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Internet Retailing 2010: Spotlight on House of Fraser

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House of Fraser was a relatively late-comer to ecommerce. Its transactional site didn’t go live until September 2007. When it started out, it initially carried about 15,000 lines from some 200 brands. Today it boasts more than 650 brands and, says Peter Callaway, director of ecommerce at House of Fraser, it will probably become the biggest store in House of Fraser by the end of this year.

“The objective is, and it will probably happen by the end of this year, that we will be trading as the biggest store in House of Fraser,” he said. “We’re already in the top ten stores.”

So what’s been behind the fast growth of House of Fraser’s ecommerce channel over recent years?

One key factor, says Callaway, was customers’ appetite for buying from what was “already a very well-known brand offline.” He adds: “Customers already had expectations of what House of Fraser would offer, and that gave us some advantages in terms of our online brand identity.” But that also presented the retailer with its own challenges.

Peter Callaway, ecommerce director, House of Fraser

“We launched initially with a fairly limited range and customers expected that from day one they’d be able to get everything that House of Fraser sells online,” he says.

To illustrate that, at launch the website offered about 25,000 SKUs (stock keeping units) – a fraction of the 200,000 SKUs that its largest store would carry.

House of Fraser has made a point of listening to its customer expectations as it develops its approach to multi-channel, through regular feedback from its loyalty card holders. “We ask them what they like, dislike, what they’re looking for and we track how they’re shopping,” says Callaway.

As a result the retailer has broadened the range stocked online and has also introduced a number of improvements to the service, especially when it comes to joining up the in-store and ecommerce sales channels through a cross-channel service. Those improvements range from recently-launched international deliveries to the ability for customers to order over the phone. Other developments have included an Iphone gift-finder app, and social engagement over Facebook and Twitter.

The feedback, and analysis of customer behaviour in its website, has reinforced the importance of the different channels within House of Fraser’s business. Many visitors to its website head straight to the store locator, underlining the importance of the site as an information portal as well as for ecommerce. And it also underlines the relevance to customers of multi-channel shopping, says Callaway.

He says: “I think multi-channel retailers have a distinct advantage over those retailers that just have stores, or pureplays with no stores. That’s because increasingly customers just want to shop how they want to shop and that will be different for every customer. I think if you have a truly cross-channel offering you maximise the opportunities to engage with your customers.”

Coming relatively late to ecommerce, says Callaway, did give House of Fraser an advantage in that it knew from day one that anything bought from the website must be returnable to any store in the business, laying the foundations for a truly multi-channel service.

“I think that’s been a real strength. It forced us to take some decisions about the way we developed the website and allocated stock so it became an extension of some existing systems and processes within House of Fraser.”

He adds: “Almost certainly there is an advantage of being a late mover to a new space, because you can learn from what other people are doing to amend and tweak your proposals and offering.

“Having said that, you’re still moving, for a company like ours, into a very new area that brought its own challenges in terms of new ways of working and understanding how customers are going to shop.”

With the ecommerce sales channel set to become House of Fraser’s biggest store by the end of the year, something’s obviously working. So what other big lessons has the retailer has learned from the experience?

One of them, says Callaway, is in: “how you grow the expertise of the team. Ecommerce is very fast-moving and there’s always lots of new technologies and techniques, and the need to examine how your customers are shopping out there. It’s one of the biggest challenges for a successful retailer.” He’s found that blending technical and retail expertise has been important.

But, he adds: “There’s no formula – that’s the skill of building a team, building the right mixture of skills, and learning which ones to focus on at different stages of development.”

This is an issue Callaway will be returning to on October 12 when he speaks at the Internet Retailing 2010 conference. His subject will be, Evolution of a Webstore.

You can find out more about the conference and register here.

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