The Secrets of Omni-channel Excellence
14 Aug, 2018
The term omni-channel has been used quite loosely to represent different things based on the industry or the scope. Before we dive into the secrets how would you define omni-channel? The goal of the omni-channel experience is a seamless, progressive and holistic approach. It is seamless across all customer interactions, right from the initial stages of the buyers’ journey through website, mobile and in-store and through post sales service. It is progressive and through this route, we accumulate data in a permission-based way throughout the life cycle. It is holistic, and we capture data across all the touch points. The omni-channel strategy shifts us from a focus on customer transactions to the entire customer journey.
Secret #1 Anywhere, anytime, real-time data access
There are two aspects to real-time access to data. One is that data is available at the place and time of our interaction with our customer and the second aspect is the freshness of the data, which is current and up-to-the-minute. The information that we collect offers a 360-degree view of the customer. It is also permission-based, rich, customer interaction data like interests, wishlists, preferences and purchases, enabling a curated purchase and informed service experience. Global inventory availability also forms the core of omnichannel retailing. Inventory availability by location enables to meet the needs of customers from their most convenient point of purchase. Access to data empowers sales associates to have full mobile access to all this information so that they can be where the customer is and cater to their requirements.
Product curation is the most convenient setting for the customer whether that be in a location within the store or even the customers home. Enabling the real-time access requires an IT landscape that is unified. In short, what is needed is a digital core that can bring together the systems of engagement and systems of records seamlessly including point-of-sale, ERP, eCommerce, CRM and marketing to provide real-time mobile access. The goal is to ultimately get into a customer self-service model, which places the customer in control of their own interactions.
Secret #2 Unleash the power of your supply chain
Supply-chain can undoubtedly be considered the physical twin of an omni-channel digital platform. Every customer action, during the omni-channel journey, triggers an intricate web of supply chain processes in the background. For these reasons, an omni-channel experience can only be as strong as the supply chain supporting it.
Like technology adoption, the choice of required supply chain capabilities is unique for every organization, for that reason. In fact, the capability being described here is only intended to demonstrate how supply chain enriches the omni-channel journey. A decentralized distribution offers choice and speed to omni-channel execution. Achieving optimal distribution not only enhances the customer experience but also helps the organization to drive the inventory management and transportation cost down.
A dynamic pricing strategy on the supplier and customer ends of the spectrum allows omni-channel to respond quickly to trends in the market. The short cycles in retail and fashion industries mandate advanced scheduling and pricing capabilities. Advanced logistics and fulfillment capabilities in supply chain ensures that the right product is made available to the customer at the right time. Efficient forward and reverse logistics processes reduce the overhead per customer and in turn reduces the price for the customer.
Adoption of robotics and other advanced warehouse management tools have enabled omni-channel retailers to deliver quickly, maintain a low inventory and replenish effectively using smart warehousing capabilities. This makes experiences like same day or even same day delivery a reality.
Lean and just-in-time processes reduces waste and allows omni-channel to react quickly to changes in the demand and supply flows. Lean processes also lower the inventory and different costs associated with it. Integrated business planning enables the organization to utilize the data points generated from different omni-channel touch points to sense the demand accurately, plan the supply, and manage the fulfillment and replenishment effectively. The capability of supply chain to provide real-time visibility of inventory -- across retail stores distribution centers and in transit-- allows omni-channel to direct the customers to alternate locations and offer different delivery options effectively.
Secret #3 Understand your customer
One of the keys to a great omnichannel experience is taking the customers view of how they interact with us as a retailer. If we look at the structure of a retailer's business, there are different teams such as the store operations, eCom, marketing, and customer service. These teams are likely to use different systems to serve the customer. That being the case, it is important to understand who our target customers are and what their interests are when it comes to our products and services.
Many retailers we work with will create personas for their target customers. They will fully attribute the personas to define who they are and how they're going to interact with us. Next step would be to map the customers lifetime interaction journey with us for each persona. This involves walking through all stages from awareness, discovery, research, trust, trial, purchase, and after-the-sale service. Not just this, it also includes understanding both the content and mode of access for each step in the journey, what information is expected, and how the customer is going to access that information on the website, in-store kiosk, mobile device or while speaking with a sales associate. Retailers need to prioritize and sequence those steps in terms of where they want to start their focus-- curating the content, identifying the delivery mode, and determining what investments are going to be acquired at each step to provide this interaction seamlessly.
Secret #4 Unified process model
One of the greatest challenges of omni-channel adoption lies in the consolidation of disjoint processes along with the underlying applications and databases. As many of these channels have evolved with autonomy for some or all the processes, an end-to-end process refinement is necessary to align different groups towards a common goal. Even supporting IT frameworks reflect the same sort of siloed approach, making it difficult to have an end-to-end view of solutions that support the unified process model. Hence, creating an enterprise architecture function, which supports the end-to-end process and technology models would be highly beneficial. This function can also govern the technology investments while progressing towards the target state. The processes also need to be unified at supplier and customer relationship management level.
In a multi-channel organization redundancies and ambiguity exists across channels for the same process. For instance, it is possible that two channels have separate contracts with the same vendor or supplier. The information flows are also duplicated since the channels maintain separate partner and transaction records. Unifying the pipelines not only gives the organization, the economies of scale but also a central view of the product information and financial flows.
In a traditional multi-channel organization, channels have independent marketing strategies and even sales revenue targets. Sales closed in other channels have little to no impact on their own goals. In such situation there is there is really no incentive. For instance, an omni-channel strategy circles around the services and products of both a retail store and an online store. Retailers formulate such strategies to encourage customers to use the services of a retail store and familiarize them with the product while giving incentives to buy the same product using a mobile app. In this case, the retail stores incentives are not just tied to direct store revenue but also to the revenue from customers who have availed their services to make an informed decision using a mobile app.
The next part of the same strategy is achieving an organization alignment to progress in devising an omni-channel strategy. Strong leadership is a crucial success factor for the effective adoption of omni-channel retailing. The holistic nature of omni-channel transformation mandates commitment from almost every department in the organization. Depending on the scale of adoption, this transformation can have profound impact on the organization's culture and values. Due to the scope of business areas impacted, omni-channel retailing must start with the senior-most stakeholder level, otherwise the progress will be easily stalled due to peer level conflicts.
Omni-channel adoption could heavily influence the organization's long-term strategy and business architecture. Commitment from the executive team would go a long way in helping the entire organization adhere to the transformation plan. They could also help in revamping the value proposition and the KPIs to reflect real progress. Delivery is the engine that enables organization to steer towards its goals through systematic and timely improvements. Being responsible and agile is no longer just an option but a necessity to effectively support an omni-channel strategy.
Even though exploring ways to advance the organization's reach and grasp is essential, it is equally important to maintain the integrity of the core services and information. Different levels of stakeholders may be involved to develop and provide the capabilities to enable omni-channel strategy. However, the true adoption happens at the operations layer. Formulating an effective omni-channel experience may require business units to revamp the metrics based on which they operate. Necessary measures may also need to be taken to prevent sub optimization and conflicting interests between sales channels within the organization.
Secret#5 Technologies to accelerate the journey
Considering the pace at which the modern technologies are developed and adopted, if an organization is not disrupting the market, it is likely that they are being disrupted by someone else. Evaluating the value of technology adoption and investing in emerging technologies have become a common practice even among organizations whose core competency is not digital product development. The technologies and frameworks being discussed here are not meant to be prescriptive. Every organization must decide for itself about technologies that are best suited to tackle their challenges to achieve the goals they seek.
Understanding the customer is a key to achieving omni-channel success. Social media marketing and analytics are very efficacious in knowing customers on a deeper note. Advertisement campaigns are no longer delivered to the masses. Instead, they are targeted at individuals based on specific buying attributes. Omni-channel experience is about being constantly available to customers on different channels and devices. This exerts severe pressure on the organization's system to react instantly to customer requests. Migration of workloads to the cloud partly enables to fulfill customer demands more effectively as compared to on-premise infrastructure and is well suited for omni-channel systems.
Advancements in cognitive computing holds the potential to improve customer care and self-service flows. Similarly, IoT and RPI technologies have evolved well enough to automate warehouse and the entire logistics. Blockchain-based solutions offer ways to establish provenance and trust among global supply chain partners.
Secret#6 Build a feasible roadmap
Lastly, we need to build a feasible roadmap overtime and make improvements to it. A roadmap, essentially, needs to deliver business outcomes that transform us overtime to our end state. The execution plans need to overcome the barriers through effective change management. We need to prioritize and sequence the capabilities and the technology to enable them. We need to have a business case and should be able to measure the business results at each step off the roadmap.
From an organizational standpoint, we are best able to execute if we can create a single team that owns the customer journey from a strategy and vision standpoint. They would perform the customer journey mapping and define the handoffs of data and processes across the organization. They should also play a governance role in the planning and delivery of IT solutions to ensure the continued progress towards the end state. It is important to assess the longevity of our current platforms for POS, ERP, eCommerce and marketing. These may be some of the first things to address in the roadmap in terms of creating that digital core.
From a technology standpoint, cloud-based solutions can offer us faster speed-to-value. Such points need to be considered and weighed accordingly in our criteria. The road map should be digestible for the organization and should be broken down into agile deployments that can deliver incremental value to help fund the next steps of the roadmap that leads to a future state, enabling real-time access to the information to deliver the best omni-channel experience possible.
How does capturing rich data impact the strategy and the omni-channel implementation for a company against the backdrop of GDPR?
While there are growing regulatory constraints around how we manage customer data, it is always been a good idea as a retailer to be clear about how we are building trust and value for our customers. Of course, we are always looking to convert our casual customers into loyal customers where they will be willing to share with us their key information but retailers need to ensure transparency in the process. We need to add value for them so that they get back what they are divulging. When it comes to dealing with regulatory issues, customer information must be tightly managed, and it must be permission based.
How would you unleash the power of the supply chain through integrated business planning or real time inventory tracking?
Getting real-time inventory information is equally important for both manufacturers and customers alike. Let us look at the story of Amazon -- how Amazon has evolved its business model to reach the status of being a pioneer in the industry. Amazon's warehouses are situated closer to the cities compared to traditional companies with a central warehouse in a remote location. The distributed warehousing strategy centers around Amazon's ability to expedite order delivery.
Once a distributed warehouse is set in place, which allows the real-time view of inventory across all distribution centers or your hub-and-spoke stores or retail stores or places where goods are stored temporarily, there are tools that helps in achieving real-time inventory view across regions like the SAP Integrated Business Planning (IBP).
IBP helps in consolidating the requirements and receipts to plan out procurement and supply for meeting customer demands effectively. In any planning solution, there is a demand factor, which is the requirement part of the equation and then it tries to match that requirement to the receipt part, which deals with obtaining purchase orders from suppliers. SAP IBP orchestrates order fulfillment by connecting it effectively with the demand signals.
How does having anytime, anywhere data access add value for your customers?
One of the trends we are currently witnessing in store across retail is moving away from the checkout at the front of the store and having more of a tablet-based sales associate experience. It is a little bit richer by having access to that customer data including prior purchases, service history, and buying pattern. By knowing your customers intimately, it is possible to offer suggested selling.
The normal checkout at the front of a store does not take customers data or information into account. Instead, it is all about scanning products, totaling the sale and accepting payment. Whereas a tablet-based point-of-sale solution that has access to all the customer information, which may be used for upselling and cross-selling products. This can also be powered by artificial intelligence technology wherein sales associates will be able to interact better with the customer and provide them more than a meaningful shopping experience. For example, in a furniture store the customer can buy the sofa while sitting on the sofa in the store.
Can retailers benefit from cloud-based technology in retail?
Retailers can achieve improved performance, speed and agility with migration to cloud. Micro-service architectures and containerized deployments have made modern retail systems highly available and resilient. Cloud-based deployments have also made it possible to scale out their infrastructure considerably with ease to handle big seasonal loads with minimal investment and effort. Amazon is another perfect example of a retail organization, who had invested in cloud technology and advanced it to become the techn
ology pioneer with AWS. This has helped to position themselves as a key enabler of true and powerful omni-channel experiences for many other organizations.
For more information about implementing a successful omni-channel strategy, talk to our consultants.