5 Takeaways From a Career in Cross-Channel Retail

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.

He gave an example within his own company as to why this is important: A senior-level executive went into one of the company's Catherines’ stores anonymously and asked a sales rep about shopping on Catherines’ website. The rep told her that the store discourages consumers from shopping on the brand's website, preferring for them to spend their money in-store. The reason why? Sales reps' bonuses were tied to in-store sales and they believed the e-commerce site was cannibalizing those sales. To address this problem, Charming Shoppes has begun crediting store sales reps for sales when a customer who shops their store buys online.

Lesson No. 3: Focus, focus, focus. Don't be distracted by shiny objects or bogus metrics. Search and ease of checkout move the needle online, not foursquare and QR codes, said Bass. The only metric that matters is revenues minus expenses equals profits. This pertains to your company's social media efforts as well. While having a million Facebook fans may meet an internal goal, the real question is what's the value of those fans? If you don't know, you shouldn't be spending money on trying to acquire more of them, Bass advised. Don't let hippos (highest paid person's opinions, an acronym used by Bass) run your company; make decisions based on data and testing.

Lesson No. 4: Pay attention to lesson three. But also take advantage of new capabilities. Bass cited the launch of Fashion Genius, an online survey tool for women shopping for the perfect fit and style of clothes, as an example of Charming Shoppes taking advantage of new technology. Calling it the “Google for clothes,” Fashion Genius is a three-minute survey on Lane Bryant's website. The survey is fun for users and adaptive based on their answers. In the end the consumer is presented with an outfitting tool based on what's most applicable to them based on their answers. Launched on Sept. 12, Fashion Genius saw 60,000 surveys completed in one day.

Lesson No. 5: What's ahead. While Bass isn't particularly bullish on things like foursquare, QR codes and F-commerce, he's predicting big things for e-commerce and iPads. Thirty percent of brick-and-mortar store sales will shift online within the next 10 years, Bass predicted, drastically changing store economics. He cited Best Buy's efforts to sell space within its retail stores as a foreshadowing of what's to come. But don't rush into signing any long-term lease deals, he advised.

The iPad will matter a lot in the future of retail, according to Bass. It provides a shopping experience that's superior to an e-commerce website. Smartphones, however, won't matter so much, depending on product category. Bass says the small screen size of a smartphone negatively impacts the shopping experience. And social media will matter as a tool for customer service, but not for sales — at least in the near future.