5 Foundational Blocks Behind Omnichannel Success
Many retailers approach omnichannel as a front-end strategy that's built one feature at a time (some deliberately and others by default). For example, a retailer may deploy ship from store in a vacuum and then embark on reserve in-store, without truly realizing multiple overlapping benefits. In reality, successful omnichannel businesses focus equally on their back-end applications as well as front-end channels. Attempting to enable front-end functionalities without robust and scalable technology platforms will lead to increased costs of operation, higher customer dissatisfaction, reduced revenue and supply chain nightmares.
The secret to omnichannel success lies in five key areas that act as foundational blocks in implementing a true seamless shopping experience. The five areas are:
- 360-degree customers insight;
- consolidated product catalog;
- cross-channel inventory visibility;
- fulfillment and logistics; and
- distributed order management.
360-Degree Customer Insight
Technologies have made it possible for companies to collect massive amounts of information about consumers by integrating customer data from multiple communication channels. However, gathering data is only half the challenge; the other half is to properly understand and use that data to make business decisions.
To implement a 360-degree view of the customer, retailers have to explore ways to capture data (e.g., e-receipts) and use APIs to collect browsing/shopping patterns and loyalty program usage, connecting data feeds from stores and digital systems while constantly updating universal customer profile data immediately when a transaction is made. A complete customer picture can be derived from linking purchase histories, interaction histories and insights gathered from across retailers’ multiple brands, channels or business units. These elements, combined with syndicated data such as demographics, gender and discretionary income, provide retailers with a very detailed picture of customer buying potential, behaviors and predictions towards a given lifestyle, product line and even sensitivity towards price ranges.
Innovations such as big data-based listening and sentiment mining take customer reviews to a whole different level of granularity and clarity. For enhanced understanding of customer behavior, insights can be combined with a customer's core profile. Harvesting useful insights from such a holistic knowledge repository opens new frontiers for customer engagement. A powerful set of analytical tools built on top of the customer capture repository will help retailers infuse customer insights into their merchandising, marketing, e-commerce, mobile and social processes.
Newer features like providing correct product recommendations, localized assortment of products in-store, and targeted marketing campaigns will be enabled using this data.
Consolidated Product Catalog
Successful omnichannel retailing depends on having a single catalog regardless of which channel a product is sold in. Moreover, sharing product data is a foundational component of providing a more relevant shopping experience for consumers no matter where they choose to shop. The key is maintaining a single product ID and having the rest of the product information (related to both stores and online) as part of its attributes. This would easily fit into the existing ecosystem of NoSQL databases. The existing systems that a supplier or product owner uses to create new products and content — via content management systems — can be easily leveraged to integrate with the database and enhance the legacy systems to include rich product attributes.
This will result in a single product catalog in back-end systems that remaining systems can leverage. Then, create an omnichannel Lookup API that can access the new catalog and return information related to the respective channel. This API will return all available information related to the product, including its availability, price in-store/online and any promotions available. This not only empowers consumers, but also store associates to provide better customer experience, guiding individuals in product selection based on their needs and preferences. Furthermore, consumers who are shopping online can easily know if the item is available at their nearest store to pick it up the same day or have shipped to their home.
Cross-Channel Inventory Visibility
To compete for sales, retailers should gain control of real-time inventory along with rich product information. Maintaining cross-channel inventory will empower retailers to do advanced analytics such as predicting future demand based on past performance and also provide a breakdown of products sold at various channels by region. Cross-channel inventory sharing opens up the door for various omnichannel features like find in-store, ship from store, and order in-store. Inventory will be one more attribute in the product catalog, and can be leveraged to use the same NoSQL database without redesigning from scratch. As cross-channel inventory is part of the product catalog, it can use the same set of Lookup APIs and API Economy when talking to services requesting information or partnering with third-party retailers or social media platforms.
Fulfillment and Logistics
When talking about omnichannel customer experience, it's important to have seamless order fulfillment across channels. The four primary disciplines for fulfillment are orders, shipment, payment and returns. In the omnichannel world, they've become more complex and more tightly integrated to serve consumer demands of flexible delivery options, flexibility of timing, freedom from shipping charges and flexibility of returns.
Instead of building isolated processes and infrastructure that don't scale for unanticipated requirements, it's better to embrace an adaptable back-end system that can support ever-growing and changing fulfillment requirements. Omnichannel fulfillment (e.g., click and collect) has to be carefully engineered, with the retailer holding the perfect amount of inventory on a wide assortment of products, along with ensuring that the right inventory is available at the right store (demand based on geographic locations).
The key is to have the right WMS solution that allows for complex slotting and supports a granular understanding of what it costs to fulfill orders by SKU, by customer and by channel. WMS is a way to improve distribution center and store-level inventory accuracy and expand support for omnichannel features like buy online, pick up in-store; buy online, deliver from store; and buy online, return in-store.
Distributed Order Management
With cross-channel integration capabilities, distributed order management solutions allow customers to order and return from anywhere, and retailers to fulfill from anywhere. Implementing a truly distributed OMS, cloud-based document object model provides retailers a platform backbone capability, enabling the sale, replenishment and logistics processes for multiparty business transactions across multiple tiers in a supply network. In other words, it's an e-commerce engine, providing a network-based solution for managing information, executing processes and monitoring performance to ensure customer orders are fulfilled accurately and cost efficiently across a complex network of sourcing and fulfillment processes.
Brad Chivukula is a technical project lead and data manager at Nisum Technologies, a global consulting firm that advises companies about strategic IT planning, agile enablement and other business processes.