It's not often I attend a conference where there is a whole stack of big name customers speaking and I walk away feeling disappointed about the content. Todayat the etail conference in London I listened to the likes of Karen Millen, House of Fraser, QVC, Shutterfly and BSkyB all talk about their e-commerce and omni-channel challenges – everything from getting a single view of the customer, to legacy system constraints, to personalisation of services – and yet I came away feeling like I had no clearer an idea of how a big retailer should approach digital commerce across a number of platforms. This is no fault of the speakers or the event organisers, but mostly because it seemed to me that everyone in attendance is still figuring this out. There were a few interesting nuggets, but nothing really jumped out to me as a clear and definitive strategy or approach that I could relay for the diginomica readers.
That is except for Puma's e-commerce story. Andreas Hindelang, Puma's head of e-commerce for Europe and the Middle East, explained how the world's third largest sports and lifestyle brand, which has a turnover of $4 billion, restructured its organisation and consolidated its online estate in order to rollout a new e-commerce platform globally. He also had a few words of warning for anyone else taking on a similar approach, but his main piece of advice was to think locally.
I'd never really thought about this from an e-commerce perspective, but Hindelang is convinced that catering to local needs can actually lead to a higher click through rates and higher conversions. When I think about my own experiences online - even if I'm just using an American website, which I often find have a different style to British websites, obviously use US english, and payment will be made in $ instead of £ - I can be extremely put off from making a purchase and will try to find out where I can make said purchase on a UK site. This becomes even more pertinent when you're a European company selling into Latin America or Asia Pacific, as Puma found to be true.
But first let's get an idea of some of the changes that Puma has been experiencing in recent years from an e-commerce perspective. The company's online customer base is growing, but in regions outside of North America and Europe, and purchases are shifting to mobile. Hindelang said:
“The largest number of net additions in users of the internet will come from LATAM and Asia. We will also see a huge growth in mobile usage and that growth is yet to happen. In 2012 in Europe 17% of our online purchases were from mobile, this jumped to 32% in 2013. In 2012 it was 27% in the US, in 2013 this jumped to over 40%.
“In e-commerce we have to consider these numbers and set ourselves up for the future. Other topics of interest, besides mobile, are marketplaces– the likes of Amazon and eBay in the US and Europe, as well as tmall in China. There are a lot of marketplaces that we want to showcase our products on.
“We have to prepare our organisation for these marketplaces and the complexities that come with that business. We have figured out that copy and paste doesn't work, so we need a flexible solution.”
So with a changing market in the forefront of Hindelang's mind, he went to his IT department a couple of years ago and asked for a list of Puma domain names and micro-sites, in order to get an understanding of what it would take to unify the e-commerce experience for customers. The numbers that came back were staggering – Puma had over 3,000 domain names and over 200 micro-sites, inevitably creating a confusing online shopping experience for customers. Since then Puma has taken the approach of developing a unified platform with Demandware and Fluid, which incorporates responsive design to take advantage of increased mobile use. Hindelang said that this responsive design approach will likely satisfy Puma's needs for the next couple of years, but did add that this may well change beyond that.
However, when rolling out this new platform Hindelang began to recognise the importance of restructuring systems for local needs. He said:
“For example, how do you want to handle translations? This was key in increasing the conversion rates, which immediately doubled. You might think that people are able to speak english, but if a website is in your native language it is much easier and you will have much more trust andconfidence. The conversion rate immediately increases.
“Also, how will you handle multiple currencies? Can you use a global payment provider or can you use a local one? For example, in Germany, if you go to market with just a credit card payment option you will lose out because coverage is only 30%. You have to go to the country with right payment methods. We are going to Europe with 10 different payment providers.
“Also, we launched the new platform in Germany first and then opened up to the rest of Europe straight away. I wouldn't do that again. Rather identify key markets and roll out to each of them slowly, in order to be able to learn about specifics that you need to be successful.”
Other key areas that localisation may impact, with regard to technical capabilities, include ensuring that your underpinning systems and platforms (such as ERP) are ready to deal with multiple languages and currencies. Companies should also be wary of using 3rd parties that aren't truly global. For example, Hindelang said:
“We have come across a lot of 3rd parties that claim that they are going global, but when coming from the US to Europe they have definitely struggled with the complexity of our catalogues, of our feeds. We have five catalogues, with three currencies and four languages at the moment – they need to be ready to feed that into their systems. Sometimes we detected that they were not, so check that they are able to cover the complex architecture that you might have.”
Maintaining local flexibility
As well as getting its systems in order, Puma has also reorganised its structures to culturally take advantage of local requirements. Puma has the followingmantra when it comes to e-commerce:
“Bring brand, content, and shopping together in a way that makes the whole greater than the sum of its parts...globally.”
In order to do this it decided that it would centralise its e-commerce business, running core strategy from a global HQ, but also allow regional e-commerce teams some flexibility to cater to local needs. E-commerce teams are divided across the Americas, EMEA and Asia Pacific. So, for example, HQ will decide on the copy and campaign requirements for the recently announced deal with Arsenal, but local teams will be responsible for things such as translations and geography-specific requirements. Hindelang said:
“For the Arsenal launch we created the product copy globally, shared it across all regions and translated locally. In this we can ensure global consistency for our product information, which is important as you want to manage the expectation of big brands such as Arsenal. You have to be consistent.”
“A centralised e-commerce business allows the global team to oversee market rollout, investment and strategy. But this also allows regional teams to continue to manage the day to day execution and alignment with retail – need to have local flexibility.”
Image Credit for Arsenal Puma kit picture: www.onlinearsenal.com