5 obstacles to omnichannel success

Transcription

1 5 obstacles to omnichannel success The role of product information management in omnichannel commerce Informatica 5 obstacles to omnichannel success

2 02 Informatica 5 obstacles to omnichannel success The vision and the reality of omnichannel retail

3 Introduction Ideal visions of omnichannel commerce have been fizzing around the retail industry for a while now. But it looks like there s only one place that the total connectedness between retailer, product, and customer has completely arrived: on the customer s wish list. A 2014 survey 1 shows that customers see multichannel shopping as a given. And they expect all this from retailers today: A compelling brand story delivered in a distinctive experience Customized offers based on personal preferences An enhanced and consistent experience across all devices Transparency, real time, into a retailer s inventory The presence of their favorite retailers in all the channels they use You don t need us to tell you: In most businesses, internal processes and technology are nowhere close to enabling an omnichannel experience like that. Understandably, retailers are panicking. While most are aware that things need to change, the complexity of omnichannel makes it hard to know where to start. And many overlook the key cog in the omnichannel machine: product information. 90% 2 of all shopping cart abandonments happen because customers feel they don t have enough information. 40% 3 of all ecommerce sales are returned, partly because consumers don t have the right information when ordering. This ebook is about the central role of product information management during your transformation to omnichannel. Get it right and you ll sell more, delight customers, and get to market faster. Get it wrong, and you may never catch up. 03 Informatica 5 obstacles to omnichannel success

4 The vision of omnichannel commerce If you re using more than one channel to sell your products, you ve probably come across the ideal vision of omnichannel commerce in one form or another. You ve seen purchase journey models that look like crazy flight maps, with shoppers hopping from online search to brick-andmortar stores, from social media sites to TV ads to print catalogs and around and back again. And you ve seen the vision of a seamlessly connected shopping experience with: Empowered, globally surfing, on-the-move customers... being directed to local stores by their mobile devices... where in-store kiosks and informationpowered staff deliver an integrated customer experience (aligned with print, mobile, and all other channels)...offering personal advice based on the customer s profile (sex, age) and behaviors (purchase history across channels, social network likes, cart abandonments) all informed by a complete knowledge about the product and its cross-selling opportunities... as well as about availability and shipping options... all for which data is real-time and connects to optimize resources and to create the most attractive shopping experience for the customer and the most profitable transaction for the retailer. Phew. Multichannel vs. Omnichannel The terms multi- vs. omnichannel commerce are being used by different people to mean different things. Here s what we mean when we use them: Multichannel Businesses selling their products in more than one channel (e.g. store, online, mobile, print, phone, social). In practice, for many companies this means adding an ecommerce channel to their existing brickand-mortar and/or mail-order operation. Omnichannel The term refers to the connectedness and unity of the business operation all channels and processes interoperating and creating a seamless customer experience, so information about a product on one channel is exactly the same for that product on another channel. And it means a general readiness of businesses to integrate new channels on the basis of their existing infrastructure. 04 Informatica 5 obstacles to omnichannel success

5 and the reality of multichannel retail The omnichannel vision of a unique and personal customer experience powered by information is as exciting as it is frightening. That s understandable. It s a tough thing to deliver In the real world, your world it s hard to keep up with customer demands in a single channel, much less many. Selling products today is: Shopper-controlled. It s never been easier for consumers to compare products and prices. This has eroded old customer loyalty and means you have to earn every sale. Global. If you re selling your products in different regions, you re facing complex localization and supply chain coordination. Fast. Product lifecycles are short. Time-to-market is critical (and gets tougher the more channels you re selling through). SKU-heavy. Endless-aisle assortments are great for margins. That s a huge opportunity, but product data overload due to the large number of SKUs and their attributes adds up to a huge admin burden. Data driven. Product data alone is more than a handful to deal with. But you also need to know as much about your customers as you know about your products. And the explosion of channels and touchpoints doesn t make it any easier to connect the dots. Clearly, the omnichannel vision that so many vendors and analysts are promoting is a lot harder and further away than it seems. Retail takes action 4 of retail CEOs are planning AGGRESSIVE ACTION to change their business model have change programs UNDERWAY OR PLANNED so you can add change to your multichannel challenges 05 Informatica 5 obstacles to omnichannel success

6 It s about the data The basis of any omnichannel operation is connected data. Without it, none of the great omnichannel feats can even begin to happen: A consistently great customer experience Accurate, real-time insight across all channels and devices Personalized recommendations and discounts Streamlined, centralized, and automated processes But if you re like most retailers, you ve still got your data neatly tucked away in silos. If you re like most businesses, true omnichannel retailing is still a distant vision. That s because you re trying to rise to the challenge using the tools designed for single-channel times. In many retailers, each channel has a dedicated team that creates its own customer and product databases (and even its own marketing strategy). So when they add a channel, they multiply their data sets instead of centralizing them. And they have no way of connecting their data to multiply their insights. Here s what that looks like (warning it s not pretty): In the course of a year, a customer buys three red dresses from a retailer (in-store and through a catalog), but the next she receives offers her 10% off the dress she already owns (or the black skinny jeans she ll never buy). A retailer s online team hires a writer to jazz up some product copy, but the catalog people print the descriptions they got from their suppliers three months earlier. Disconnect. A customer asks in-store staff about the compatibility of a large-screen TV with a certain computer an ideal cross-sell of an adapter. But the call center is unaware of the issue and ends up misinforming callers, missing a sales opportunity and causing product returns. Not good. Not omnichannel. But so common it s not even remarkable. Of all the respondents to a 2013 RIS survey 5, not a single retailer claimed to be absolutely omnichannel-ready. 19.2% said they re nearly up- to-date and starting to get ahead of the curve. 30.8% of retailers said they were behind the curve but making fast progress. And the largest group (50%) said they were behind the curve and only making slow progress to get ahead. 06 Informatica 5 obstacles to omnichannel success

7 Data silos kill omnichannel success While it s certainly possible to support more than one channel using the methods described above, they ll never let you make progress toward true omnichannel retailing. Siloed data is the enemy of joined-up thinking, streamlined operations, and intelligent insights. It s also a barrier to a consistent customer experience. This much is clear to transform into an omnichannel business, you need to break down the data silos and it certainly won t happen overnight. The good news: the opportunities are immense: from reaching unheard-of numbers of customers to selling at much more profitable margins in never before imagined places. The money you could earn 6 Retailers estimate that they re Losing of revenue because their business isn t omnichannel-ready. 07 Informatica 5 obstacles to omnichannel success

8 Why product data is at the heart of customer experience Most retailers know that customer experience drives success. That s why so many focus on CRM. That s a great idea. If you want to keep selling tomorrow, it s crucial to learn all you can about your customers. It s the only way to truly delight them and make better sales, and there s absolutely nothing wrong with it. But it s only part of your data silo challenge. And most retailers ignore an even bigger obstacle to omnichannel success: product information. Why is product information so important? It s as simple as this: you can sell products without knowing your customer inside out. But you can t sell well without getting your product data right. Product data is the basis for any kind of customer experience: Today s shoppers find you via the thing you re selling. And when they do research, they look at your product information, not your product. Customers have become experts in telling good data from bad: incomplete, unsatisfactory information means they ll click away to a competitor for a more complete view. For personalization, there s no use knowing your customers purchase history, buying power, and preferences if you don t know how your products relate to that information. In short: without complete, accurate and up-to-date product information, the customer s purchase journey stops. The first step to omnichannel readiness is revising the way you think about and handle your product data. It s what s at the center of your buyers purchase journey and at the center of your business (and business processes). Retailers that don t understand this will always struggle in an omnichannel world. So let s take a look at the top five things you need to fix to make your product information processes ready for omnichannel. 08 Informatica 5 obstacles to omnichannel success

9 Omnichannel product data: the top 5 things to fix 09 Informatica 5 obstacles to omnichannel success

10 Obstacle 1 Thinking one channel at a time 10 Informatica 5 obstacles to omnichannel success

11 Obstacle 1 Thinking one channel at a time Like most retailers, you were at home in one channel. You knew it inside out and had your product data and (often home-grown) repositories optimized to suit it. This basic approach didn t change when you added, say, ecommerce to the business. After all, it was a completely new channel with its very own characteristics and requirements. So you built your own data repository (which, let s face it, was probably a spreadsheet). And went on to do so for each new channel. The procedure works, no doubt. But it s really bad practice: It s a black hole for resources Any change or addition needs to be done in every single channel. Manually. That multiplies the workload around product data by the number of channels. People sit on information One team doesn t profit from the insight and the improvements of the other. So even though accurate data exists somewhere within the company, it doesn t get shared. It leads to information clash Product information is inconsistent across channels, which alienates omnichannel customers. It disappoints customers people will order items based on wrong information and that ups the number of returns. 11 Informatica 5 obstacles to omnichannel success

12 Obstacle 2 Action Point Get rid of single-channel thinking. Don t add, integrate The important thing to remember is this: only the new channel is new. Your product data isn t. You ll be presenting your products in a channel-specific way, but this format can be pulled from a single, universal product information management (PIM) system. A PIM system is the central place where you hold and update data, and from which you feed all channels. This greatly reduces the time and effort spent on data processes and makes it easy to add new channels without adding product data silos. 12 Informatica 5 obstacles to omnichannel success

13 Obstacle 2 The right (accurate) data for each channel 13 Informatica 5 obstacles to omnichannel success

14 Obstacle 2 The right (accurate) data for each channel Each channel has its own characteristics and requirements. A website, for instance, has much more space for copy and complete lists of features than a print catalog and needs some extra information like SEO and metatags. A mobile shop needs to be optimized to display the most important information around a product on a small screen. But just because they re not the same doesn t mean they shouldn t be accurate, up-to-date, and consistent. Today s customers shop simultaneously across channels. They might research a product online, examine it closely in-store and end up using their tablet to order it for home delivery while on the train. If they spot inconsistencies along the way, you ll lose their trust. Omnichannel commerce is real-time. Not only do buyers expect retailers to know everything about their products, they also expect this information to be up-to-date. Achieving consistency across thousands of fast-moving and attribute-heavy products (maybe even in different languages) is impossible when it s done with silos and spreadsheets: data entry eats away resources and will only ever do a mediocre PIM job at best: a lot of data will be out-dated by the time the customer sees it. 14 Informatica 5 obstacles to omnichannel success

15 Obstacle 2 Action Point Universalize your data For a unified customer experience and a consistent brand image, your channels need to be displaying data from one single, high-quality, always-up-to-date source that feeds all channels according to rules you define for each one. Then think channel strategy. The explosion of channels has made one thing clear: new channels will appear and they might bring great opportunities for your business. When the time comes, you want to be ready to serve them quickly. You don t want to be wasting time copying and pasting product data. The only channel problem you should be solving is a strategic one: what data to display where, in what form. 15 Informatica 5 obstacles to omnichannel success

16 Obstacle 3 Bad data quality and generic data 16 Informatica 5 obstacles to omnichannel success

17 Obstacle 3 Bad data quality and generic data Incorrect and incomplete product information has always been bad for business, no matter which channel you re selling in. But it s important to understand the consequences of bad data for omnichannel commerce. Product information injects confidence to buy 2,3 shopping cart abandonments happen because customers feel they don t have information EVEN MORE SHOCKING IS THIS of all ecommerce sales are returned partly because consumers have doubts while ordering so the truth of the matter is incomplete data will lose you business and eat your margins. Alive. Your competitors have product information, too Many retailers sell what you re selling, and run-of-the-mill data sets are a dime a dozen. Non-proprietary, unbranded, neutral product information doesn t signal that people should buy now and buy from you. Treat product data like the strategic asset it should be. 17 Informatica 5 obstacles to omnichannel success

18 Obstacle 3 Action Point Give your product information some TLC Treat your product data with the same reverence as you treat the product itself. Set and enforce standards. Enrich your information beyond the generic with photos, videos, and your own text in the brand voice. There is a best practice for that: it s called data governance and you can learn more about it here. 18 Informatica 5 obstacles to omnichannel success

19 Obstacle 4 Poor product information processes 19 Informatica 5 obstacles to omnichannel success

20 Obstacle 4 Poor product information processes For every retailer, new products are the fuel of business. But getting new products introduced and ready-to-shop is a complex process that involves the entire operation from buying to marketing, from warehousing to customer service, as well as external stakeholders such as agencies, vendors, and fulfilment services. Unfortunately, the data surrounding new products is seldom perfect when it s first onboarded into a retailer s system. And manually completing the missing information takes a long time, during which the product can t be sold ( shelf lag t). Bad or non-existent PIM processes inhibit selling: They increase the introduction time for new products They slow down supplier onboarding They make retailers slow to react to trends They hog resources: IT personnel are too constrained to take on other projects They make long-tail commerce virtually impossible (due to the number of SKUs and attributes). 20 Informatica 5 obstacles to omnichannel success

21 Obstacle 5 Action Point Automate your PIM processes If you want to serve omnichannel assortments and speed your time-to-market, you need to automate your PIM processes: Get a flexible PIM in place that is able to handle different data formats from disparate sources Include a collaboration portal with your PIM: this enables all stakeholders (suppliers, manufacturers, marketing, etc.) to contribute to product information completeness Get automated processes in place for validation (highlighting inconsistencies and errors) and workflow (the system assigns completion tasks to designated contributors). 21 Informatica 5 obstacles to omnichannel success

22 Obstacle 5 Isolated data 22 Informatica 5 obstacles to omnichannel success

23 Obstacle 5 Isolated data Product information works hardest when it s combined with other sets of data. In isolation from other sources of information, it s not as strong. Establishing relevant connections means achieving strategic and operational intelligence, like: Recommending relevant products to your customers Maximizing margins by analyzing shipping and warehousing options Understanding product performance by demographics and regions Creating real-time reports for sales and marketing. Leveraging the intelligent connections between data sets: it s called master data management (MDM) and it s where omnichannel magic happens! 23 Informatica 5 obstacles to omnichannel success

24 Obstacle 5 Action Point Connect your insights Relate your product information with what you know about your customers, suppliers, location, and other stuff you care about. MDM may come at a later stage in your business transformation journey. But it s impossible to do if your product information isn t ship-shape first. 24 Informatica 5 obstacles to omnichannel success

25 PIM enables omnichannel Omnichannel commerce is an immense opportunity There s massive potential to serve an almost unlimited number of products to unimagined numbers of customers in undreamt-of places. And new channels will keep opening up in the future. Product information is at the center of this transformation. But it can also be its primary inhibitor. Cracking the product information management challenge will put you at an enormous advantage. It s the first system to get in place if you d love to do omnichannel selling but are held back by data silos and manual processes. In short, PIM helps Bridge the gap between the vision and the reality of omnichannel selling Deliver truly outstanding customer experiences Get more products to more markets, faster Do it all with far less effort. It s an omnichannel world, there s no going back. Time to get your PIM on. 25 Informatica 5 obstacles to omnichannel success

26 Liked this? You may also like this too: Accelerating Multichannel Commerce with Rich Data using PIM 26 Informatica 5 obstacles to omnichannel success

27 This ebook was brought to you by Informatica We make the world s most complete PIM solution. It s part of a Master Data Management portfolio that s changing the world, one company at a time. Some of the world s biggest, most successful, and most agile retailers and manufacturers rely on our PIM solution and our experts in PIM deployment. Let s talk. Informatica 5 obstacles to omnichannel success IN18_0414_2638

28 Sources 1. PwC Global Total Retail Survey, February Internet World Business Magazin, Retourenforschung.de 4. PwC s Global CEO Survey, January RIS New Custom Research, Omnichannel Readiness, October RIS New Custom Research, Omnichannel Readiness, October Informatica 5 obstacles to omnichannel success