BUILDING OMNI-CHANNEL RETAIL FROM THE BACK END UP

BUILDING OMNI-CHANNEL RETAIL FROM THE BACK END UP

Building Omni-Channel Retail From The Back End Up 2 An average of 50% of retailers plan to increase their commitments to order management, e-commerce, mobile commerce, core POS and mobile POS in 2015, according to IHL Services. But while these back-end systems are critical to processing orders and handling transactions, they are also the essential building blocks of an omnichannel strategy. These days, retailers need to be ahead of the curve in creating an integrated customer experience and delivering a consistent brand message across multiple channels. That is because consumers now expect the same level of service whether they are speaking with a sales associate in-store, browsing an e-commerce site or swiping their credit card through a mobile POS device. In fact, multichannel consumers spend 82% more per transaction than customers who only shop in-store, according to a report from advisory firm Deloitte. And a Forrester report entitled Consumer Desires vs. Retailer Capabilities: Minding the Omni-Channel Gap predicts $1.8 trillion in online and webinfluenced retail sales in 2017 up from $1.3 trillion in 2013. In this report we explore the challenges facing companies that are lacking an omni-channel approach: Gathering actionable analytics: It is not always easy to measure consumer activity in each and every individual channel. Yet without this consolidated view, retailers risk not having a comprehensive understanding of their customers. Shifting mindset: Many retailers make the mistake of seeing an e-commerce site as just one big store, separate from a brickand-mortar location. Instead, merchants need to be trained to think in omni-channel terms and view multiple channels as a unified customer journey. Inaccurate inventory: Informing an online shopper that an item is available for in-store pickup when it is in fact not available is a surefire way to lose business. Poor system integration: A hodgepodge of legacy systems and newer best-of-breed solutions can make it incredibly difficult to ensure proper integration. A lack of employee enthusiasm: Retailers need to drive adoption of an omni-channel strategy among store associates to achieve success. Retailers need to be ahead of the curve in creating an integrated customer experience and delivering a consistent brand message across multiple channels.

Building Omni-Channel Retail From The Back End Up 3 The right back-end systems can help retailers overcome these obstacles and achieve their omni-channel goals. In fact, omni-channel relies on a wide spectrum of properly integrated systems so that retailers can effectively increase brand awareness, enhance customer experience and drive revenue. There is no one omni-channel bucket where you can invest as if investing in a stock option, said Greg Buzek, President of IHL Services. It s a variety of products. Currently, there are three main functions of an omni-channel strategy: Creating a consistent brand; Leveraging actionable data; and Ensuring a real-time response to customer needs. This brief explains why an omni-channel strategy is critical to retail success and how the right back-end systems can support each of these important functions. Maintaining A Consistent Brand An effective omni-channel strategy is about delivering a single message consistently to your customers regardless of device or channel. According to Donna Taylor, Microsoft Dynamics AX for Retail Specialist at UXC Eclipse: One of the most important things about the omnichannel strategy is the maintenance of your brand. Brand in the retail world is everything, and it is what you have to protect and build. For example, if a retailer s e-commerce site uses data analytics to predict a consumer s buying preferences, a brickand-mortar sales associate should be equally in the know and armed with details of a customer s order history and online activity. And for good reason: A recent Infosys study revealed that brand consistency across channels is a significant factor in consumer spend, with more than 63% of shoppers asserting that brand consistency plays One of the most important things about the omnichannel strategy is the maintenance of your brand. Brand in the retail world is everything, and it is what you have to protect and build. - Donna Taylor, UXC Eclipse

Building Omni-Channel Retail From The Back End Up 4 a role in their spending. Furthermore, 34% of respondents report that a high level of brand consistency contributes to a greater spend, while a lack of consistency reduces spend for 39% of consumers. To deliver such consistency, the right back-end retail system is mandatory. Online ordering, mobile browsing, in-store shopping all of these transactions can be combined into a single ordering system to ensure a positive experience. For example, a single and integrated order management system can serve as both an important centre of activity and a single source of truth. The big drive right now is moving to the use of a single order management system, which is becoming the hub regardless of how a shopper chooses to buy your products, Buzek said. Whether you re serving up webpages, or mobile pages to a mobile device within the store, or your traditional pointof-sale system, the desire is to move to a single system. This approach also supports an integrated retail supply chain so that purchases made online can easily be returned to a store. Moreover, items can be shipped from one brick-and-mortar location to another without impacting product availability or inventory. And from a merchant perspective, retailers can anticipate customer buying behaviour with full knowledge of stock levels and then respond to these customer demands with timely, appropriate and targeted promotions. For example, due to rapid growth in multiple countries, a popular retail chain was struggling to achieve a single and consistent source of truth that would allow it to accurately forecast consumer demands, inventory levels and labour requirements. So the retailer turned to Microsoft Dynamics AX for Retail. By providing omni-channel capabilities that create a single view of the organisation, the solution has enabled the retailer to rapidly expand into new markets, increase customer visibility, forecast and budget enterprise needs, and expedite growth, all while maintaining brand consistency. The big drive right now is moving to the use of a single order management system, which is becoming the hub regardless of how a shopper chooses to buy your products. - Greg Buzek, IHL Services

Building Omni-Channel Retail From The Back End Up 5 Leveraging Actionable Data Creating an integrated experience across multiple channels requires the right data. By analysing data collected on customers, such as buying behaviour and preferred method of payment, retailers can gain a 360-degree view of their customers a critical component in any omnichannel strategy. However, more data collected does not necessarily mean better insights gleaned. The goal for retailers is to be able to gather and act on data quickly enough to make a significant impact on customer service. More data doesn t mean that you re going to make better decisions, Taylor said. Better decisions are made by accruing and using data to find the outliers and areas that need attention. The right retail system can help by sharing critical transactional data with a business intelligence solution for instant analysis. Forget about training employees to painstakingly manipulate SQL queries to crunch data sets. Rather, many back-end retail systems are equipped to handle vast amounts of information, and then slice and dice these data sets into actionable insights. In terms of access, employees can be taught how to pivot tables using Excel or similar tools to make sense of the data. Alternatively, some systems have built-in capabilities for data analytics, including dashboards that grant users easy access to frequently updated information. Consider, for example, a fashion retailer that runs three separate warehouses within a single facility one for online orders, one for mobile orders and one for brick-and-mortar orders. If the e-commerce section ran out of stock, the retailer would simply start declining orders. However, with a back-end retail system like Microsoft Dynamics AX for Retail, inventory data could be integrated in such a way that the retailer would know exactly what is in stock and automatically allow sales to continue without having to move stock from one warehouse to another. What s more, the system could send alerts if manufacturing needs to be ramped up to satisfy elevated demand. More data doesn t mean that you re going to make better decisions. Better decisions are made by accruing and using data to find the outliers and areas that need attention. - Donna Taylor, UXC Eclipse

Building Omni-Channel Retail From The Back End Up 6 Ensuring A Real-Time Response To Customer Needs Even the best data requires fast action for a successful omni-channel deployment. In fact, impulse buying sales at online businesses worldwide totaled $1.25 trillion last year an increase from $1.06 trillion in 2012, according to Bloomberg. Collecting data in real time and leveraging it to personalise offers and interactions is critical. As such, systems need to span the enterprise to deliver real-time access to data with deep analysis. Take, for example, a retailer with 50 POS lanes in a single location, as well as a number of smaller satellite facilities. This retailer needs to ready its POS systems for a hectic summer tourist season but only has eight weeks to do so. As it is, the store is taxed with aging POS hardware and software and an independent network infrastructure. However, by deploying Microsoft Dynamics AX for Retail, the retailer managed to leverage real-time data to significantly increase profitability across the supply chain and allow managers to make more immediate decisions on products, shelf space and replenishment. Category management has also been a huge advantage presented by using the right retail systems. For example, since moving into a smaller facility, the retailer was able to get business intelligence solutions up and running, as well as implement all replenishment, inventory tracking, EOS operations, account and full back-office operations in approximately four months. Such immediate category management not only helped reduce waste across facilities but generated a 30% increase in sales. Impulse buying sales at online businesses worldwide totaled $1.25 trillion last year. - Bloomberg

Building Omni-Channel Retail From The Back End Up 7 Conclusion Never in the history of retail have customers had such high expectations. Whether browsing an e-commerce site, exploring a mobile app, seeking assistance via social media or shopping in a retail store, consumers now demand a consistent and seamless experience across multiple channels. And as technology advances, there s no telling how people will shop for goods and services, and what combination of POS systems and devices they ll use. You have to be able to stand across all of the different levels and areas of retail as it s going today, Taylor said. Today, we have web, mobile, Twitter, ebay, Facebook, standard brick-andmortar; who knows what we re going to have five years from now. There are a lot of things that are coming, and you need a system that allows you to be flexible to support those changes in the future. That s why retailers need a strategy that will allow them to remain flexible enough to support these shifting tides in both technology and consumer buying behaviour. An effective omni-channel approach is key to futureproofing any retail business. But that is possible only if the right backend systems are in place. By building from the back end up, retailers can realise the three main functions of an omni-channel strategy: Maintaining a consistent brand; Leveraging actionable data; and Ensuring a real-time response to customer needs. From there, retailers can boost brand awareness, enhance customer experience and drive sales for long-term success. An effective omnichannel approach is key to futureproofing any retail business. But that is possible only if the right back-end systems are in place.

Building Omni-Channel Retail From The Back End Up 8 About Retail TouchPoints Retail TouchPoints is an online publishing network for retail executives, with content focused on optimising the customer experience across all channels. The Retail TouchPoints network is comprised of a weekly newsletter, special reports, web seminars, exclusive benchmark research, an insightful editorial blog, and a content-rich web site featuring daily news updates and multi-media interviews at www.retailtouchpoints.com. The Retail TouchPoints team also interacts with social media communities via Facebook, Twitter and LinkedIn. 411 State Route 17 South Suite 410 Hasbrouck Heights, NJ 07604 P: 201.257.8528 F: 201.426.0181 info@retailtouchpoints.com About UXC Eclipse Microsoft Dynamics ERP Gold Partner UXC Eclipse is the Retail ERP Specialist. The preferred implementation partner for large and complex retail solutions, UXC Eclipse has an impressive customer reference base. Speak to UXC Eclipse about how their integrated Microsoft Retail offerings are delivering true omnichannel retailing globally with mobile POS, full e-commerce, retail warehouse management and logistics and the highest levels of customer service. www,uxceclipse.com.au P: 1300 660 471 info@uxceclipse.com