Lay the digital foundations to deliver flexible omni-channel for now and the future
The sophistication of consumer demands, expectations and journeys is evolving. Setting up the modern business for digital retail by putting in a flexible omni-channel platform that has a ‘seamless’ offering is of paramount importance. Dynamic engines for promotions, loyalty and order orchestration need to have comprehensive real time customer and inventory knowledge in order to be “consistent” and drive sales.
The importance of the Customer Journey
Customer journeys are clearly interactions between the customer and retailer. What the customer wants to do is always in the context of how the retailers' infrastructure allows them to do it. People leading increasingly busy lives, along with the convenience of online, has meant there is far less time designated for shopping. Customer ownership is becoming ever more competitive and this battleground can lead to fluctuations of revenue and market share between rival offerings of goods and services.
Redefining the Customer Journey
It may seem obvious but retailers and solution providers alike need to start treating customer journeys for exactly what they are – journeys. The introduction of new devices such as tablets, smartphones and kiosks mean that the start and end-points of a customer journey are more varied. The market has long moved away from a linear approach to digital sales.
A modern customer journey can be highly diverse. In the physical world one can turn around, change direction, change route, change vehicle and pause along the way - all in real time. In this light retailers must now have everything in place to permit the customer to dictate their journey, allowing it to be as varied as when they leave their house in the morning. The integration of mobile apps, web and the store means that orders, appointments, baskets, wish-lists, loyalty points and promotions facilitate a whole new set of directions and vehicles for the customer’s journey to take between origin and fulfilment.
Once a digital omni-channel hub is in place all these baskets, wish-lists, loyalty incentives and orders essentially follow the customer everywhere they go. Editing, changing, adding and subtracting happens anywhere, any time. Some (perhaps slightly older!) readers will remember the advertising campaign by Martini some years ago: "Any time, Any Place, Anywhere....". Retailers have historically laid out journeys as specific individual sales pathway. Now, the customer journey can really go in any direction at any stage.
Attack is the best form of defence
This is a business opportunity. Good IT solutions deliver competitive edge to retailers and legacy solutions simply aren’t able to keep up with these journey demands. Something that some retailers have learned the hard way. Many solutions, although functionally adequate, have been produced by IT departments through hard graft, “spaghetti” code and migrated solutions. There is a different way. A chance for retailers to arm themselves with a flexible functional platform to both protect market share and challenge their competitors. The approach, systems and models need to be entrenched into their business to not only provide for the present but also have the suppleness for all the other channel requirements of the future.
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Build the right applications to connect with customers across the channels
Application platforms such as the Enactor Retail Hub and our Order Orchestration engine provide the right foundation for Omni-channel solutions. Having the platform is all well and good but the applications that utilise it need to be responsive, adaptable, engaging and they of course need to integrate seamlessly across all channels.
We want store
The people have spoken. In spite of attack from all directions - namely web - the age old institution of the store isn’t going anywhere. Visiting retail stores, seeing and touching products, speaking to store staff and receiving excellent service remains important to customers (Gartner, 2014).
The move of the web providers into the store seems to be have come slower than expected - web companies are finding harder than anticipated to measure up to the demands of store systems. Web commerce now is only one aspect of a wider omni-channel focus with general agreement that a service oriented architecture delivers best practice. All the important operations of the store means the mantra of “why can’t I just have my website on my till?” neglects the decades of evolution that has taken place in store systems. Today store solutions, such as Enactor's POS, are able to seamlessly integrate into web sites, content management and product information systems, CRM, loyalty as well as provide their own channel applications and handle stock and enterprise management.
This mantra seemed to too blatantly shove the bricks and mortar store to one side. Ironically the dawn of connecting all channels will be what revitalizes the store. Stores are increasingly seen as satellite warehouses, brilliant for click and collect, something with Argos has benefited from to the extreme.
Customer journeys starting on the website and ending in the store are common. Normally because the customer wants to see and feel the product before they buy. This can easily work the other way around however. Sadly the main trend, customers seeing goods in the store and fulfilling the order online, has allowed large seepages, as they are attracted to marginally cheaper or quicker competitors like Amazon. But as baskets and wish-lists can now be built in the store retailers will start to see how the store can be driver of sales on the ecom.
Point of Service
The fixed terminal at the checkout desk has undergone some much-needed improvements. Traditional selling functions are completely bread and butter and have been done to the nth degree. Omni-channel however has meant a suite of applications must available to store staff to intimate the relationship and offer the seamless experience for the customer. Truly now a point-of-service.
Knowing everything about the customer: who they are, where they live, how many kids they have, what they have bought in the past, what size they are, which stores they’ve been to and how many points they’ve got can personalize promotions and ensure repeat business. Access to online baskets and wish lists also allows staff to close sales.
With an endless aisle application the store is no way limited to what’s in stock. Full product ranges brought down from the website allow the customers and sales people to browse through the entire catalogue and create customer orders on the spot. Integration into website using service call means the customer can get the exactly size colour, and model they want. Live stock information allows the customer to have full transparent range of fulfilment options. Either they can pick up from a store nearby, collect from a store near them, get it sent to a store of their choice or of course get it delivered to home.
Mobility around the store must be a given
Mobility around the store is essential to the modern retailer. With all the applications available as on the aforementioned fixed terminal, engaging the customer on the shop floor enhances the assisted sell into a more comprehensive up-sell and cross sell opportunity. Additionally improves customer experience and the chance of repeat business. Yet devices need to be run as thick or thin as required depending on certain variables like: network dependency, speed of hardware as well as data and transaction quantities.
Queue busting can be run on tablets or hand-held devices. This can be used primarily as a selling function for peak time to prevent long queues, loss of sales and improve customer satisfaction. These can integrated with card reader and use of emailed receipts or connected by Bluetooth to receipt printer.
The first thing retailers learned from omni-channel was that engaging the customer wherever they are on smartphones and tablets is a quick-fire way to competitive advantage. Incentivizing customers to download, sign-up and reveal data has proved to be in arms race of its own for last ten years or so. What does this mean functionally? Allowing customers to buy and redeem barcode vouchers on their phone is the day before yesterday’s news. The catalogue of retailers products of the device has been around for a good number of years. So what next? What will now make retailers apps ‘sticky’ to consumers is: real time personalization. Real time points tracking. Real time rewards. Real time promotions. The smartphone is the only way to reach customers every minute of the waking day so is the best way to use real time. That means apps now need sophisticated back-ends in order to fulfil their foreseen potential.
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Omnipotence over the whole omni-channel estate is crucial
Omni-channel is a lot more complicated than legacy POS systems. Their inherent scope means even more needs to be configured, administrated, and coordinated. An effective central enterprise and back office system make a business easy efficiency savings.
Everything within the estate needs to be centrally coordinated by corporate back office. Management must be able to make localized changes from a high-level. Administratively, having one view of an estate means that a business can overcome regional and internationalization challenges. For multi-brand retailers, stores and devices require whole different product ranges, services and fascias. While customer centric entities like; products, promotions, rewards and points need to be centrally configured for consistent omni-channel, they must also need be implemented locally for more dynamic enterprise. For example, offering discounts in a store with low sales levels that day. This is dynamic because it allows retailers to be both reactive and pro-active to changes and events in real time.
On the Ground
Coming to terms with the operations of the store is essential. The store is an organic environment. It is constantly changing and evolving due to the many human and non-human variables within it. Store enterprise management can work in the same way as its larger corporate sibling. Store staff need full knowledge of stock levels, store performance and cash management. Notably they should also be able fully configure and administrate their system depending on user permissions.
It’s all about efficiency
Enterprise systems have long promised operational efficiencies but improvements have typically been incremental rather than delivering wholesale change. A rich package that puts customer processes at the heart of applications, combined with an advanced development toolkit which IT teams can use to build new or modify existing function. That represents a quantum leap in adaptability.
A single platform retail system that supports multiple countries and territories, controlled and managed from powerful suites of software that bring together all of the systems and services needed to run a major multinational, multichannel retail operation into a highly configurable unified package. This reduces the need to integrate multiple country systems, which results in significant on-going cost savings.
The capability to support future channels and devices as and when they are required, added to the capability to develop new value propositions that run across multiple platforms – avoids the need for expensive and sometimes risky integration projects. Running real-time inventory procedures and interconnected order management on mobile devices, facilitates intelligent decisions about whether returned items should be merchandised back on to the shop floor or automatically returned via transfer up to warehouse.
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Be completely responsive to present and future business needs
Retailers need a solution that is highly customizable. Change should be cheap, quick and painless. Furthermore, when changes are made but don’t want to be implemented, they should always be able to go back to the original as a back up.
Is there ‘out of the box’?
Each retailer is different. They have ranging: business models, engagement preferences, and product spreads. Some offer services and some don’t. This has always been reflected in what is needed from software systems and often comes to light when project priorities are laid down in the sand.
The rapid evolution of omni-channel has very much muddied the already murky waters of demands from IT. Where in the past, requirements of bricks and mortar solutions have been relatively straightforward; the inherent scope of omni-channel now brings its own customization challenges. Therefore one could reasonably conclude that projects of change now are more customizable than ever with very little being truly ‘out of the box’.
At the current moment not every retailer is necessarily prioritizing complete and ‘seamless’ omni-channel. This is likely to remain. Once this technology becomes commonplace it is highly unlikely that retailers will be homogenized under the “unified commerce” model. For retailers, extracting the best out of omni-channel will always come about with a slight emphases on some its components, be it: click and collect, loyalty or consumer apps. Which of these components can be drastically different for every retailer subject to innumerable variables: demographic, product size and store locations to name but a few. Whether to use web to drive sales in the store or store to drive web is simply a matter of strategy but will inflict on the overall solution.
Solution deliverers will have to tip toe around existing business practices and infrastructure as well as incorporate the new omni-channel processes on top. This is particularly the case for complex omni-channel procedures. Order Management is the most classic case where highly customized business processes are necessary. For stock optimization, some will be averse to selling store stock for click & collect for fear it will leave store visitors with limited options.
Third party systems also take the customization requirement to another level. Recent trends have seen more and more suppliers for swelling software infrastructure; leaving integration as an ever-larger commitment. Again this is self evident in order management, which relies on a number of different systems like: warehouse and merchandising often located in different places.
Connecting all touchpoints in real time with common data is the very meaning of omni-channel. Yet business will always find value in creating their own touchpoints to gain competitive advantage and drive revenue.
In it for the long haul
Ask yourself - how long does it take for the average retailer to implement an omni-channel solution. 1 year? 2 years? Sometimes more... but rarely. Yet the average lifetime of a store solution is been between 6 to 10 years. Aversion to ‘rip and replace’ existing systems is generally for a variety of reasons namely: cost, resource, corporate willpower or a combination of all three.
When retailers commit to a provider, they are signing up for a long term relationship. They need a supplier with a highly customizable solution that can be tweaked, changed and customized according to the needs that they don’t even know they have yet. This is even more critical now that the omni-channel landscape changes so rapidly, companies need a way to continually innovate and stay competitive.
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