Investing For Success In Omnichannel Retailing
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Transcript of Investing For Success In Omnichannel Retailing
SERIES
ConsumerConnected
Session sponsored by
Presented by
#CCS14
Investing For Success In �Omnichannel Retailing�
SERIES
ConsumerConnected #CCS14
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ConsumerConnected #CCS14
Panelists Debbie Hauss Editor-in-Chief
Retail TouchPoints
MODERATOR
Brion Reusche Industry Principal, Retail
Junction Solutions
Paula Rosenblum Managing Partner
RSR Research
April 2014
Paula Rosenblum Managing Partner
Retail Systems Research, LLC
Satisfying Customers in a Post-channel World
Agenda About RSR & The BOOT MethodologySM
Retail’s RESET Moment
Satisfying Channel Agnostic Customers • Next Generation Fulfillment
• eCommerce Technologies Come to the Store
• Managing the new “customer dimension of data”
• Impact on Merchandising
• Bringing Advanced Analytics to the Masses
7
About RSR Founded in 2007 to quickly become the leading source of insights for trends in retail technology, and retail in general Mission: To elevate the conversation about retail technology to a strategic level within the retail enterprise by: • Providing objective, pragmatic advice to both retailers and
solution providers • Leveraging our extensive retail industry experience
• Providing a deep bed of research into retailers' technology investment plans and the business opportunities and challenges that drive those investments.
RSR’s BOOT MethodologySM
9
They sell more “stuff” but… they also think and act differently than their competitors.
Retail Winners: Year-over-year comparable store sales outperform inflation.
Business Challenges Opportunities Organizational
Inhibitors
Technology Enablers
Retail’s Reset Moment
10
Consumer Behaviors Are Fundamentally Changing … From This …(very orderly)
Investigate Select Pay For Fulfill
Investigate Select Pay For Fulfill
Investigate Select Pay For Fulfill
Investigate Select Pay For Fulfill
Store!
Web!
Catalog!
Direct Sales!
…To This (Many Paths To Purchase / Chaotic Patterns)
Web!
Investigate! Select! Pay for ! Fulfill!
Store! Store! Store! Store!
Call Center!
Call Center!
Call Center!
Direct Delivery!
Web! Web!
Mobile!
Anything!
…and !
Direct Sales!
Direct Sales!
Direct Sales!
This is the Omni-channel Phenomenon
This Chaos Brings Profit
13
17%
10%
7%
28%
38%
18%
3%
3%
29%
47%
Don't Know/Can't Tell
Less Profitable Than Single Channel Customers
Equally Profitable
Slightly More Profitable Than Single Channel Customers
Significantly More Profitable Than Single Channel Customers
Multi-Channel Customers Are: 2013 2012
RSR Research, June 2013
But you have to execute differently
Satisfying Channel Agnostic Customers
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• Optimize Consumers’ Paths To Purchase
• Define One Brand
• Re-Integrate The Store
• Solidify Marketing’s New Role
• Re-align The Supply Chain
Retailers Know They Need To…
15 “Bathe” Everything In Analytics
This Changes Everything
16
RSR Research LLC, June 2013
13%
33%
42%
44%
46%
50%
52%
53%
64%
73%
75%
80%
84%
54%
48%
55%
49%
44%
47%
41%
43%
36%
21%
19%
16%
16%
33%
19%
3%
7%
10%
3%
7%
4%
6%
5%
4%
Traditional advertising
Customer call center
Procurement/Assortment
Demand Forecasting
Customer segmentation
Store Operations
Loyalty management
Pricing strategies
Digital marketing (E-commerce, Mobile, Social Media)
Customer Order visibility across all channels
Fulfillment
Inventory visibility across all channels
Consistent customer experience across all channels
Value of Processes to Your Company’s Omni-channel Strategy
Very Important Some Importance Little to no Importance
Consumer Expectations Are Driving The Change
17
RSR Research LLC, June 2013
20%
18%
27%
33%
41%
37%
53%
51%
15%
19%
32%
41%
42%
44%
48%
51%
Need to control labor costs while integrating new cross-channel processes into our operations
Consumers know more about products and prices than our employees do
Digital channels are creating increasingly global competition for consumers’ “share of pocket”
The way consumers use channels to make purchase decisions is unpredictable, but important
A good customer experience in one channel is not enough to maintain customer loyalty
We are not doing enough to leverage our assets (digital, inventory, or otherwise) across channels
We struggle to effectively integrate new processes driven by cross-channel strategies into the store
Consumer expectations outpace our ability to deliver cross-channel experiences
Top Three (3) Business Challenges Faced In Cross-channel Strategy
2013 2012
Retailers’ Vision of the Future
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29% 39% 21% 6% 5% The future of online commerce lies more with cross-channel or merged channel capabilities
Agree/Disagree
Strongly Agree Agree Neutral Disagree Strongly Disagree
Source: RSR Research, November 2013
7%
13%
21%
21%
12%
15%
13%
18%
6%
5%
12%
8%
21%
13%
27%
17%
54%
55%
27%
36%
eCommerce as in-store employee-facing handheld application
eCommerce as in-store kiosk
eCommerce as mobile platform
eCommerce as Point of Sale
Plans for Extending eCommerce Platform to Other Parts of the Retail Organization
Implemented Current Project Budgeted Project Planned, Not Yet Budgeted No Plans
The Supply Chain Must Support New Fulfillment Strategies
19
RSR Research LLC, June 2013
10%
10%
70%
30%
60%
60%
70%
5%
25%
35%
45%
63%
65%
73%
Buy via TV
Buy via social commerce site
Buy online/direct, pick-up in store
Buy online/direct, fulfill through any store
Buy via mobile device
Buy in-store, fulfill through online/direct
Buy online, return in-store
Which Cross Channel Activities Does Your Company Engage in Today?
Retail Winners Laggards
The Question That Is Only Beginning To Be Asked Is…
“How Do We Meet These Fulfillment Requirements Profitably?”
20
In The Next 18-24 Months, Retail Will Move To Address How To Profitably Serve Anytime/Anywhere Shopping
2010-13 2013 2014 2015-16
The Impact of the massive adoption of
consumer technologies
(mobile, social) on the Retail selling
environment
The harmonization of the digital and physical selling
environments
Next Generation Marketing
Next Generation Supply Chain
21
So Far…A Sorry State of Affairs
22
RSR Research, September 2013
11%
26%
47%
16%
6%
26%
40%
28%
6%
22%
31%
41%
Advanced: We are ahead of most of our peers and have executed on most of our strategy.
Moderate: We have identified our strategy and are executing on it.
In Process: We are developing our strategy and beginning to execute the plan.
Lagging: We are exploring our omni-channel options and haven’t yet set our long-term strategy.
Omni-Channel Strategy & Execution: Current Progress
Retailers Vendors LSPs
Retailers lag…likely needing a champion (as marketing was for sell-side)
A Harmonized Omni-Channel Environment: Wishes vs. The Budget
Source: RSR Research, June 2013
20%
30%
40%
50%
60%
70%
80%
90%
Omni-Technology: Current Status vs. Perceived Value
Implemented "Very Valuable"
#1 #2 #3 #4 #5
23
Work-In-Progress
24 7%
7%
8%
8%
10%
11%
11%
11%
14%
14%
15%
15%
17%
28%
36%
28%
31%
18%
32%
22%
33%
17%
29%
23%
25%
20%
52%
51%
44%
58%
60%
57%
67%
49%
53%
46%
58%
54%
58%
13%
6%
20%
3%
13%
7%
17%
11%
4%
6%
6%
Customer segmentation
Demand Forecasting
Customer call center
Store Operations
Loyalty management
Digital marketing (E-commerce, Mobile, Social Media)
Consistent customer experience across all channels
Inventory visibility across all channels
Traditional advertising
Customer Order visibility across all channels
Procurement/Assortment
Pricing strategies
Fulfillment
What Is the Current State of Channel Synchronization According to an “Omni channel” Strategy?
Fully Synchronized Full Synchronization in Progress Some Synchronization in Progress No Plans
RSR Research LLC, June 2013
Why Does Visibility Matter?
If retailers can promise availability, they can save the sale
• Show it online even when online is out of stock • Promise it in the store if it’s in-stock online
Some retailers have reported significant sales improvement when they can connect online inventory visibility to stores (“endless aisle”)
25
Advanced Analytics: Why They Matter
FUELING BUSINESS PROCESSES
26
Big Data and Advanced Analytics
A definition for “big data” in retail seems to be coming into focus • Enhanced and improved demand forecasting • Incorporation of customer data into all aspects of the business • Truly becoming a more data-driven enterprise
• Pro-active vs. reactive • Responsive vs. reactive
• New and improved KPI’s
The next generation retail operator has grown up in a tech-enabled world. An easier sell than times gone by An expectation for visually-oriented data
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Using Data to be Proactive
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12%
21%
22%
25%
35%
37%
44%
47%
57%
To help us manage our relationships with trading partners
To get out the word about our Brand Value
To uncover new opportunities we can exploit for competitive advantage
To put actionable information into the hands of operators
To help us to optimize our operations
To uncover trends that impact future objectives
To report the results of our business activities
To help us manage our relationships with consumers
To help us to plan and execute more effectively
The Three Most Important Uses of Data
RSR Research, January 21014
A More Scientific Enterprise
29
37%
42%
43%
53%
66%
52%
47%
51%
37%
30%
11%
10%
7%
10%
4%
Lifecycle price optimization
Localized assortments
An optimized, end--to--end merchandising lifecycle
Unified pricing, promotion and assortment modeling
Retail Forecasting (demand forecasting, forecasting for replenishment, etc.)
Importance to Your Retail Success Extremely Important Somewhat Important Not Very Important
Source: RSR Research, September 2013
You can’t get any of these things without sophisticated analytics
Improve and Transform Merchandising Processes
30
19%
22%
24%
24%
28%
38%
40%
42%
46%
Merchant--oriented workflows and automation
Localized promotions to better match demand against available inventory
Shifting to a holistic pricing, assortment and promotion decision--making process
Consistent, accurate and detailed demand forecasting platform
Improving our ability to adjust to deviations from sales forecasts
Tailoring assortment to customer preferences
Price and markdown optimization to boost sell-through
Integrating planning with cross--functional teams
Better incorporation of customer segmentations & preferences into the planning process
Top Three (3) Opportunties to Improve Merchandising Processes
Source: RSR Research, September 2013
Simplifying Data Presentation
31
55%
40%
55%
73%
63%
65%
For data discovery
For prototyping
For presentation to business users
Plans for presenting data in a visual, graphical form (Data Visualization)
Winners (Have/Implementing) Laggards (Have/Implementing)
RSR Research, January 21014
A majority of survey respondents want/need simpler tools. • A shortage of “analyst” talent • A pre-requisite to democratization across the enterprise
Thank You!
Paula Rosenblum RSR Research
Further Information on Products & Services:
www.rsrresearch.com
Presenter
Brion Reusche Industry Principal Junction Solutions [email protected]
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
Omnichannel Customer Success
BRION REUSCHE, PRINCIPAL, RETAIL INDUSTRY, JUNCTION SOLUTIONS
Agenda
§ About Junction Solutions § Strategies to Achieve Omnichannel Success § Simon Pearce Case Study § Path Forward to Omnichannel Retail Success
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
About Junction Solutions
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Founded in 2002
§ Provides solutions supporting Microsoft® Dynamics AX platform
§ Implementation Services
§ IT and Operational Consulting
§ Flexible Delivery Options: On-premise, Cloud, Hybrid deployments
§ Hundreds of successful ERP implementations
§ 90% of Junction Solutions customers would recommend us to a friend or colleague
Strategies to Achieve Omnichannel Success
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Develop a long-term plan to promote omnichannel
§ Invest in technology to connect customers via multiple channels
§ Optimize integration to enable end-to-end visibility required for an omnichannel business model
Develop a Long-Term Plan
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Gather input from managers involved in each touch point of customer experience
§ Evaluate current strategies, operations, supply chain, technology assets and processes
§ Identify opportunities for improvement & growth
§ Adapt a business model to support evolving needs of customer
Why New Technology Investments are Needed
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Are your systems more than 7 to 10 years old?
§ Does your system lack integration capabilities that promote organizational silos?
§ Are there numerous customized applications to compensate for substandard performance from your legacy systems?
Why New Technology Investments are Needed
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Do you lack total visibility from the register to the warehouse?
§ Do you trust the accuracy and timeliness of your data?
§ Are you relying on numerous time-consuming manual processes and Excel spreadsheets?
Prioritizing Technology Investments-ERP
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Replace outdated legacy systems with a flexible and scalable retail ERP system to support customer-centric processes
Prioritizing Technology Investments - BI
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ BI integrated with ERP can harness Big Data into actionable intelligence
§ BI integrated with ERP enables faster information access than BI used alone*
§ Improving data analytics was leading technology initiative for companies in 2013**
*Aberdeen Group, “ERP Plus BI,” June 2012 **Forrester Research, “Best Practices: Maximize your Changes of BI Success,” July 24, 2013
Benefits of BI
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Analyze customer data to incorporate into channel operations
§ Make better predictions, decisions and adjustments in real time
§ Integrate with personalization tools to ensure customers see available products and content that is relevant in real time
Prioritizing Technology Investments-mobile, ecommerce, and social media
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Disruptive technologies that transform how retailers interact with customers
§ Consumers increasingly rely on ecommerce sites to research products, price and availability
§ Mobile devices revolutionizing how retail staff deliver service at point of sale
§ Social Media offers key outlet to promote products and analyze consumer opinions
Optimize Integration
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Unify operations to one open enterprise platform to minimize number of integration points
§ Reduce number of disparate legacy applications
§ Select a system with comprehensive functionality to minimize customizations
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
If You Do What You’ve Always Done…
Challenging the Status Quo-ERP is costly and Monolithic
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
Reality:
§ Some ERP systems are specifically designed for multichannel retailers requiring virtually no costly customization
§ A single comprehensive ERP costs less and is more secure than numerous disparate systems
Challenging the Status Quo-Fear of Failure and Business Disruption
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
Reality:
§ Experienced IT partners can implement change management and technologies in months not years
§ Consultants’ expertise can assure virtually no disruption to business
§ Ease of use facilitates training and speeds time-to-benefit
Case Study
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
Simon Pearce
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Specialty retailer and manufacturer of beautiful hand crafted glass and pottery.
§ Produces more than 450,000 pieces of pottery and glassware each year.
§ Operates five different channels including retail stores, catalogue, online store, a corporate award business for personalized merchandise and a wholesale business.
Simon Pearce: Business Challenges
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Lack of visibility throughout its channels
§ Numerous time-consuming manual processes
§ Unable to access real-time product information
§ Inefficient shipping processes
§ Manual processes in special orders led to inaccuracy and delays in information access
Simon Pearce: Solution
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Junction Solutions provided implementation services and business consulting
§ Implemented Microsoft Dynamics AX for Retail, Dynamics AX for POS and related retail applications
§ Integrated Dynamics with their key point solutions
Simon Pearce: Benefits
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Improved order turn time
§ Customers now can view product availability in real-time, increasing customer satisfaction
§ Order taking and order fulfillment is seamless in every channel
§ Eliminated manual processes
§ Improved efficiency in shipping
Path Forward to Omnichannel Success
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
§ Work with an experienced IT or Consulting Partner
§ Incorporate change management to fully exploit new technologies and promote channel transparency
§ Focus on Integration in selecting technology and implementing
§ Continue to identify opportunities for growth
JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
Omnichannel Customer Success
BRION REUSCHE, PRINCIPAL, RETAIL INDUSTRY, JUNCTION SOLUTIONS
SERIES
ConsumerConnected #CCS14
Q & A // Panelists Debbie Hauss Editor-in-Chief
Retail TouchPoints
MODERATOR
Brion Reusche Industry Principal, Retail
Junction Solutions
Paula Rosenblum Managing Partner
RSR Research
SERIES
ConsumerConnected #CCS14
10
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