Internet retailers set their sights on experienced online marketing professionals
By John F. Moore
Online retailers who thought that all they needed was a burst of sales and their troubles would be over are finding they need to be careful what they wish for. Most are experiencing that burst of sales, but now they’re facing a new challenge—finding the right employees to take e-retailing to the next level. “You can’t make great wine without great grapes,” observes Jim Flanagan, senior vice president of human resources at GSI Commerce Inc., which operates e-commerce sites and provides outsource services for retailers.
Flanagan’s analogy is true, of course. It’s also true that with the online retailing market maturing, more companies are looking for the perfect grapes. “Among my customers that have catalog, bricks and mortar, and online under one corporation, I hear pretty consistently that either they are growing the online portion amazingly or that they want it to grow,” says Karyn Rogers, retail practice leader at answerQUEST, a division of Management Recruiters International. “But they don’t know how to get to it yet because they don’t have the talent in house. That’s why they’re looking for people.”
A glut of applicants
IT positions are still important and always will be. But according to e-retailers and job recruiters, the biggest challenge lies in finding marketing professionals who understand online retailing as well as the particular niche a company serves. E-retailers are finding that this is no easy task.
There are plenty of people willing to do the job. Consolidation, particularly among department stores, has created a glut of job applicants. But few of those candidates bring to the table the specialized skills e-retailers are clamoring for. The upside, however, is that when retailers do find the right people, employees are more interested in stability than hopping around in search of the big payout.
Online retail experience is becoming the critical job requirement. A few years ago, a talented marketing executive with traditional retail experience, or even a bright webmaster willing to learn marketing strategies, would have sufficed for taking on interactive marketing tasks. But retailers are increasingly looking for marketing professionals who are skilled in the ways of online retailing.
No more cobbling
“Companies who got into e-commerce as a second channel, a small piece of their business, cobbled together solutions,” Flanagan says. “More and more they’re finding out that’s not working. That was okay to get them started, but it doesn’t allow them to have a multichannel strategy.”
That’s the situation with Norm Thompson, the online and catalog apparel retailer. When the company put together its Internet marketing team, it filled positions with people who were the corporate equivalent of baseball utility players—responsible for merchandising and sales conversion, as well as online search and affiliate programs—simply because there was no such thing as an online marketing specialist.
But it’s different today and Norm Thompson is looking for prospective employees with more specialized skills. “As the web business grows, we’re seeing more people who have accumulated experience in search programs, affiliate programs, e-mail segmentation, site conversion and analytics,” says Debbie Hess, Norm Thompson director of Internet marketing. “Today, there are experienced people in the market in more narrow areas of focus.”
Retailers with multi-channel operations are especially sensitive to this trend as their web divisions become increasingly important to the bottom line. Once considered the redheaded stepchild among some traditional retailers, e-commerce divisions are now regarded as honored members of the corporate family.
Every quarter brings in record e-retail sales. And that, according to Rogers of answerQUEST, has encouraged multi-channel retailers to concentrate on making their online divisions as strong as their traditional channels.
Rogers, who recruits talent for such clients as Bed, Bath and Beyond Inc., QVC Inc., and Lane Bryant, notes that retailers are looking for people experienced in retail with a strong background in online retailing. “They’re looking for the online experience only, because they have the other channels covered well,” Rogers says. “They want someone who can really focus and make a difference on the online side.” On top of that, she adds, an online women’s apparel store isn’t likely to be interested in someone whose experience has been in consumer electronics or auto parts.
But a good interactive marketing executive is hard to find. Just ask Brian Bilello, director of strategic and business processes for the New England Patriots. This spring, Bilello was looking for a manager for the Patriots’ online store–ideally someone with online marketing skills and experience in selling apparel or sports equipment.
“We’re getting a little bit of either/or but not a lot of both,” Bilello says. “There are certainly a lot of people with bricks-and-mortar retail experience—quite good resumes if we were looking for someone to manage a physical location. But they don’t have online skills. That is not going to make the goals of what we’re trying to do with our online site.”
As the online retail segment matures, more companies are realizing that traditional retail marketing skills aren’t necessarily transferable to the online space. Bilello notes that people from the bricks-and-mortar world often struggle with the task of marketing new products online. “Should we send e-mails? Should we be putting banner ads up? Should we be doing search engine optimization?” Bilello says. “That is a tough skill set. Someone who comes from a traditional retailing background is thinking about newspaper ads, fliers, radio or TV ads, they’re not necessarily thinking about online tools because they don’t even know what those things are.”
Changing attitudes
Certainly, there are enough people in the market looking to fill these types of jobs. Big mergers in the works (Kmart Corp. and Sears, Roebuck & Co..; Federated Department Stores Inc. and The May Department Store Co.) will result in massive layoffs, leading to a glut of retail professionals looking for work. But Rogers notes that most of these people aren’t ideally qualified for online positions.
“If you’re looking for a woman’s footwear buyer, 100 candidates have something to do with retail, 10 will have had some sort of footwear exposure, and if you’re really lucky one or two might be close,” Rogers says. And the same is true of prospective employees with online skills. “And then who knows?” she says. “Are they in the right salary range? Are they articulate? Can they spell?”
That’s keeping recruiters like Rogers busy, and it’s changing the hiring strategies of firms like GSI Commerce. Flanagan notes that the company has enlisted two recruiters in the last six months to help fill positions in interactive marketing, customer relationship management and IT. In the IT arena particularly, such recruiting help allows the company to find people with highly specialized skills, such as database architects and specialists in JDA Software’s retail demand chain applications.
With the exception of people experienced in running CRM applications, Flanagan points out that it’s not nearly as difficult to find IT talent as it was in the late ’90s. What’s also changed is the mindset about IT work, from both the employer and employee perspectives.
As a result of offshoring of software development, as well as a volatile economy over the last few years, IT workers today look for more stable job opportunities, as opposed to the chronic job hopping and contract work in the late ’90s. Along with that is a change in expectations. No longer are potential employees willing to sacrifice base salary for a promise of stock options or other perks such as in-office massages and game rooms.
New incentives
In a post-9/11, post-Enron environment, employers aren’t so willing to offer these up, either. But Rogers notes that where employers have taken away, they’ve added different incentives to retain talent.
“One company I worked for used to give stock options to buyers who got an effective performance evaluation or better and they were eligible for a bonus at a maximum of 20% of their salary,” she says. “Now they’ve eliminated the stock options but increased the bonus potential to 26%. Some companies have slightly increased salaries. That’s the kind of stuff I’ve seen.”
Except for the top executive levels, salaries were largely flat or lower in 2004 compared to 2003, according to Mercer Human Resource Consulting’s annual e-commerce Salary Survey. The average total cash compensation for top e-commerce executives in all industries climbed to $242,700 from $231,400. In the retail segment, however, compensation plunged to $186,800 from $233,000. The compensation for an e-commerce marketing director across all industries dropped to $122,200 from $151,500 in 2003.
Not everyone expects this downward trend to continue, however, as companies look for people with highly specialized skills. “Skills are more in demand as we’re recovering and seeing job growth,” says Jay Doherty, partner at Mercer Human Resources Consulting, “and we’ll see either pressure on wages or pressure on turnover. Often you see both.”
Flanagan says GSI Commerce has been putting more money into its merit pools to retain top talent. And because the company knows it’s looking for people with skills, such as interactive marketing, that will keep it ahead of the curve, it’s willing to pay top dollar to fill those positions. But Flanagan is skeptical about the prediction that turnover rates will increase again.
Seeking stability
“Some people got burned job-hopping in the dot-com craze, and I think with the economy relatively flat, people are more interested in settling into a position,” he says. “There’s a lot of studies out there suggesting that’s going to change. But they’ve been saying it’s going to change for about 18 months now and it really hasn’t.”
Whether it’s in marketing, merchandising, operations, or customer relationship management, online retailers are looking for people who have been there and done it. Although the talent pool for these areas is growing, it’s still not as deep as it is in traditional retail channels. But as more retailers view online sales as integral to the overall business, they will look to the job market to make their Internet operations as strong as their more established channels.
“It makes me look at how my team is structured, understanding the skill sets that are required as we grow,” Hess says. “The market is going toward specialized workers who understand and have relationships with the partners. I’ll be looking at that as I structure my team as to what kinds of skill sets should be developed and hired, as opposed to looking for jacks of all trades.”
John F. Moore is an Evanston, Ill.-based freelance business writer.
