News that Grattan, the mail order goods company, has confirmed job losses sounds a familiar note. The company denies this is a reaction to the economic downturn but despite determination to save the brands and streamline the business Grattan, and its parent group, are finding that transforming the established catalogue and call-centre operations to strengthen and support its online offerings and Internet brands is a difficult and an ultimately painful undertaking that has delivered a bitter blow to some of its employees.
The power of the Internet promises tremendous opportunities and catalogue-based or mail order sales organisations ought to be in the best position to exploit the massive potential the web has to offer. Their sales process and logistics are already set up to cater for remote customers and, while they will require some capital investment in IT, they have bricks and mortar in place to support well-staffed on-shore call centre operations.
Often what they are not prepared for is that the Internet presents a different type of problem and challenge to that which long established businesses are used to.
Most of the technology that traditional catalogue based / mail-order sales organisations rely upon is shared with high street retail up to but excluding the point-of-sale. It revolves around sustaining a steady flow of goods that are listed in a catalogue updated once or twice a year; it involves systems to count stock and replenish warehouses and process orders; and although the dynamics, cost-centres and price-points also differ slightly from those of a high street counterpart the operations are basically similar.
The Internet however introduces some totally new technology and market interactions and in various ways it has a profoundly disruptive impact, altering economic models, customer expectations and product life-cycles. We are finding the same issues affecting other businesses, newspaper and publishing businesses for example, which are experiencing different but analogous upheaval in reshaping their processes and infrastructure to do business online. People become used to the convenience of searching, communicating and ordering via the web. Bulky catalogues, without adequate website support, are becoming increasingly irrelevant. Even worse, pure ‘play-online’ retailers, such as Amazon, which appeared on the scene within the last 5 - 10 years, do this better and have already become household names, loosening the brand recognition advantage that companies like Grattan have built-up over a similar number of decades.
Organisations fail to realise the potential of the Internet through lack of strategic focus, poor organisation and poor decision making: how well equipped are the key stakeholders in the merchandising and marketing divisions to select and implement the appropriate strategic IT architecture? How can the IT team understand the business potential of web-enabled business systems? Regardless of the type of organisation, these questions and others about the web will be of vital importance to any organisation and its relationship with the Internet, and failure to support key stakeholders by providing them with the right kind of IT direction will ultimately damage the business.