The retail industry is tough!
You just have to look at the sporting goods sector as an example, with the Sports Authority bankruptcy in the US and wider afield with the collapse of BHS in the UK homewares sector.
Things are not so easy for brands either. Many, among them Nike, Adidas and Under Armour are competing for limited consumer mindshare as they launch an increasing array of new products and updated lines more frequently than ever.
Millions of marketing dollars are spent each season drawing consumer attention to these brands.
When a customer goes into a store, whether to browse, check a product is the right fit for them or looking for support in their buying decision, there’s often a huge disconnect between expectation and the in-store experience delivered by the sales associate. If that same shopper is met by a someone who understands the brand ethos and has sufficient product knowledge to advise with confidence and trust, then a sale will likely happen and the brand will see a return on its marketing investment. If, on the other hand, the sales associate is not properly informed, then the customer will quickly realise and could either walk or worse, buy a competing brand’s product, wasting the brands investment and possibly losing that customer for ever.
To communicate with and train retailers on their products, brands have typically relied on sending sales reps or brand ambassadors into store to hold occasional training sessions, or running hosted bootcamps, inviting a select few associates to spend time getting to know the latest products. The problem with this approach is that it’s expensive, transitory and doesn’t give anywhere near adequate coverage across brand dealerships and sales associates, all of whom will interact with prospective customers in stores.
Brands are realizing this dynamic isn’t sustainable and are looking for online solutions to offer all staff comprehensive training to complete ‘the last mile’ in the marketing and sales journey. Retail training is in crisis and online provision is inevitable. We are at a point where a brand must decide whether they’re going to “build” (or have built for them) proprietary training software or “buy” (license) an existing online training network to get the right message out to retail staff. In this article, we’ll examine the pros and cons of building a proprietary system, versus licensing an existing solution.
Building a proprietary online retail training network
If a brand decides to move forward with a proprietary online training system, there’s several options available in the marketplace. However, none of these technology or agency solutions can deliver a platform that will on its own, attract a significant audience. This will require a huge investment in marketing and it’s daunting to realize that some of the biggest brands in the world still struggle to build an engaged audience of any significance alone.
Part of the reason is that retail staff just don’t have the time to log into stand alone portals for all the brands stocked by their retail employer. Yet, it’s understandable that big brands who’ve invested millions in building consumer awareness and credibility would want to control their image and message to sales associates too. Brands should carefully consider their objectives for building a stand alone training system and review rationally whether it’s best to build or buy.
These objectives often include the following:
- Maintain brand fidelity and offer an authentic experience
- Increase mind share and market share
- Build a competitive advantage
- Increase sales
- Build better retailer relationships
- Achieve maximum retailer reach
- Customer experience.
Let’s take each of these and review them in the build vs. buy context to reflect on what approach ultimately makes the most sense.
A proprietary training system does offer the possibility of greater brand fidelity. A brand can control the user experience and ensure undivided attention is given to its products and messages. What’s more important though is to ensure that the training content itself is true to the brand identity and properly reflects the products, whilst remaining engaging for the learner. It’s not as important for the hosting portal be brand specific, just as most brands don’t have exclusive stores for their products- allowing them to be displayed in multi-brand stores, alongside competing merchandise.
So, unless you’re an extremely large brand who can afford the cost to create the tools and promote engagement then maintain and support the infrastructure, this is not the right approach. The priority has to be to ensure your content is great and that it’s exposed to the widest possible audience of retail sales associates. If there’s an online network that is rapidly attracting retail associates that represent your brand, it’s simpler and more effective to provide your best content to that network and pay the associated subscription fee.
Increase in market share
If a brand can effectively reach retail associates with its training content, mindshare will follow and sales will improve along with market share. The key is to deliver content to sites that already engage your audience rather than struggling to invite them to your tool. Imagine if every brand built its own portal and associates needed to log into every one to access critical content? The workload would be unsustainable and the experience too fragmented. Most retail associates will gravitate to a site that conveniently provides them with the full range of information and tools they need in their job and this is more likely to come from an online network. One that aggregates the most relevant and useful content for its audience. It’s best for brands to ensure their content can be found in a place where the audience already hangs out.
Competitive Advantage.Brands are always looking for an edge over the competition. However, building an online training portal is likely to be a time consuming distraction rather than a winning strategy. If you’re a brand that makes bikes, tents, strollers, skin care products or golf clubs, the chances are that you’re pretty good at it and you know how to market your products effectively. As management guru Peter Drucker famously said, “Focus on what you’re good at and outsource the rest”.
The competitive advantage here is to be found through supporting an existing network of sales associates online and offering excellent relevant content. Anything less will hand the advantage to the competition.
One of the best ways to achieve more sales is to ensure that the right message is delivered to retail partners and their staff at the right time. After all, knowledgeable sales associates are known to sell more. Once again, the key lies in the quality of a brand’s content and the ability to deliver it effectively to everyone. Building a proprietary training system won’t give a brand the edge here, unless it can ensure that all of its retailers and staff will sign-up and engage. In the time it takes to build a system, store associates are already congregating somewhere else for training purposes. It’s quicker to reach them there.
Build better retailer relationships
Certainly, providing high quality training content to your retail partners helps to build fruitful business relationships and the store associates appreciate the brands who offer this versus those who don’t. However, when opting for a proprietary system, a brand is effectively asking retailers to come to its door – rather than the other way round. Moreover, building a proprietary system means that a brand will typically focus on its own requirements and this might mean completely missing what’s important to your retail partners and their store associates. It’s better to opt for a system that’s been designed specifically to meet the needs of retailers and their brand partners and to share your content in that space. The most successful systems are built with the customer in mind (in this case the retail store associate) not the owner of the system.
Achieve maximum reach
This one is critical. Brands need to distribute their training content to their channels wherever they are for maximum coverage. If that content doesn’t reach them, the ROI on building the content will not be achieved and money spent on brand marketing will be wasted. A brand must ask itself, “if we build it (a proprietary training system) will they come?” Probably best not to bet on that one. It’s extremely hard and expensive to build a niche web audience. There’s also the huge upfront cost of building and rolling out the system in the first place. The better approach to achieve maximum retail reach is to deliver the best brand content to a network that has an audience of retailers and a proven record of engagement with retail store staff.
One of the reasons for a brand to go with its own system is that it can customize for its specific needs, such as defining a streamlined integration with a pro-deal rewards system. However, this can be covered by defining the relevant requirements and then checking whether a technology provider can meet most of these. If they can, going with that technology provider is the path of least resistance as they’re likely to have experience with these types of integrations and know what pitfalls to avoid and what requirements are relevant.
The true cost of a proprietary retail training system
If it sounds like hard work to go it alone, that’s because it is. Too many times hundreds of thousands, even millions of dollars go into a sub-standard system that had very little real design purpose to begin with. All it ends up doing is taking people away from what they’re good at. The total cost of ownership is rarely known at the outset and is typically much higher than ever imagined. A proprietary training system will come with costly maintenance fees and upgrades on both technology and content. It will also need a team to deploy, manage and support the network.
More often than not, what starts out as a small project can quickly spiral out of control and fail to achieve the original goals. It then becomes difficult to jettison the project because significant costs are sunk and there will be some users engaged. The result may mean throwing away good money after bad to support a lame duck.
Requirements for an online training platform
In deciding to buy rather than build an online training platform, it remains important to focus on the requirements of the end user, the usability of the system and the right type of provider.
These should include a platform that has:
- Been built with the user in mind – the retail sales associate, for maximum engagement
- Achieved significant retail reach – to expose your content rapidly to a significant audience
- Best-in-class authoring tools and support for video content
- A robust analytics and reporting suite
- A scalable solution
- Integration capabilities via an API
- Flexible and scalable pricing – for pay as you go and headroom to expand
- A provider that can offer:
- The ability to pilot the software first to test functionality & engagement
- A smooth and professional implementation process, including onboarding, content planning
- Setting goals for learning outcomes such as reduced staff turnover and increased sales
- Best practice store associate engagement consulting
- Ready and helpful support throughout the deployment.
Brands should focus on building the best online learning content for sales associate engagement that will lead to increased sales and exceptional customer experiences. An investment should not be diluted by the costs and resources needed to build a proprietary training system. Content should be deployed to a network that can provide the broadest retail coverage in the shortest amount of time, one where there is high engagement from retail associates. To remain competitive, brands should focus on what they do best, which is building and marketing great products.
They should never underestimate the REAL cost of building, promoting and maintaining a proprietary training network.