Whitepaper arvato Systems Order Management (OMS) Delighting the connected customer: 7 best practices for cross-channel commerce success

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1 Whitepaper arvato Systems Order Management (OMS) Delighting the connected customer: 7 best practices for cross-channel commerce success

2 Executive Summary To establish, consolidate and grow a retail business in the 21 st century, it s increasingly necessary to break down the barriers separating the processes and infrastructures that support online and physical store operations. That s because today s customers shop online, in-store, and via mobile devices sometimes simultaneously! And they don t just expect the experience to be the same whichever channel they use, they also expect it to be integrated. That means, for example, being able to order online and pick up in-store, return an online purchase to a local branch, or use a shop-bought voucher via a Web shop. But these are just a few examples of the scenarios retailers need to manage effectively and efficiently to stay competitive. This document identifies 7 key best practices for delighting customers in the age of cross-channel commerce: 1) Enabling consistently individualized customer experiences 2) Increasing stock and order management transparency 3) Supporting maximum customer convenience 4) Empowering sales and service personnel 5) Enabling secure, flexible payments 6) Streamlining order management 7) Delivering truly international service The benefits of implementing these best practices can be felt by your organization in enhanced customer loyalty, higher conversion rates, more sales and revenue growth. What s more, they can be realized by implementing a modern cross channel order management solution that: Connects easily with your existing infrastructure Is scalable, and built with international expansion in mind Is modular, and therefore fast and cost-effective to deploy arvato OMS a product from arvato Systems Copyright 2013 Seite 2

3 Foreward: Delighting the connected customer Meet Gabriela. She s a young professional woman in her late 20s with a university degree and an above average disposable income. After starting her career in her native Barcelona, she has been living in London for the last 3 years and has recently set up her own consultancy business. As well as being a mobile citizen (geographically and economically), Gabriela is also a digital native. The Internet, mobile devices and social media are as natural to her as TV and a home telephone were to her parents. That s not to say she uses these new technologies and media in isolation. Quite the opposite. Increasingly, Gabriela expects her digital and physical worlds to be intertwined in every aspect of her life especially when it comes to consuming products and services. As a consumer, Gabriela expects her shopping experiences to be highly relevant she has neither the time nor the patience to wade through dozens of s, ads or other promotional materials offering her great discounts on irrelevant products. She wants to be treated consistently as a known individual, whether she s browsing a web shop or flicking through racks of clothes on the high street. And of course, she wants the convenience-, speed- and quality of service that make shopping a pleasure rather than a chore. Gabriela is a long-time customer of her favourite clothing store, Estilo*, a Spanish clothing retailer that has entered the UK market via a flagship store in West London. So, what does it take for Estilo to impress a customer like Gabriela? *Estilo is a fictional company, with no similarity to any real-world organization intended arvato OMS a product from arvato Systems Copyright 2013 Seite 3

4 7 best practices for cross-channel commerce success 1) Individualized offers Gabriela s experience It s Saturday morning and Gabriela is in her kitchen at home with a coffee, browsing Estilo s UK website. After logging in with her customer details, she is immediately presented with a range of items that are likely to be of interest based on her purchase history and which reflect her colour preferences, garment size and favoured brands. Challenges for Estilo Really understanding customers requires a comprehensive but efficient approach to collecting, storing, analyzing, interpreting and presenting information. Key challenges for the retailer include: Consolidating customer information from multiple online and online sources into a single source of the truth Making the information available across multiple access points and geographies Having access to easy-to-use but sophisticated analysis tools that generate actionable customer insight Presenting customer information in a clear, comprehensive way that is simple for managers, customer service and sales personnel to interpret and use Feeding that information into online and in-store customer interfaces Solution Supporting a cross-channel commerce operation effectively is only possible if customer data is consolidated within a central hub. Estilo has implemented a technology-agnostic platform that can accept the entry of multiple types of data in different formats from a variety of heterogeneous systems into one central and easy-to-use management portal. In addition, accessing that data is straightforward, thanks to customizable reporting tools that enable data for specialized systems to be presented in the most effective ways for different audiences from call center workers to senior managers. Benefits For Gabriela: Gabriela only receives offers that are relevant to her based on her demographic profile and purchasing history. This saves her time when selecting products, and makes her feel recognized and appreciated as an individual. The result is a more enjoyable shopping experience that connects her more closely to the brand. For Estilo: By tailoring offers more closely to Gabriela s preferences, a sale is more likely. Not only that, a 360-degree view of customers makes it much easier for sales people to cross- and upsell additional products to her. At the same time, her satisfaction and loyalty are increased, improving customer retention. Gabriela is also more likely to refer friends to Estilo, reducing the cost of customer acquisition and increasing sales. Finally, having access to a single source of truth about customer purchases, Estilo can adjust its product selection and stock levels more accurately, reducing the risk and costs associated with unsold inventory. arvato OMS a product from arvato Systems Copyright 2013 Seite 4

5 2) Increased stock and order transparency Gabriela s experience One of the items highlighted on Gabriela s personalized Estilo homepage catches her eye a stylish business suit that would be perfect for an important meeting she has with a prospective customer on Monday. Clicking on the item, she can see at a glance that the suit should be in stock in her size at her local Estilo store. But she decides to use the online store s web chat functionality to make sure. Challenges for Estilo To ensure customer satisfaction and build a reputation for consistently reliable service, transparent and accurate order and stock information is essential. Key challenges include: Integrating online and physical store order and inventory management systems Ensuring all sales people have anytime access to complete, up-to-date customer profile and purchase history information Integrating customer relationship management with order management and marketing automation systems to enable customer specific offers to be executed in real time Solution Estilo s cross-channel commerce infrastructure features a stock management system that differentiates physical from virtual stock but handles it all from a single interface. It can also process updates from multiple warehouses and stores, and can even manage non-inventory stock such as gift cards, vouchers, downloads, flyers and brochures. This allows, for example, customers to be informed instantly if an item is in stock, or notified automatically when an out-of-stock item becomes available. Benefits For Gabriela: She gets maximum peace of mind and convenience in terms of order fulfillment, while simultaneously saving herself time and money by eliminating wasted trips to stores without stock. For Estilo: Ensuring inventory information is always accurate and up to date for customers and sales people builds customer trust, and increases satisfaction levels. It also enables sales teams to be more effective in closing sales and opens up core-, cross- and upselling opportunities across all channels. Ultimately, all of these factors contribute to maximum revenues for the retailer. arvato OMS a product from arvato Systems Copyright 2013 Seite 5

6 3) Maximum customer convenience Gabriela s experience While she is double checking availability of the suit in-store via the website s click-to-chat function, the online sales assistant informs her that if she buys in-store today, she ll get a 10% discount. That s perfect for Gabriela, because she is meeting a friend for lunch in town anyway, and she can have the suit in time for her business meeting on Monday. Plus, the saving she is making will help pay for her meal! She clicks on reserve and collect. Challenges for Estilo: Enabling this scenario is all about seamless integration of the processes supporting online and physical stores. Key challenges include: Implementing integrated order and inventory management Replicating/aligning payment processing and policies Aligning collection and returns policies Solution Estilo s cross-channel commerce infrastructure features an easy to use, automated stock and order management portal that helps ensure customers are correctly informed about product availability. It also enables in-store staff to fulfill orders placed online quickly and efficiently. This includes the integration of order data with in-store scanning systems that match online orders with in-store items. This in turn ensures customer purchase data is accurate and complete across channels, further improving the quality and accuracy of customer data. Benefits For Gabriela: She receives her product at her convenience, not that of the retailer, and more quickly than if she were to complete an online-only purchase. She also benefits from a lower price that makes her money go further, and gets more value from a trip she was making anyway. Finally, there are soft benefits such as the confidence she will feel when attending her important meeting on Monday. All of these factors will make her happier with her overall shopping experience and more likely to purchase from the retailer again in the future. For Estilo: By aligning purchasing opportunities with what is most convenient for Gabriela, the retailer is strengthening the customer relationship and increasing loyalty. Enabling in-store pickup also opens up the opportunity for additional spontaneous purchases and selling opportunities. The elimination of customer delivery costs also contributes to competitive advantage through enhanced satisfaction and the option to lower prices to increase sales volumes and market share. arvato OMS a product from arvato Systems Copyright 2013 Seite 6

7 4) Empowered service and sales personnel Gabriela s experience Gabriela walks into the store later the same day and is greeted by a sales assistant with a tablet computer who asks Gabriela for her name. After bringing up her details on the device, the assistant gets an at-a-glance overview of Gabriela s purchase history. She sees the suit that Gabriela has reserved and guides her quickly through the store to the appropriate rack. Gabriela tries on the suit and is thrilled to find that it looks even better than she expected. The assistant agrees and selects a matching blouse and shoes for a professional but stylish look. While the blouse is not the right size, a quick message to the stock room via the tablet ensures the correct item is brought up to the shop floor within a few minutes. Challenges for Estilo: For Gabriela, shopping in general, and clothes shopping in particular, is still a personal experience. She values fast, efficient and knowledgeable sales staff, as well as a second opinion she can trust. This expectation needs to be met effectively. At the same time, it s important for the retailer to maximize the revenue opportunity from her visit. Key challenges include: Providing sales assistants with the right tools to access information and get products delivered without leaving the customer s side Ensuring stock information and customer service tools are easy and fast to use Solution In addition to centralizing its customer information within a cross-channel commerce management solution, Estilo has implemented a module that features a cockpit style customer service portal. This enables staff to access information and make order requests quickly and easily from multiple devices. Benefits For Gabriela: She gets a more intimate shopping experience tailored to her purchasing profile, current requirements and possible additional wants or needs. The personal and fully-informed attention she receives from the sales assistant gives her a faster route to her chosen items, and intensifies the sense of recognition and appreciation that she already felt via the web store. arvato OMS a product from arvato Systems Copyright 2013 Seite 7

8 For Estilo: With the tools to make their job easier, staff are both more productive and more satisfied in their work. Their engagements with customers like Gabriela are initiated from a position of strength, enabled via access to comprehensive information. They can use this information to complete the sale and increase its value by recommending other relevant products. Enabling deeper online and in-store experiences multiplies the customer loyalty effect, simplifying and reducing the overall cost of customer retention and contributing to higher sales volumes through repeat purchases. 5) Secure, flexible payments Gabriela s experience At the cashier s desk, the discount Gabriela was offered online is automatically deducted from the price of the suit, and her order is completed. Gabriela leaves the store with an entire outfit, having spent not much more than she would have paid for just the suit had she ordered online, or visited the store without visiting the website first. Challenges for Estilo Enabling payment flexibility must be balanced by ensuring business risk is minimized. Key challenges include: Confirming offers are only redeemed by the intended recipient, regardless of how they are initiated or redeemed Aligning payment policies across channels Ensuring complete security of payment information wherever it is stored and however it is accessed (e.g. via an in-store terminal, mobile device, or Web shop) Solution Estilo s cross-channel order management solution supports multiple payment methods and integrates web-, mobile, and in-store systems seamlessly. Customer payment details are stored centrally in a secure database and there is also a direct interface to external risk management systems, preventing fraudulent activity by rogue or insolvent customers. Benefits For Gabriela: She gets maximum value from her shopping experience and budget, greater convenience by being able to use internet and in-store offers interchangeably, and the peace of mind that comes with maximum data security. This helps her trust the brand more fundamentally. For Estilo: Payment flexibility and an integrated online/in-store infrastructure deliver benefits in the form of higher conversion rates (fewer abandoned shopping carts and transactions), streamlined payment processing, greater customer loyalty and more cross-selling/up-selling opportunities that drive sales and revenues. arvato OMS a product from arvato Systems Copyright 2013 Seite 8

9 6) Streamline order management Gabriela s experience A few days after her successful meeting, Gabriela decides to use Estilo s online store to order a couple more items that will complement her new suit. She orders two more blouses to ensure she crosses the minimum purchase value that will also qualify her for a free item of jewelry. The following day she also orders a belt, but at the same time, she has a change of heart about one blouse and decides to cancel that part of the order. She completes a simple online cancellation form, and receives confirmation of the changes she has made. The remaining blouse and belt arrive on time, and in perfect condition. Challenges for Estilo The ability to handle split and changed orders efficiently and effectively, without significant fulfillment delays, can be a key differentiator for online retailers. Key challenges in achieving this include: Efficient management of split orders and the ability to accommodate customers delivery preferences i.e. single delivery or delivery on availability Automating the order cancellation process along the entire stock and fulfillment chain Straightforward but secure integration of third-party shipping organizations Efficient handling of non-inventory items such as vouchers. Solution Estilo s cross-channel commerce infrastructure features built-in, rule-based coordination of order processing, and intuitive web-based cockpits for automated order splitting, cancellation and other order management functions. It also provides secure access to data via a Web browser, for drop shippers with no locally-managed IT systems required. Finally, the solution features policy-based management of customer-based good will credit. This ensures exceptional circumstances such as Gabriela s order cancellation and free item award can be handled with the minimum of administration effort and cost. Benefits For Gabriela: She benefits from faster time-to-satisfaction through faster deliveries, greater peace of mind and a lower purchasing risk through fewer incorrect, late or incomplete orders. For Estilo: The retailer benefits from increased delivery efficiency that improves customer satisfaction, and lower return rates that reduce shipping costs. In addition, customer trust and loyalty is enhanced by fast, reliable order fulfillment and easy administration of good will credit. This drives repeat sales and higher revenues. arvato OMS a product from arvato Systems Copyright 2013 Seite 9

10 7) Truly international service Gabriela s experience Gabriela treats herself to a weekend in her home town of Barcelona. In her local Estilo store, she sees a jacket she loves, but it s too warm to wear now, and she doesn t want to pack it in her luggage. She finds the item in the UK web shop, but she knows that her Spanish credit card company charges her a 2% conversion fee for purchases not in Euros. Fortunately, the UK web shop is supported by a system that enables a checkout to be conducted in other currencies as well, so Gabriela selects Euros and places her order, happy that she has saved herself some money and that the jacket will be waiting for her when she gets back to London. Challenges for Estilo Maintaining offer and service consistency on an international basis is one of the biggest challenges facing retailers today, as mass migration and the internet have created a truly global marketplace. Key issues for Estilo to address include: Generating customer insight to help shape market-appropriate product offerings Integration of local logistics partners into order management and fulfillment processes Connecting the systems that support the provision of consistent but country-specific product information Accommodating customers currency preferences Brand-accurate content in the appropriate language and tonality Flexibility in handling switching between different currencies according to customer and supplier preferences, and economic circumstances Solution Estilo has achieved success quickly in new markets by implementing a cross-channel technology platform designed from the ground up to support international expansion. For Gabriela s purchase, that means implementing a cross-channel commerce platform that can process the UK entity s functional currency of the UK retailer (GBP), so that revenue is recorded in GBP, but still display Gabriela s currency of choice within the user interface. Additional required functionality includes built-in support for multiple languages, timezones, taxation regimes and numeric formats in both customer-facing systems, such as customer service interfaces, and supplier systems such as those used by drop-shippers. Product content and customer information is also consolidated centrally to ensure easier updates, single source-of-truth accuracy and faster analysis. Finally, the retailer has the ability to integrate new suppliers via a Web browser, avoiding complex IT integration that takes months and could affect existing systems and partner relationships. All this has been achieved without having to redesign key business processes. arvato OMS a product from arvato Systems Copyright 2013 Seite 10

11 Benefits For Gabriela: She is presented with all the information she needs in her native language, but tailored to the UK-specific product portfolio, currency and tax system. For Estilo: The retailer has been able to enter international markets with confidence more quickly than initially envisaged, with a smooth, fast deployment that required minimal customization. The benefits are being felt across the business. They include a faster return on investment through earlier revenue generation, and the rapid establishment of a loyal and growing customer base through consistently excellent service. arvato OMS a product from arvato Systems Copyright 2013 Seite 11

12 Introducing arvato OMS from arvato Systems Delighting a customer like Gabriela is about delivering a truly connected commerce experience, wherever, whenever and however she chooses to make a purchase. The arvato OMS from arvato Systems, the global systems integrator, is a proven cross-channel order management solution that facilitates connected commerce in the modern world. Today, customers want to see online what is available in-store. They want to pick up or return items in-store. Or they want to reserve in-store goods from their mobile devices. arvato OMS connects the data, systems and processes you need to manage these new customer journeys across all touch points and purchasing channels online and offline, in-store, on the web, on mobile devices (smartphones and tablets), and through print media. In short, arvato s OMS enables connected commerce. By helping satisfy needs more precisely, arvato OMS enhances customer satisfaction, while also driving revenues, lowering operational costs and reducing the complexity of fulfilling orders across multiple channels. The arvato OMS can be deployed onsite, or delivered as a hosted service in the cloud, more quickly and at lower cost than similar products. And it s ready to implement internationally without a redesign. It s the essential platform for connected commerce, ensuring customer satisfaction in the new crosschannel commercial world, and increasing orders across digital and physical channels. arvato OMS a product from arvato Systems Copyright 2013 Seite 12

13 About arvato Systems arvato Systems is a systems integrator with a solid reputation. We not only implement standard software, but also offer tailor-made, industry-specific and individually developed solutions. About 2,500 dedicated employees at 25 sites throughout the world are always there for their customers. As part of the arvato network, a leading global BPO provider belonging to Bertelsmann, we have the unique capability to create entire value chains and combine IT with other arvato services to deliver an integrated service offer from one source. The strength of arvato Systems lies in the intelligent combination of systems integration and planning, operation and support. Our customers appreciate the way we bring in-depth industry know-how, cross-platform expertise, a true partnership approach, and genuine entrepreneurial spirit to the table. Our solutions pave the way for your success. Extensive Process Expertise in the Retail Environment ecommerce begins with in-depth knowledge of markets and sales channels. With arvato Systems at your side, you have a powerful partner with extensive expertise in brick-and-mortar and online retail processes gained from the arvato Group s many years of experience in service-providing operations and consumer transactions. Complete Value-Added Chain Manage your complete multichannel value-added chain (logistics, customer service, finance, marketing, risk management) from a single source with the arvato Group. Strong Technology Partners With hybris, OXID esales, and SAP, we rely on first-class international e-commerce partners!. arvato OMS a product from arvato Systems Copyright 2013 Seite 13

14 Copyrights and Trademarks Copyright 2013 arvato Systems, An der Autobahn 200, Gütersloh, Germany. All rights reserved. To learn more about arvato Systems and the arvato Order Management System, contact us today! Contact Frank Anke Senior Manager Sales & Consulting arvato Systems An der Autobahn Gütersloh Germany Phone: Mobile: arvato OMS a product from arvato Systems Copyright 2013 Seite 14

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