Sonata Software Retail IT- Omni Channel Retailing- Increasing customer engagement

8/20/2019 Sonata Software Retail IT- Omni Channel Retailing- Increasing customer engagement

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Published on NRF(National Retail Federation)

https://nrf.com/resources/retail-library/omnichannel-retailing-the-new-normalhttps://nrf.com/resources/retail-library/omnichannel-retailing-the-new-normal


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www.sonata-software.com [email protected]

Foreword

Retail industry is currently goingthrough a once-in-a-generationtransformation, primarily drivenby more evolved shoppers andtechnological innovations. Thishas resulted in a structural shiftfrom traditional businesses tomodern retailing channels. Thisparadigm shift has been triggeredby the rapid proliferation ofmobile and internet, resultingin shoppers buying virtuallyanything, anytime, and anywhereusing their preferred channel ofengagement such as in-store,online, and on-the-go.

These changing marketdynamics and rapidly-evolvingtechnologies have compelledretailers to offer seamless,personalized, and consistentcustomer experience acrosschannels. Retailers are undertremendous pressure to blur the

line between different channelsand quickly adopt Omni-Channelstrategies to remain competitive.

However, operational andtechnological challenges arehampering retailers’ abilityto provide an Omni-Channelexperience to their customers.Organizational silos, lack ofholistic visibility, and limitedanalytical capabilities make it

difficult to execute and optimizecross-channel initiativessuccessfully.

This white paper discusses howemerging unified data platformsempower retailers to breakthe barrier between channelsand successfully adopt Omni-Channel approach for their brick-and-click businesses.


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Table of Contents

Growing Importance of Omni-Channel Retailing .......................................................................................4

Bridging the Gap between Brick and Click ................................................................................................5Customer Silos ................................................................................................................................5Legacy System Silos .......................................................................................................................5Organizational Silos ........................................................................................................................5

The Building Blocks ...................................................................................................................................6Strategies for Adopting Omni-Channel Retailing .......................................................................................9

Customer-centric Approach.............................................................................................................9Unied Commerce Platforms .........................................................................................................10Agile Work Environment .................................................................................................................11

Preparing for the Future of Retail .............................................................................................................11


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Growing Importance of Omni-Channel Retailing of Omni-channel Retailing

Retail industry is going through a drastic structural change from traditional businesses to modern retailing channels,driven by the proliferation of multiple touch points, advanced technology, and evolving customer behavior. These growingtrends have drastically changed the face of modern retailing, both online and ofine. It has led to shoppers buyingvirtually anything, anytime, and anywhere, using their mobile devices.

The impact of these unprecedented changes is being felt in the form of transformed customer shopping habits, and highdemand for seamless, consistent, and personalized shopping experience across channels. According to Forrester’sreport, US cross-channel retail sales that are inuenced by the web in some way but are completed in stores, willreach $1.8 trillion by 20171. In addition to this, the traditional retailers are facing never-before competition from onlinemarketplaces and peers who adopted Omni-Channel business strategies.

Today, the only way retailers can outperform this crowded marketplace is by offering what their consumers want, andproviding an exceptional and seamless customer experience across channels. Adopting Omni-Channel strategies iscritical to achieving these objectives. However, existing disparate and legacy systems are making it increasingly difcultto integrate operational silos and touch points effectively to offer consistent cross-channel experience.

Advancing Technology

Multiple

Customer

Touch Points

More Evolved

Shoppers

Customer Expectation

for Consistent Buying

Experience

IncreasedCompetition

1 https://www.forrester.com/Forrester+US+CrossChannel+Retail+Sales+To+Reach+18+Trillion+By+2017/-/E-PRE6324


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Bridging the Gap between Brick and Click

Although Omni-Channel execution is undeniably a toppriority for retailers, they are still striving hard to addressseveral underlying issues hindering the effective deliveryof Omni-Channel experiences. Brands are increasinglynding it difcult to move away from channel-specic silos,and consolidate all customer- and merchandise-relateddata into centralized locations. Three major challengesretailers face today are given in the gure on RHS.

Legacy System

Silos

Organizational

Silos

Customer Silos

Customer Silos

Customer silos and lack of holistic visibility into customerdatabase across channels make it difcult for retailers tounderstand and analyze customer data to offer contextualmessaging and personalized experience. Being customer-centric is critical in today’s marketplace. Thereby, requiringretailers to know their customers and interact seamlesslywith them across touch points based on their preferences.

However, the siloed and non-integrated customer dataresults in multiple copies of customer proles, thuslimiting retailers’ ability to understand customer behaviorand purchase patterns and offer context-based consistentcustomer experience.

Legacy System Silos

The silos within the legacy IT systems make it signicantlychallenging and complex to manage inventories acrosschannels. Lack of clear visibility into inventory reducesinventory accuracy, frequently resulting in out-of-stock

scenarios in one channel and surplus inventory in another

channel. This not only negatively impacts inventory-to-sales ratio but also results in increased inventory costs.These challenges limit the ability of retailers to identify,track, and manage inventory, ensure order fulllmentof their customers, and optimize supply chain acrosschannels.

Organizational Silos

One of the primary challenges in adopting Omni-Channel strategy is siloed organizational teams working independently for e-Commerce and storechannels in an organization. This makes it difcultto optimize cross-channel inventories, enhanceoperational efciencies, and integrate multiple channelsof businesses. According to a survey conducted by TheEconomist Intelligence Unit, 27% of retail executivesresponded that organizational silos restrict their abilityto offer seamless customer experience2. The siloedteams not only limit collaboration, but also make itdifcult to enable process innovation which is imperative

for adopting Omni-Channel strategy.

2 http://www.economistinsights.com/sites/default/les/Creating%20a%20seamless%20retail%20customer%20experience.pdf

Figure 1: Bridging the Gap between Brick and Click


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Seamless, personalized, and

consistent experience

Single view

of customer

Inventory Visiblity

Optimized cross-channel

order management

Seamless order

fulfillment

Customer Business

The Building Blocks

The omni-channel consumer expects consistent brand experience across channels and easy access to information atany given point of time. Technologies such as retail store analytics, beacons, and store fulllment programs are rapidlytransforming how retail stores operate and engage with customers. Therefore, retailers’ ability to leverage advancedtechnology is central to creating a compelling experience and delighting its shoppers.

It is imperative that retailers are equipped in numerous ways to connect with shoppers in real time. The following digitalstrategies are must-haves for the retailers who are looking to set the ball rolling for Omni-Channel retailing and stayingahead of the curve.

Seamless, consistent, and personalized experienceacross channels

With customers increasingly getting used to shopping acrossvarious touch points, they expect consistent experienceacross channels such as store, online, and mobiles. Theonly way retailers can reach out to customers is by blurringlines between online and physical stores. According to asurvey by Forbes, 44% of respondents prefer to buy onlineand collect in-store in the US3. To keep up with evolving

customer expectations, even the leading online retailerssuch as Amazon and eBay are partnering with retailers tooffer “click-and-collect” services.

The key to engaging customers and gaining loyalty is tounderstand and enhance their experience continuouslyacross channels. This requires integration of various datastreams such as transaction history, website interactions,social conversations, and others, to enable data analysisand insight generation into customer behavior. Leveragingcustomer analytics and location-based marketing is thekey to offer personalized, relevant, timely messaging, and

consistent in-store and online experiences. Location-basedmarketing is rapidly becoming mainstream, empoweringmarketers to connect with their customers with contextualmessages, in the right place at the right time-thereby,

Consistent

Personalized

Seamless

3 http://www.forbes.com/sites/stevebanker/2013/10/24/order-online-and-pick-up-at-the-store-costs-consumers-millions/


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which is a win-win for both consumers and retailersalike. Shoppers have the convenience to pick up theirpurchase from a store of their choice as per theirschedule, whereas for brick-and-mortar retailers, thisstrategy provides a signicant competitive edge overpure-play online retailers.

Seamless order fulllment

Earlier, supply chain was considered to be a cost centerbuilt only to deliver goods to stores. However, in anOmni-Channel marketplace, the supply chain has takena center stage and is one of the key factors that contributeto the shoppers’ experience. According to a Forresterreport, 71% of Omni-Channel customers expect toview in-store inventory online, while 50% of them wishto BOPS5. If the order fulllment across any channelgoes wrong, it can lead to consumer dissatisfaction andattrition. It is therefore critical to ensure seamless order

fulllment across channels. Retailers need to havecomplete visibility into order management to ensureon-time store pickup and deliveries. Comprehensivevisibility can also help retailers optimize route planningfor home deliveries and 3rd-party delivery locations.

enabling retailers to discover the potential of precisedigital marketing strategies. This technology helps takeadvantage of geo-fencing that allows retailers to track theshoppers’ location, and offer compelling, highly-relevantdeals to enhance footfalls to the store. Combininglocation with customer-buying behavior and prole,social interaction, and shopping habits can go a long wayin enabling retailers to offer relevant and focused deals,and enhance engagement and brand image. Accordingto a Forbes article, location-based services revenue isestimated to reach $43.3 billion by 2019, a growth ofabout $12.2 billion from 2014.4

Another important strategy to entice customers andensure stickiness is deploying omni-channel loyalty.Unlike conventional loyalty programs, this requiresoptimizing cross-channel marketing to drive cumulativeloyalty outcomes. In order to be successful, retailersneed to run ongoing campaigns that interact with and

engage the customers across touch points. The key liesin ensuring non-intrusive, intuitive, personalized, andengaging deals offered in real time across customers’preferred channels.

Single view of the customer across channels

Putting the customer at the heart of the business iscrucial for retailers to offer seamless, personalized,and consistent experience across channels. To provideOmni-Channel experience, brands need to have a 360degree view of their shoppers’ attributes, wants, and

desires, across multiple channels. A holistic visibilityinto preferences, purchase history, shopping habits,and demographics can empower retailers to design andcreate consistent and unique retail experience for theirconsumers.

Inventory visibility across channels

Integrated inventory visibility is another critical factorin providing Omni-Channel experience. Cross-channelsupply chain optimization reduces the possibility ofout-of-stock situations. To adapt to the evolving marketdynamics, retailers need to respond to the customer

demands and standardize their inventory acrosschannels. This can be done by deploying technologysolutions that can provide comprehensive visibility intothe inventory, allocate and replenish forecast inventoryand plan order, and ensure fulllment effectively acrosschannels.

Optimized cross-channel order management

In-store pickup of online purchases is increasinglybecoming popular amongst shoppers. This gives themthe convenience of shopping online without having to

pay high shipping cost or waiting for the product to bedelivered. In fact, buy online and pick up in-store. BuyOnline Pick-up in-Store(BOPS) is one such strategy

4 http://www.forbes.com/sites/bryanstolle/2014/09/09/271/ 5 Forrester TLP| Customer Desires Vs. Retailer Capabilities: Minding The Omni Channel Commerce Gap| Jan 2014


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Strategies for Adopting Omni-channelRetailing

According to a survey conducted by A.T. Kearney, 55% of

shoppers said they engage via both online and physicaltouch points throughout their shopping life cycle.6 Brands must understand the customer engagementacross all touch points and focus on the broader benetsof an Omni-Channel strategy to optimize consumerexperience. To adopt Omni-Channel strategy, retailersneed to align its business with customers by leveragingIT systems, optimizing business operations, and creatingagile work culture in a way that the division betweenonline and in-store disappears.Here are some of the must-have strategies for theretailers who are looking to adopt Omni-Channel retailingto stay ahead of the curve:

Customer-centric Approach

Building a sustainable relationship with customers is keyto achieving Omni-Channel success. Retailers need toprovide seamless access across web, mobile, and storechannels for customers and convert these into richerengagement. In order to achieve this, retailers need toimplement some key strategies that include:

Personalized campaigns and promotionsPersonalization is not a good-to-have strategyanymore however, relevance is the key to winningcustomer loyalty. In order to design and runpersonalized and relevant campaigns, retailers need

to integrate structured and unstructured data, useadvanced analytics to identify shopping preferences

and buying behavior. The predictive analytical capabilitiesenable retailers to launch personalized campaigns andpromotions, resulting in improved loyalties.

Location-based customer engagement

The new technologies such as NFC and iBeacon enableretailers to personalize customer engagement basedon proximity. It allows advertisers to embed customerpreferences and information with real-time contextand send relevant notications. Thus, location-basedmarketing connects the digital and physical marketingchannels, and helps in deeply engaging mobile shoppers.

Social engagementAccording to Hubspot, 71% of consumers are likelyto make a purchase decision based on social mediareferrals7 and SproutSocial says 74% of shoppers rely onsocial media networks to make purchase decisions.8 It isobvious that social media marketing should be an integralpart of retailers’ marketing strategy today. It provides anextensive platform to expand retailers’ reach, connect withtheir target audiences, and explore limitless possibilityfor exponential growth. In addition to this, engagingwith customers through social media channels not onlyprovides an opportunity for social commerce, but alsohelps gain customer insights, by integrating customers’social interactions.

Care everywhereRetailers must care for customers across their journey

– before shopping, during shopping, and post shoppingthrough modern ways such as shopping assistance, one-touch support, recommendations, post-sales service,24/7 helpdesk, and call center support.

It is critical for retailers to stand out in the clutteredmarketplace by effectively reaching out and engagingwith their target audiences, while optimizing returns.Therefore, retailers need to adopt all these strategies touniquely dene its brand and value proposition.

Customer

Agile Work

Environment

Unified IT

Systems

6 http://www.atkearney.com/documents/10192/4683364/On+Solid+Ground.pdf/f96d82ce-e40c-450d-97bb-884b017f4cd77 http://blog.hubspot.com/blog/tabid/6307/bid/30239/71-More-Likely-to-Purchase-Based-on-Social-Media-Referrals-Infographic.aspx8 http://sproutsocial.com/insights/social-networks-inuence-buying-decisions/


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Unied Commerce Platforms

A survey conducted by the National Retail Federation,Ecommerce Europe and Ecommerce Foundation, inpartnership with Demandware early this year, indicatesthat a high percentage of respondents are in favor of a

unied commerce platform. Out of approximately 300U.S., Australian, and European retail business executives,53% of respondents said that they were going to deploya unied commerce platform, an increase of 50% fromlast year.9

Adopting the right technology platforms can help transformthe business model, and establish a centralized systemthat enables consistent service delivery across channels.Leading unied commerce platforms offer highly scalableand integrated IT solutions from engagement to fulllment.The exible architecture of these platforms supports

the integration of multiple data sources and augmentssurrounding technologies such as e-Commerce, mobility,and analytics. The major advantages of adopting uniedcommerce platforms are:

Single view of customers across channelsProvides 360 degree view of customers regardless ofthe channels that helps enhance analytical capabilities,augment actionable insights, and offer personalizedexperience.

Inventory visibility across channelsProvides real-time and holistic view of inventory, optimizing

operations, and reducing out-of-stock scenarios.

Optimized cross-channel order managementThe integrated order management system enablesseamless order ow across channels.

Enhanced order fulllment capabilitiesThese platforms can be easily extended to fulll ordersthrough multiple ways, like home deliveries, click andcollect, and temporary pickup locations.

Integrations with social media and online marketplaces

These platforms are exible to integrate with social mediaand online marketplaces, providing complete visibility intoorder and inventory data.

ScalabilityThe unied commerce platforms are highly scalable innature and supports business growth seamlessly.

Agile Work Environment

It is not enough to unify systems and build comprehensiveconsumer database spanning web, mobile, and store.To maximize potential, retailers need to eliminate thedistinction between business units and reorganize team

structures. For example, target and incentives shouldbe re-designed to account for overall sales, than justmeasuring channel-specic performance.

Agile work environment is about bringing people andprocesses in sync with technology to nd the mostappropriate and effective way of working collaboratively.To realize omni-channel imperative, businesses need toeliminate siloed work culture amongst channel-specicteams by creating cross-functional teams based onshared company goals.

Preparing for the Future of Retail

Achieving omni-channel excellence requires deningclear objectives and extensive executional, tactical, andstrategic capabilities. We believe retailers who moveaway from siloed and legacy systems to modern uniedsolutions, offering highly-scalable unied platforms, havegreat potential to successfully adopt Omni-Channelstrategies. Such platforms ensure successful integrationof various touch points and offer great potential toretailers to successfully adopt Omni-Channel strategiesto gain competitive advantage.

Having said that, collaborating with strategicimplementation partners with relevant industry-domain

knowledge and experience would allow retailers toleverage the partner’s expertise in implementing best-tsolutions and providing Omni-Channel services.

9 Retailers Respond to Connected Consumers with a Unied Commerce Platform https://nrf.com/media/press-releases/retailers-respond-connected-consumers-unied-commerce-platform


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ABOUT SONATA SOFTWARE

Sonata is a global software services company that focuses on providingIT solutions that make a difference to client business outcomes bytransforming strategic business processes. A trusted long-term serviceprovider to Fortune 100 companies across both the software productdevelopment and enterprise business segments, Sonata’s approach isfocused on leveraging deep technology expertise and clientcommitment, through a unique delivery model based on customerspecific centres of excellence, to provide innovation, reliability and fastertime to market in harnessing new technology towards business criticalresults. The company specialises in solutions for Customer Engagement& Growth, Enterprise Efficiency & Collaboration and IT CostManagement initiatives in the ISV, Travel, Retail and Consumer Goodsdomains. In India, Sonata’s capabilities further extend as one of thelargest end-to-end software system integrators, enabling clients

to maximise the effectiveness and productivity of software investments.

SONATA IN DIGITAL ENGAGEMENT

Sonata partners leading global Travel and Retail brands in their DigitalTransformation journey. As a technology specialist it builds cutting-edgedigital solutions customized for specific business needs that have asignificant impact on the way travel and retail brands engage with their

customers across multiple channels and devices. Sonata’s current focusareas include the digital transformation areas including mobile, social,cloud and analytics. It has a global presence with a right mix of peoplewho use mature delivery processes for successfully catering to theneeds of a global customer base that includes several Fortune-100companies.

Contact us at [email protected]

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Sonata Software Retail IT- Omni Channel Retailing- Increasing customer engagement

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