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Investing For Success In Omnichannel Retailing

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  • 1. SERIES ConsumerConnected Session sponsored by Presented by #CCS14 Investing For Success In Omnichannel Retailing
  • 2. SERIES ConsumerConnected #CCS14 Welcome Webinar Attendees
  • 3. SERIES ConsumerConnected #CCS14 Follow this Webinar on Twitter #CCS14
  • 4. SERIES ConsumerConnected #CCS14 About Retail TouchPoints ü  Launched in 2007 ü  Over 28,000 subscribers ü  To provide executives with relevant, insightful content across a variety of digital medium Free subscription to our weekly newsletter: RETAILTOUCHPOINTS.COM/SUBSCRIBE
  • 5. SERIES ConsumerConnected #CCS14 Panelists Debbie Hauss Editor-in-Chief Retail TouchPoints MODERATOR Brion Reusche Industry Principal, Retail Junction Solutions Paula Rosenblum Managing Partner RSR Research
  • 6. April 2014 Paula Rosenblum Managing Partner Retail Systems Research, LLC Satisfying Customers in a Post-channel World
  • 7. 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
  • 8. 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.
  • 9. 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
  • 10. Retail’s Reset Moment 10
  • 11. 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!
  • 12. …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
  • 13. 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
  • 14. Satisfying Channel Agnostic Customers 14
  • 15. •  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
  • 16. 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
  • 17. 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
  • 18. Retailers’ Vision of the Future 18 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
  • 19. 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
  • 20. The Question That Is Only Beginning To Be Asked Is… “How Do We Meet These Fulfillment Requirements Profitably?” 20
  • 21. 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
  • 22. 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)
  • 23. 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
  • 24. 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
  • 25. 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
  • 26. Advanced Analytics: Why They Matter FUELING BUSINESS PROCESSES 26
  • 27. 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 27
  • 28. Using Data to be Proactive 28 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
  • 29. 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
  • 30. 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
  • 31. 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
  • 32. Thank You! Paula Rosenblum RSR Research prosenblum@rsrresearch.com Further Information on Products & Services: info@rsrresearch.com www.rsrresearch.com
  • 33. Presenter Brion Reusche Industry Principal Junction Solutions breusche@junctionsolutions.com JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
  • 34. JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY Omnichannel Customer Success BRION REUSCHE, PRINCIPAL, RETAIL INDUSTRY, JUNCTION SOLUTIONS
  • 35. 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
  • 36. 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
  • 37. 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
  • 38. 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
  • 39. 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?
  • 40. 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?
  • 41. 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
  • 42. 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
  • 43. 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
  • 44. 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
  • 45. 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
  • 46. JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY If You Do What You’ve Always Done…
  • 47. 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
  • 48. 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
  • 49. Case Study JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY
  • 50. 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.
  • 51. 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
  • 52. 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
  • 53. 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
  • 54. 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
  • 55. JUNCTION SOLUTIONS FOR THE RETAIL INDUSTRY Omnichannel Customer Success BRION REUSCHE, PRINCIPAL, RETAIL INDUSTRY, JUNCTION SOLUTIONS
  • 56. 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
  • 57. SERIES ConsumerConnected #CCS14 10   Thanks for attending! Don’t miss the next session: APRIL   Endless  Aisle:  Virtual   Merchandising  In  An   Omnichannel  Marketplace   2PM  ET  /  11AM  PT   ccs.retailtouchpoints.com/2014