced to extend their offer to remain competitive and to propose more choice to consumers (up and cross-selling). But how to expand the catalogue without skyrocketing costs for storage, transport, management etc.?

 TAKING UP THE CHALLENGE

How to expand the product offer thanks to omnichannel? The arrival of omnichannel commerce offers a new opportunity for retailers to increase the offer in store without greatly increasing storage costs. Touch screens with access to a full catalogue, applications that provide complementary products, store-to-web... there are many innovative shopping paths designed to offer more articles at the physical points of sale. The benefits for the retailer are numerous: increased volume of additional sales, more personalisation of the customer path - or of the products themselves – or even increased cross selling thanks to partnerships between brands. This is one of the keys to expanding the on-line catalogue: getting complementary retail companies to work together through the resale of products as a white label or via a license transfer. This has recently been tried by a children’s clothing brand to offer perfumes in its catalogue. In parallel with these multi-partner agreements, it is vital to pool stock and information. A strategy adopted by Amazon since each partner seller brings their stock information and their standardised product information sheets.

1 Source: Survata for Bloomreach, 2015 2 Source: Chikita, 2014 3 Source: Observatoire Cetelem 20144 Source: Fevad, 2015 5 Source: Survata for Bloomreach, 2015 6 Test performed incognito 30/01/2017

24,225shoe designs for the first

result of the Google search “women’s shoes”

Let’s do a simple test to appreciate the importance of the catalogue in natural SEO. If you type “women’s

shoes” on Google, the first referenced e-commerce site counts

more than 24,225 models. The eleventh result counts 476 and appears on the second page6 of

results

THE OMNICOMMERCE BOOKLETS

REFERENCE POINT

This is a way to increase stock without greatly increasing the volume of work.

The expansion of the offer must therefore be based on qualitative criteria, rather than quantity alone. This implies having the right tools to take up the challenge:• A central, comprehensive and omnichannel repository of the products: the sellers and the customers must have access to standardised, reliable information that is updated in real time.• Automatic import of the external repositories: to have the same level of knowledge, partner brands must communicate their data through APIs and algorithms that can verify the reliability of information.• A Product Information Management tool (PIM): this software makes it possible to enrich product information sheets flexibly by creating products families with different characteristics, for example. These are all essential tools to ensure that brands have a chance of competing with pure-players without turning into marketplaces.

Losing control of your imagePartnerships are primordial, but they should not be rushed into without supervising a manufacturer.Reselling a very poor quality product under your brand name is a sure way to devalue its image and to increase customer dissatisfaction.

Misjudging the impact Marketing strategy, prices... expanding the offer has an impact on many aspects of a brand. Before undertaking this change, the risks for the brand should be evaluated: increase in complaints, price inconsistencies, etc.

Forgetting the Internet userWhether it is search filters or product personalisation systems, brands must do everything possible to help the consumer to find their way in an extensive catalogue. In addition, any item put in the wrong category has a negative impact on image.

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Consider your offer from a strategic point of viewWhat do I want sell? Expanding the offer obliges us to consider strategic issues. For example, does a sports footwear brand have more interest in developing its catalogue towardscity shoes or towards other sporting goods?

Maintain a coherent offer on all channelson all on-line and off-line channels, prices, information and stock must be identical. There must be no question of the consumer finding out that the item they purchased the day before in store, is 10% cheaper on the brand’s e-commerce site.

Share the workload For example, through partnerships with wholesalers, brands can entrust the product information sheets to their partners. A way to control the workload while expanding the offer.

1. 2. 3.BEST PRACTICES

PITFALLS TO AVOID

About Gfi Informatique Gfi Informatique is a major player in value-added IT services and software in Europe, and through its differentiated approach occupies a strategic position between global firms and niche entities. With its multi-specialist profile, the Group serves its customers with a unique combination of proximity, sector organisation and industrial-quality solutions. The Group, with almost 15,000 employees, generated revenue of 1,015 million euros in 2016. Gfi Informatique is listed on Euronext Paris, NYSE Euronext (Compartment B) - ISIN Code: FR0004038099.

Compete with the pure-players?“Consumers have matured in this sense due to the

“Amazon effect” with which they have become used

to having access to an almost unlimited catalogue.

Without fighting directly against the giant of the

Net, the retailers must meet consumer demands by

expanding their offer to remain competitive.”

Pierre Gressier, Head of Distribution & Services Sector, Gfi Informatique.

Omni-partners and omni-logistics building blocks?The omni-partners and omni-logistics building blocks of the Gfi Omnicommerce solution allow you to set up a centralised and unified repository of your products. Directly integrated into your information system, these blocks secure the content enrichment of the catalogue, optimise exchanges with partners and industrialise product referencing.

TO READ: Business challenge #2 // Solving the puzzle of payment methods

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THE OMNICOMMERCE BOOKLETS

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CONTACT Pierre Gressier

Head of Distribution & Services SectorGfi Informatique

pierre.gressier@gfi.fr