Winning the Omnichannel Retail Arms Race: 5 Keys to Success in 2013 and Beyond

Not long ago, I bought a chandelier in a retail store, supplying my email address and other information. Back home a few days later, I ordered a set of matching sconces through the same retailer's website. When I opened my order confirmation email for the sconces, I was dismayed to find the retailer recommending the very chandelier I'd bought in-store — at a 50 percent discount!

How could this retailer's web storefront not know what its brick-and-mortar storefront had already sold me? Does my business mean so little to this retailer that it doesn't care what kind of experiences I have with the brand?

You've probably had similar experiences and thoughts. They're not uncommon, as many retailers run siloed and disconnected systems for e-commerce, in-store sales, call centers and back-end enterprise resource planning. These systems were designed to support the old retail world in which customer relationships consisted of one-channel conversations between businesses and consumers.

Organizations managed the rise of e-commerce by bolting internet capabilities onto existing architectures. As a result, these systems are arranged around point solutions, creating multiple siloes of disparate data sets. They present fragmented views of the customer. They have no single system of record for transactions, customer activity or cross-channel inventory. Unable to provide a foundation for customer-centric innovation, these implementations inhibit the abilities of IT and marketing to experiment and improve the customer experience through new solutions.

These spaghetti commerce architectures are a corporate liability in today's age of smart and savvy consumers who expect a consistent and relevant brand experience. Unlike the shoppers of yesteryear, today's consumers demand dynamic interactions over numerous retailer touchpoints, from in-person or call-center transactions to online sales via laptops, smartphones or tablets. Without these omnichannel touchpoints, companies risk customer dissatisfaction and a steady, long-term erosion of brand value.

The drive by savvy retailers to differentiate themselves in 2013 and beyond will compel them to engage in an omnichannel "retail arms race" to deliver the most advanced, customized experience across all touchpoints with customers. Forward-looking IT departments will confront the challenges of integrating new capabilities by future-proofing their commerce architectures.

The smartest merchants are getting a head start in the arms race by embracing next-generation cloud solutions, purpose-built to deliver five key capabilities for omnichannel commerce:

1. 360-degree view of all customer interactions: With the right approach, retailers can view all interactions on demand to better serve customers. For instance, a sales associate can view an in-person customer's purchase history on her iPhone, addressing issues, guiding cross-sell opportunities and enriching the customer experience.

2. Real-time global inventory availability: Showing web shoppers what's available in-store and online is fast becoming a mandate, but in-store employees need access too. A tablet-wielding associate can "save the sale" on the store floor by quickly determining that a product out of stock in her store is available 10 miles away.

3. Multi-everything support: A flexible architecture is needed to support all devices and channels, as well as multisite and global commerce. As the world continues to shrink, retailers have a golden opportunity to expand business beyond borders with commerce solutions that localize content and automate multicurrency transactions and international tax compliance, running country-specific sites from a single commerce instance. At the same time, the architecture must allow all these touchpoints, applications, data sets and business processes to roll up to provide a holistic view of everything the brand touches.

4. Industry-standard customer experience tools: Along with responsive web design, IT, merchandising and marketing teams need an architecture that supports industry-standard tools such as HTML, CSS and JavaScript. Free of the constraints of proprietary technologies, design teams can optimize the customer web experience with pixel-perfect design and features such as zooms, alternate images, quick views and more functionality.

5. Rock-solid data security: The traditional approach to securing customer and financial data is to lock it behind a firewall, but omnichannel commerce is conducted from anywhere via the cloud. Designed to be online, the best cloud solutions deliver security far more safely than legacy operational systems adapted for the internet.

Is all this just a twinkle in your chief information officer's eye? Not at all; the omnichannel arms race is on. These capabilities are being turned into competitive advantages by innovative retailers while less-nimble rivals watch market share erode. To quote the science fiction writer William Gibson, "The future is already here … it's just not very evenly distributed."

Andy Lloyd is the general manager of e-commerce products at NetSuite, a provider of integrated web-based business software solutions. Andy can be reached at alloyd@netsuite.com.