MULTI-CHANNEL RETAIL INTEGRATION. Extended Customer Convenience

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1 Extended Customer Convenience This Whitepaper offers a framework to develop strategy for Integrated Multi Channel Retailing. This paper explains how the integration works in a Multi Channel scenario.

2 It s not about being a great Web retailer and trying to focus on the Internet. It s about being a multi-channel retailer and asking how you can use your Website to have a better relationship with your customers. Jamie Nordstrom, president of Nordstrom Direct, in an interview with the Seattle Post-Intelligencer, September 15,

3 Is your current model focused on extended customer convenience? Cross channel should not be complex channel Best-in-class retailers understand the brand value of a multi-channel offering: consistency and efficiency across all the channels. Top performers wrap their brand identity around fulfilling customer expectations for seamless purchase and delivery options across channels. They ensure product information and pricing is up-to-date and consistent across channels. Their overall strategy is to create a single-brand identity across channels. Retailers realize that multi-channel shoppers can be up to three times more profitable, and they purchase 27 percent more product with each shopping trip, than single-channel shoppers. Customer Conveniences Extended in all Channels Customers choose the channel through which they prefer to buy and how the retailer services the customer effectively through various sales channels. Customer can order through Web, stores, through mobile etc., or can collect the product through courier or directly. Retailers should efficiently integrate the channels for Customer Orders, Inventory Allocation, Pricing,Promotions & Offers and Delivery. Best-in-class performers are more concerned about channel conflict and take specific organizational steps aimed at ensuring conflicts do not occur, including a much stronger emphasis on changing the organizational structure to be brand-specific rather than channel-specific. 2

4 COMPLEX BUSINESS PROCESSES IN MULTI CHANNEL WHICH ARE NOT INTEGRATED Separate cost of inventory holding for cross channels Separate merchandise hierarchy for each channel Un-availability of common data base for products, vendor s and customer details. Separate customer order capturing leading to expensive cost and time Separate fulfillment & distribution strategies for channels Ineffective measuremeant on efficiencies of cross channels when its operates independently CONSTRAINED TECHNOLOGY PROCESSES IN NON-INTEGRATED CHANNELS Each channel is separate in Technical architecture and key performance indicator Integration across system is expensive and operational difficulties Maintaining the legacy system is manned and time consuming System deployed across channel is not equivalent in terms of flexibility and functionality Web Channel system is web application which may or may not be connected with Back Mobile Channel synchronizes with Middleware and linked to multiple the Back-end systems 3

5 FOCAL AREAS FOR INTEGRATED MULTI CHANNEL OPERATIONS Centralized Order Fulfillment Common merchandise data base for item data, hierarchy across channel Merchandising operation through integrated platform for Pricing, Promotions and offers Corporate wide CRM Offer consistent Pricing and Promotions Choice for customers to order through any channel and pick at any channel. Distributed Order Management, consolidates all channel order and fulfill from Distribution center on Put away stocks and cross-dock stocks. Re allocates & Re distributes the stocks based on demand in the channels Transport planning for courier to customer in web/ mobile/ Store channel sales. Customer returns on any channel is accepted irrespective of the channel that was the purchase made on, and is accounted in Inventory through POS or Web Payment gateway. Customer returns through Web/Mobile, the web/mobile should accept the returns as a separate transation or along with shopping list of purchase. Supply Chain Synchronization Integration to store pickup order, inventory and billing Vendor to supply for all channels. Visibility of inventory in all channel Near real-time POS data for inventory position for accuracy Ability to update channels on stock out items Ability to transfer the store pickup orders to delivery order if stock out Merchandising planning Demand planning & forecasting for web / mobile / direct store Regular Ordering system for different categories Category sales planning for all channels and contribution to total financial plan New Product introduction in all channels Inventory planning for all channels based on the sales trends. ( min /max/ re order) Visual images selection for SKU for display in Mobile and Web. 4

6 Customer Profile Single window registration for all channels Common Identity for every customer / family across the channel All channel bills pertain to customer to integrate in common database. Schemes on rewards, pre calculated value before merge into common database Metrics and Measurement Measure across channel for consumer growth & satisfaction Effective loyalty program to track across channel Surveys to gather additional insight across channels Measure by Category and not by channels Inventory reports on efficiency in utilization of inventory across channels Category Performance reports across channels Marketing analysis reports to add value in all channels & enhance customer experiences and conve niences 5

7 ITC INFOTECH S SOLUTION APPROACH FOR MULTI-CHANNEL INTEGRATION ITC Infotech in partnership with Retail Pragmatists offers a solution framework to help the Retailers manage and exploit the synergies of multiple channels. We offer a multi channel maturity model enabling retailers to identify their current and desired position on the industry wide model, and create a pragmatic action plan to get quickly to their desired state, at low cost. OUR KEY DIFFERENTIATOR IN MCI We work with our clients to integrate retail channels including communication, transaction, and physical logistics to achieve - A consistent, customer journey across all touch points - am IMRG recognized top three challenge for many aspiring integrated retailer We have deep experience of fulfillment, delivery and returns performances improvement programs We are specialists and leaders in direct marketing (DM) and customer relationship management (CRM) programs including: - customer segmentation, demand generation leveraging cross channel synergy in up-sell and x-sell, maximizing campaign yield, customer engagement and retention, automated campaign management We are experts in order to cash management improvement programmes: - Improve demand conversion, reduce returns rates, and improve customer satisfaction We have a proprietary multi-channel engagement tools which: - establishes client capabilities across the entire organization, - quickly refines strategic ambition - identifies gaps between capability and ambition - establishes consensus on direction and - creates a prioritized action plan This can be used: - At the start of strategic development OR - To audit effectiveness and likelihood to deliver of plans in development We have a proprietary customer journey model which: - Considers customer thought process at each step of the journey - Identifies Process and IT based opportunities - Ensures a thorough integrated strategy maximized for customer impact 6

8 Stages to Develop into an integrated Retailer We deploy our integrated retail maturity model to identify opportunity areas This helps identify and gap all alignment issues to address Every retailer is different- our route maps contain all the options, color coded in priority order for driving sales Choices cab be made quickly when all options are presented 7

9 OUR SERVICE OFFERINGS FOR MULTI CHANNEL INTEGRATION Multi-channel retail integration roadmap Establish consensus view on the way forward Customer journey diagnostic- develop bespoke models Channel/ Product/ Customer/ Supplier profitability Direct Marketing and Customer Relationship Management expertise to develop bespoke activities and transfer/ embed skills Change management programme About ITC Infotech ITC Infotech was set up in October 2000, and today ranks as one of India s fastest growing integrated IT s e r v i c e s p r o v i d e r s i n I n d i a. I T C I n f o t e c h s e r v e s F o r t u n e - c l a s s c l i e n t e l e a c r o s s A m e r i c a, E u r o p e, Asia-Pacific and Africa. At ITC Infotech, we believe our core service differentiation lies in the businesscentric focus we bring to IT services delivery, and in our commitment to structure each of our relationships around our client s unique business needs, priorities and context. Our services today span across verticals such as Manufacturing, Consumer Packaged Goods, Retail, BFSI, Travel, Hospitality & Transportation, New Media and functional areas such as ERP, CRM, Trade Marketing and Distribution, Product Lifecycle Management, e-business, Supply Chain and e-procurement, etc. Headquartered at Bangalore, we operate two wholly owned subsidiary corporations in the USA and the UK, and state-of-the-art delivery centers with over 2,600 employees. Our global delivery capabilities encompasses delivery centers in India, US, UK, Denmark, Finland and The Czech Republic. 8

10 ITC Infotech is a 100% subsidiary of ITC Ltd. ITC Ltd. is rated by Forbes magazine as one of the World's leading companies, and is one of India s top five private sector companies with revenues over USD 4.75 billion and market capitalization of over USD 18 billion. ITC Ltd. is diversified corporation with business lines spanning information technology, agro-based industries, consumer products including apparels, personal care & food products, travel and hospitality, and paperboards & packaging. Various leading research and industry analysts have written about the ITC Infotech service offerings. Some of the analyst reports are: According to Forrester Research, ITC Infotech is Amongst the top offshore SAP players. The report says.strong expertise in the logistics and CPG arena make it a compelling candidate for SAP work. Also, it is more focused on discreet SAP testing services than any of the other vendors profiled. For customers in need of top-notch SAP technical skills in the logistic and CPG arena, ITC is a strong choice. Global Services has rated ITC Infotech amongst the Top 10 Specialty Application Development providers for three (3) consecutive years. AMR Research shortlists ITC Infotech amongst top 11 offshore players in Testing services Gartner rates ITC Infotech as leading Infrastructure Services providers globally. Forrester Research rates ITC Infotech amongst the top Infrastructure Services providers from India G l o b a l O u t s o u r c i n g r a t e s I T C I n f o t e c h a m o n g s t To p G l o b a l O u t s o u r c i n g C o m p a n i e s, featuring in the Leaders category. About ITC Infotech Retail Vertical Practice The Retail practice at ITC Infotech is one of its fastest growing practices, and today has multiple active global engagements across the globe, including some dedicated multi-shore relationships with the largest retailers in the world. Combining strong retail industry understanding and global IT delivery capabilities our mission is to help r e t a i l e r s k e e p p a c e w i t h r a p i d t e c h n o l o g y c h a n g e s, w h i l e e x t r a c t i n g y e a r - o n - y e a r v a l u e f r o m l e g a c y i n v e s t m e n t s a c r o s s a d i v e r s i t y o f t e c h n o l o g i e s, e n s u r e a g i l e r e s p o n s i v e n e s s t o c h a n g i n g a n d ever-demanding business environment and help the CIO build a scalable technology organization that can retain both flexibility and efficiency, as global retail business realities evolve. W e h a v e i m p l e m e n t e d, c u r r e n t l y s u p p o r t, a n d m a i n t a i n S A P f o r R e t a i l e n v i r o n m e n t f o r o u r Group Retail businesses and SAP R3 environments across multiple other Group companies and the C o r p o r a t e o r g a n i z a t i o n. O u r r e t a i l - s p e c i a l i s t p a r t n e r e c o l o g y a l s o b r i n g s t o t h e t a b l e h a n d s - o n experience of having managed the world s largest SAP Retail implementations to date, including implementation and integration of the Triversity POS. 9

11 We have delivered multiple complex portal development projects, addressing retail value chain needs from Supplier Relationship Management to ecommerce. We provide remote infrastructure support to Fortune 500 global businesses spanning across 140+ geographies, providing 24/7 remote support for 38,000+ desktops/ laptops and 1,400+ servers. Our services footprint also covers Datacenter support and management, Mail and messaging, consolida tion and rationalization initiatives and SLA-based global shared services provisioning. We have designed and delivered complex data warehouse support, migration and enhancement projects as well as Data Quality, ETL/migration and Reporting projects of various nuances across multiple DW, Db, and Tools. We have built and currently operate large-scale, multi-shore, dedicated delivery centers for the biggest global retail businesses in record-breaking timelines. We have very strong capabilities around Siebel/Oracle CRM, ranging from being a pioneer in the complex area of Loyalty implementations for Airlines industry to having successfully delivered one of the largest implementations for handhelds on Siebel to propel sales force productivity. 10

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