Omnichannel Retail: Solving the Puzzle

Retailers today seek to deliver an inspiring, seamless brand experience to consumers across all channels — online, in-store, mobile, call centers and social media. For consumers, the promise of omnichannel retailing is a consistent brand experience based on easy, fast access to the information they need and the products and offers they want.

For retailers, it's about making that happen by unifying data and applications, managing transactions and customer engagement uniformly across the enterprise, and analyzing performance within and across channels, while simplifying the task of retail enterprise management. In essence, it's about enabling omnichannel visibility and functionality at both the front- and back-end of the business.

The rewards are substantial. Omnichannel customers spend at least 30 percent more than their single-channel counterparts. Customers delighted by their experience buy more, come back more and celebrate the brand more, and retailers that are better able to understand and respond to what's happening across channels can refine their planning strategies and merchandising practices more effectively to boost margins and reduce costs.

Attaining this omnichannel "nirvana" isn't an easy task, however. When retailers began to support multiple channels — each with myriad customer and operational needs — many were forced to deploy different technology platforms to address those requirements. With different channels operating as separate autonomous entities, retail operations become siloed, fracturing the shopping and brand experiences they were intended to support. Many retailers have been left with a legacy of inefficiency and lack of operational visibility, while their customers are frustrated by the effort it takes to simply get what they want when and how they want it. Today, that's a legacy no retailer can afford.

Start With Integration
To break free of that legacy, retailers must begin by enabling one view of the customer, one view of product and one view of orders across all consumer touchpoints by integrating core systems and functions.

Then integration must move beyond the one-view paradigm and address virtually all systems and processes — i.e., the extended omnichannel environment. Integration must include how orders are routed to stores and warehouses for ease of fulfillment. Integration points must extend to merchandising systems so available-to-promise inventory is accurate. One promotion engine should be established to service multiple channels, along with one CRM system to collect and process shopping and purchase data from all channels.

The list is endless, but the potential sharing and reuse of people, processes and technology that can be achieved through an integrated channel strategy can greatly improve a retailer's cost structure. That's the role integration plays — making the parts greater as a whole.

Retooling Point of Sale
Point-of-sale (POS) systems have always served and continue to serve as the primary sales transaction system, but in recent years the addition of more advanced features and functionality, including mobility, have re-engineered POS solutions for the omnichannel retail world. Clunky registers are being replaced by sleek iPads and other tablet devices, which empower store associates to deliver an efficient, personalized and thoroughly inspired customer experience. With access to rich, value-added customer and product information, store associates can offer more value-added consultative shopping experiences by recommending products and even by sharing online experiences such as videos and reviews in-store.

Cross-channel order visibility, status updates and stock locator queries, executed by both associates and consumers directly, enable retailers to offer the fruits of the "endless aisle." Enterprise selling or "save the sale" functionality ensures shoppers’ needs can be met from anywhere across a retail enterprise. Customer satisfaction levels remain high as needs are quickly met and shoppers are assured with detailed timing as to when their purchases will arrive. Likewise, retailers increase revenues, address demand and maximize inventory turns.

However, to support sales and reverse logistics in the omnichannel retail era, inventory accuracy is critical. Managing inventory strategically and cost effectively while catering to the "instant gratification" needs of today's consumers is no easy task. Having the ability to monitor sell-through and transaction-level information is key to aligning purchasing with what consumers want in-store and online.

Next Generation E-Commerce
Digital channels (mobile, web, social) have become key sales and service vehicles as consumers increasingly search, purchase and ask for help online. In recent years, it's also given rise to two new trends in retail: showrooming (i.e., visiting a store to view a product then going online to purchase it) and webrooming (i.e., researching products online and then visiting a store to make a purchase).

Showrooming and webrooming represent important shifts in how consumers shop, and retailers need to ensure they're on the "right side" of these trends. Savvy retailers understand that by providing a truly integrated customer experience across all channels, they no longer need fear webrooming and showrooming. Instead, they can view these practices as tremendous opportunities to provide a more personalized shopping experience and unite the physical and digital retail worlds.

In today's omnichannel retail environment, brands must use unified e-commerce platforms to bridge the gap between traditional e-commerce and other sales channels. Doing so enables consumers to interact and transact with their favorite brands seamlessly. Today's next-generation e-commerce solutions integrate with physical stores (POS), mobile devices, call centers, kiosks and social media to improve engagement through personalized sales, targeted promotions, recommendation engines and much more. They also enable capabilities such as shop online, pick up in-store and save the sale in order to fulfill in-store customer needs from any inventory location.

Customer Engagement and Analytics
Today's omnichannel customers want retailers to know who they are and what they want, and to be able to fulfill their needs with the products they desire. That's why today's retailers are leveraging powerful new business intelligence (BI) and analytics capabilities to add a whole new art and science to the adage "know thy customer," while improving performance with more customer- and channel-specific planning and merchandising.

BI and analytics augment CRM efforts by adding rich analytical tools to analyze customer behaviors, helping to uncover key trends and opportunities for dramatic improvements by leveraging insights. While traditional retailers forecast forward demand on trend and seasonality, the use of powerful BI and analytics enable them to understand the needs, wants and motivations of their customer demographics to fine-tune pricing and product selection for both greater appeal and profits.

With better planning, retailers are able to limit out-of-stocks and overstocks, and they improve inventory management and markdown optimization. When more consumers find exactly the products they want, more goods go out the door rather than remain on the sales floor.

Improving Time to Value
Cloud retailing is helping to make integration efforts easier as well as improving the time to value of omnichannel initiatives — and technology deployments as a whole. Indeed, we're moving to a "cloud first" orientation. A large majority of retailers now have at least one application in the cloud and are looking to leverage cloud capabilities across as much of their technology footprint as possible. Cloud implementations remove IT complexity, shorten time-to-value and overall project success rates, and enable retailers to move multiple omnichannel initiatives forward quickly.

Ready, Set, Go!
Omnichannel retailing can be daunting — especially when just getting started — but the following steps will help most retailers map out a good game plan:

• Start with a platform that enables one view of customers, products and orders.
• Retool your POS system to include mobile touchpoints.
• Fill in the gaps between e-commerce and the rest of the enterprise.
• Leverage analytics and cloud computing as force multipliers for omnichannel initiatives.

At the end of the day, inspired omnichannel retailing isn't about how many channels you have. It's how you make use of them that really matters — from a retailer's perspective and, more importantly, from your customer's perspective.

Ian Rawlins is vice president of marketing and business development for Epicor Retail, a provider of extended omnichannel solutions for mid- and large-sized retail chains. Ian can be reached at irawlins@epicor.com.