Providing a consistent end-to-end omni-channel experience for customers isn’t easy for any retailer – but it’s even harder for franchises where operators may have unique and independent goals.
Questions of logistics, communication and alignment create major challenges, which is why e-commerce for franchises remains a difficult task for even Canada’s most recognizable brands.
But one brand making serious headway is Woodbridge, Ontario-based Big Al’s Aquarium Supercentres, a chain of 15 stores with locations across Alberta and Ontario that also provides online sales in the U.S.
Bringing things all together. Most retailers know that working together is the first priority of omni-channel retail – which is all the more important for a franchise.
For Big Al’s, that’s meant an even closer alignment with its motivated owner operators at the store level, ramping up e-commerce sales across the border, and updating its point-of-sale (POS) system for a more comprehensive 360-degree view of its customers’ behaviour.
“We’ve already improved our online data collection and started testing and learning with segmentation and personalization of our emails,” says Chris Parsons, the company’s e-commerce strategist.
An effective POS checkout system, both online and in-store, can gather enormous amounts of data each day. Big Al’s can now better measure the efficacy of its longstanding loyalty program, for instance.
Capturing relevant customer information requires a variety of data-gathering methods, each connecting key customer data with every transaction. Here are a few of the most common metrics companies watch when rolling out loyalty programs, for instance.
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Keeping everyone on message. To ensure a consistent customer experience across the stores, the company’s corporate office manages everything online for franchise owners from fulfillment to warehousing and shipping. The company’s website, YouTube channel and blogs are handled the same way.
Nor can Big Al’s franchise owners make significant changes to their product offering to serve the needs of their local market. All locations have to stay consistent, no matter where they are, to preserve brand identity, Parson explains.
It’s then up to each franchise owner to strike the balance between offering the company’s standard product assortment and servicing the unique needs of their local customer base. But other broadly-based franchisors looking to integrate their e-commerce operations have gone in a different direction. With 1,400 stores worldwide, Cartridge World, a leading ink and toner retailer and franchisor, wanted store owners to be able to manage their own content locally.
It chose to implement a content editing platform that allows franchisees to manage their own store pages, updates, and promotions, while still providing oversight for the corporate office in terms of the overall content.
Reaching out to customers. The most successful retailers are ensuring their marketing strategies are geared toward enabling customers to convert on any channel, Parsons explains: “To truly become omni-channel, you need different tactics: ship to store, pickup at store and an in-store mobile app.”
Each of these ensure customers can access your full inventory, regardless of whether their desired item is in a distribution centre, retail location, or even at a third-party supplier. It means you can “save the sale” when one channel is out of stock.
Franchised companies like Panera Bread are cutting down on in-store lines by allowing customers to complete transactions via the company’s mobile app and pick up their orders in-store. Others franchisors are instituting apps that offer mobile payment, making the customer experience effortless and easy.
Tip. If your franchise isn’t offering payment through a mobile app, you’re probably losing customers to other businesses with this option.
Keeping franchisees onboard. When it comes to investing in an omni-channel strategy, a franchisee from any company is going to wonder if online retail success will cannibalize in-store sales. If a franchise’s online prices undercut its brick and mortar retail price, for instance, this will inevitably lead to corporate friction.
It’s up to the company to show that selling online isn’t a threat, but an opportunity, Parsons maintains.
“Customers do research and are deal seekers online; they aren’t building big baskets. If they go in-store for pickup, they can build a bigger basket. They can interact with associates, who can set them up for long-term success.” In other words, the omni-channel model must be mutually attractive for both the brand owner and franchisee. This includes the division of responsibilities (e.g. marketing, fulfilment, delivery) and the commercial arrangement ( start-up, operating costs, profits).
Avoiding unnecessary friction. Franchisees typically sign lengthy agreements that require them to follow the rules of the franchiser, commonly turning to arbitration to resolve disputes – the kind of discord that Big Al’s has so far been able to avoid.
“In a traditional franchise model, you sign a contract and you’re told ‘these are the things you sell, these are the sale targets you must hit, and this is the marketing we’re putting in place,’” says Parsons. “But at Big Al’s, it’s not just corporate home office driving the total strategy.”
The company builds its marketing calendar a year in advance and franchisees sign off on it so they’re aware of all programs and promotions. Franchisees can also attend weekly meetings at corporate offices to provide input, and receive weekly updates from general manager.
What’s more, the company has instituted a revenue-share model in which all parties benefit from centralized e-commerce. But implementing such a system within larger established franchise operations – particularly those with international reach – can be tricky.
Leveraging franchise knowledge and experience. To be successful, retailers need to work closely with franchisees (who are, in effect, their best customers), on developing an omni-channel model that leverages central e-commerce expertise but also local knowledge, infrastructure and stores.
Some of the key factors to consider include:
- the ability to leverage franchise knowledge and experience
- the maturity and potential of the allocated territory for online sales
- the ease of selling via e-commerce into the allocated territory
- the level of investment and resource required to lead and support ecommerce
- the franchisee’s capability and desire to play a part in online sales
- the size of the market, import tariffs, cross-border processing, shipping and packing costs, availability of international card payment systems
- the challenge of managing product returns and providing effective customer service attuned to local language/customs
It’s also important to anticipate, particularly for larger-scale retailers, that the omni-channel solution that’s been successful in domestic markets may take awhile to yield the desired results in franchise markets abroad, due to local market conditions and different consumer preferences.
Tip. There’s no “one size fits all” solution for the use of e-commerce within a franchise network. Different approaches will be required for different markets and different partners, so it’s imperative that brands devise a flexible strategy that works from both a legal and commercial perspective.
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