Omni-Channel: The Future of Retail

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  • Good afternoon, thank you for attending today's presentation hosted by Ka LI doOmni-Channel: The future of RetailA few weeks ago I had the opportunity of speaking about Omni Channel with another partner, in that session we identified where the Retail industry is moving and how Omni Channel has become the new Norm in how your Customers expects to interact with Your Brand in today's fast paced world of retailIn that presentation we explored what changes were needed to react to the customers requirement of using multiple touch points to complete a single transaction One of the main take away was the reality of managing large amount of transactional data and keeping it current Todays topic covers a brief introduction to Omni Channel and how Companies are using the information gathered to plan and provide the right products in the right timeframe to keep the customer returning to their Brand.
  • It is important to realize that todays customer requires a large amount of information to always be available to make their decisions In order to help them and keep them coming back to our sites we need to manage a Hugh amount of transactional data quicklyThe original e-commerce sites were developed as single silo’s and did not interact fully with the companies other information sources in a meaningful way.
  • The Omni-channel consumer wants to use all channels together, and retailers using an Omni-channel approach will track customers across all channels, not just one or two..
  • As you can see In this chart it is a requirement across all consumer products to provide the best possible experience and keep your customers happy and coming back to your brand.From the quotes In this slide you can see that ALL areas of consumer products are now developing an Omni-Channel 360 View of their customersHome Depot, Best Buy, Urban outfitters and even the larger chains like Target are using this information to better connect to their customers to capture their loyalty for their BrandThe competition is growing as more and more we realize that OUR customer demands the best possible experience when shopping.
  • This RIS study points to the need to use information gathered from Omni-Channel to develop better analytics WE NEED TO understand our customer and provide them with the best possible shopping experience. Hit enter………..I would like to point out that Campaign analysis and forecasting, along with multi-channel planning and forecasting Are high on the merchandising priority list. These are noteworthy because they provide the highest levels of information required for future success
  • So where are we today ?In this study you can easily see that the lowest rated technology requirement for future company investment is market basket analysis where only 29 percent of retailers say they will be upgrading within next 24 months. 2 to 3 years ago this would have been the number one requirementThe highest is predictive analytics, where 46 percent say they will be upgrading and following a close second is social media where 43percent will be upgrading within 24 months
  • If you have ever visited the Macy’s site, you are forever in their database they analyze every click you take. Offering the right promotions and product related Emails to keep you coming back to their site.
  • Take a few seconds to read this quote from Terry LungrenThis quote serves to point out once again that Major Retailers are collecting vast amounts of information to provide the best possible selling solutions for their stores
  • So what is all this pointing to?Change is necessary to provide todays retailer the information to make their Brands successful Three key themes “frame” what we see ahead:Aggregated rather than transactional data is the foundation for Omni-Channel marketing operationsPredictive analytics become ubiquitous for marketers and plannersData scientists may be your key competitive weapon in the future
  • We need to provide information to support the companies strategic growth plan.Perhaps you have a new store opening or you need to integrate new store acquisitions or you’re adding new distribution centers into the mix. Using powerful visual modeling capabilities to see your entire business ecosystem, link new entities and locations, and have powerful metadata and architecture apply those changes immediately – without coding or complexity will help you grow the company.
  • Better insights to customer buying habits is key for marketers it’s always a challenge to design campaigns that deliver the RIGHT message at the RIGHT moment in a customer’s journey to purchase Understanding Customer buying habits can help you get past the what to discover the why. For example, transactional data can tell you WHAT a customer purchased was it girl’s clothing, men’s shirts, or fragrances, but it doesn't tell you WHY they did it?Externally sourced Consumer insights can provide a rich supply of data. Bringing together the power of the insight community with transactional business information this is an innovative approach that can connect the dots between what customers feel, think and say and how they purchased products.So how do we Measuring Product performance ? The best way for a product management team to establish its value to the corporation is by using a reliable set of outcome-oriented measurements that demonstrate the performance of the product(s) across all selling channels, when adding all of the product channels information into a single repository it allows the company to focus on the right marketing channels that will drive customer and revenue growth.
  • Today many business people don’t really know about predictive modeling, or optimization means. But over the next 10 years, if businesses want to thrive in a highly competitive and regulated marketplace the use of these powerful analytical techniques will have to become mainstreamWhen we look at what kids are learning in school, executives and managers may be very surprised, we were typically taught mean, mode, range, and probability theory in our first-year college statistical analytics course. Today children learn these concepts in the third grade! They are taught these methods in a very practical way. If you have x dimes, y quarters and z nickels in your pocket, then what is the chance of you pulling a dime from your pocket? I am always amazed when I sit with my grandchildren on what they have as homework assignments…
  • in order to understand who our customers are and what they value most about our brands we need to combine customers’ behavioral data into a single platform for analytic reporting to create behavioral segmentation and predictive modeling.Visualization helps put data into context and bring business cases to life. In many cases, advanced visualization capabilities allow organizations to glean insights that would be impossible otherwise.Consider the following scenario: When a consumer speaks to a customer service representative, it creates a new source of unstructured data. The representative types notes during the call.These notes contain valuable information about the customer, such as a complaint, service issue, or product feedback. Internal applications collect that data. But what happens next?
  • Some describe it as “a data analyst on steroids.” The survey results suggest that this role is still emerging in most industries, trailing behind pure business and IT roles among users of Big Data. What really sets the data scientist apart is the ability to communicate findings to both business and IT leaders in a way that can influence how an organization approaches a business challenge. A data scientist does not simply collect and report on data, but also looks at it from many angles, determines what it means, then recommends ways to apply the data.. Armed with data and analytical results, a top-tier data scientist will then communicate informed conclusions and recommendations across an organization’s leadership structure.
  • Lets talk about todays traditional warehouse, anyone who has gone through developing one has experienced that they are time consuming to build, and very expensive to change.Most likely before you’ve finished building the Data Warehouse the requirements have already changed, new players, new idea’s all dragging out the completion of the projectEarlier Traditional business intelligence approaches didn’t provide the flexibility, timeliness, and mobility required to respond to these new demands.In addition legacy Business Intelligence solutions cannot support the analysis of social media data sources
  • The Data Warehouse must be built with a strong and flexible foundation All this activity is feeding one huge pool of information, which is constantly churning. Everyone wants to understand their customers but trying to deal with that volume of information is staggering. Customers are making purchases through so many different channels it’s now more than just bringing them to shop at your store that the company needs to worry about. You must truly understand who they are and what they want so that you can build the best products and provide a consistent and integrated experience for them.
  • With real time insights across the business, you can optimize merchandising and marketing. You can rapidly identify the popularity of particular product lines, predict upcoming demand and adjust the supply chain to help ensure timely delivery of the right amount of stock to the right stores. Prices can be tailored to align with demand, as well as inventory levels; Targeted marketing programs can be developed; and pre-emptive action can be taken to avoid shipment delays, inventory shortfalls or surpluses and other such problems. Customer analytics is one of the most effective ways to create a more personalized shipping experience. It’s how retailers can see, hear and better understand their customers. Analytics enable you to create a single view of your customer, regardless of the channel through which the customer interacts with you, you can now identify variations in purchasing patterns and ultimately know your customer more intimately.
  • Todays Data Warehouse needs to be more flexible, it must be able to add or change quickly based on current information, we can no longer wait months or even weeks to change the model! Today being able to react immediately to change is key to winning over your companies competitionWe need to be able to Predict optimal pricing and maintain a price leadership position by analyzing price and demand changes We must also Select the right merchandise for each channel and fine-tune local assortment plans by drawing on insights from social media, market reports, internal sales data and customer buying patterns all at once.We need to optimize inventory across multiple channels by using leading indicators such as customer sentiment and promotional buzz (YouTube) to anticipate future demand of our products
  • I imagine its good news being able to gather so much information from so many customer touch pointsBut companies need to be able to integrate, digest and assemble all of this and that requires automation as this chart shows. Hit Enter ……… waitIt may also require adopting completely different business processes which your current staff or Technology may not be capable of providingCareful review of your strategic plan is an essential part of setting the priorities when selecting the right technology enablers for your company.
  • So where does this New Data Warehouse fit?This is where Omni-Channel really takes it up a notch. We’re talking about vast volumes and types of information. So what’s happening nowThe retailers are getting smarter and smarter and are saying, Look! there is data coming to us from all channels and we’re now generating billions of items of data every day to use in analyzing the business The skyrocketing amount of data your business produces may seem like a curse to your IT departments, but it’s really a blessing. The data you capture today may become a valuable resource for your business tomorrow
  • In today’s traditional data warehouse, we need to understand what’s in the warehouse first and then we can go pull out that information into daily or weekly reports. We realize that todays DW will continue to play a critical role in this environment, but more to support historical information not to provide a second by second view of the customerIn the future we will need to find the relationship between the documents gathered and extract it’s metadata to link them together in a meaningful way.Unstructured Data is coming from All Channels and Needs to be Incorporated into the Customer profileMachine Driven Data is Becoming more and more available even coke machines now report back their inventory levels to schedule their own replenishment deliveryImage & Voice are adding to the complexity “You-Tube” Video and Music are now part of the Omni-solution.
  • In April 2012, Information Management reported“We create 2.5 quintillion [1018] bytes of data every day, with 90% of the data in the world created in the last two years alone...Every hour, Wal-Mart handles 1 million transactions, feeding a database of 2.5 petabytes [1015 bytes], which is almost 170 times the data in the Library of Congress. The entire collection of the junk delivered by the U.S. Postal Service in one year is equal to 5 petabytes, while Google processes that amount of data in just one hour. The total amount of information in existence is estimated at a little over … a zettabyte [1021 bytes].” Way past anything that I could possible imagine?
  • What Value does the Data Warehouse provide?This is the real question, as we spoke about the need for quick transactional information has already been handled by newer technologies geared to provide instant responses to the customerWe know that the Data Warehouse is not that system!, It is the recipient of that information aggregated in such a way to plan future growth. The ability to pull information from many different sources and present them to planners in a meaningful, visual, and easy to access way is the true value provided by the Data Warehouse.
  • The arrival of new social media data sources has highlighted an important shortcoming of traditional Business Intelligence implementations To handle semi structured or unstructured data!In tomorrow’s business, you need to have that information presented to you. You may not even know the question yet! but information today needs to be pulled together in such a way that it presents solutions before you even know the questions. We’ve gone from mundane transactions to being able to correlate everything a person does through a diverse number of channels to enrich our picture of the individual customer
  • Information used today must incorporate many different input stream, it must provide not only data but image to complete the process, planners can now visualize what they are planning by combining the overall look and feel of the product directly into their planning tools.
  • It’s great to see that the ability to use data sources from both internal and external sources has now started to emerge. By combining this information we can enhance the “WHAT” with a meaningful “WHY” a customer purchased the product by understanding what external influence may have helped or hindered the product selling (example cold weather / Swim suits, or Hot winters and coat sales) which we have seen affect retail sales over the last few yearsIf you have not started to embrace the new technology by integrating all the sources well, you may not be competitive; you might be selling the wrong product by not figuring out who your customer really is, and be may be stuck with inventories of unsellable product.
  • Today, analytics make a difference in how a company does business, day by day, and even minute by minute. The analytical applications are “Mission Critical” components in the overall business processes.As you can see in this chart Best in class Organizations continually update the information that they give their planners, providing the most actionable data possible so they can make best decisions for the company
  • Make rapid product introduction decisions. Staying ahead of our competitors being first to market to get the most value for your dollarsShape demand using what-if analysis and scenario planning. Realize what is trending and incorporate it directly into your sales plan not playing catch up with your competitorsSegment demand forecasts based on key product or customer characteristics. Which will exactly Pin point where your product will sell and be the most profitableIdentify Your Customer across all Buying Channels and Provide the Right Product at the Right Time.This is the true correlation of information across all channels which will have the greatest impact on your companies profitability
  • Simple visual tool we’ve created. This is an offshoot of Charlie’s time at IDS Scheer learning about business process, how metrics flow out of them and how they are rolled up into a very critical KPI. A group of us at Kalido come from that background--------and by blending the knowledge of those of us who came from the Business Process side with the knowledge of the people who formed the basis of a group at Shell Oil who created this unique way to create a flexible data foundation, we bring a method for determining what is relevant vs. not in the Big Data world. This is the “Pyramid of Business Relevance” and is a visual rallying point for organizations to assess data for its “relevance” to the business. Any data falling outside the boundaries of the pyramid is simply not relevant and only introduces RISK and COST to the organization.
  • Done by the BUSINESS and IT professionals collaborativelyMust build the contextual model…..together.
  • Omni-Channel: The Future of Retail

    1. 1. OMNI-CHANNEL: THE FUTURE OF RETAIL
    2. 2. Even if they start from their cellphone but complete it from their laptop or a store visit?TODAY A CUSTOMER EXPECTS A SEAMLESS EXPERIENCE5/21/2013ARTK CONSULTING, LLC 2
    3. 3. NO MATTER WHAT CHANNEL THEY ACCESS YOU NOW NEED TO KNOWWHO THAT CUSTOMER IS5/21/2013ARTK CONSULTING, LLC 3 You know what their likes are What their shopping habits are What special offers will enticethem to purchase What coupons would makethem consider buying yourproducts
    4. 4. ARE YOUR CUSTOMERS INTERACTING WITH YOU OVER MULTIPLE CHANNELS?5/21/2013ARTK CONSULTING, LLC 4If Not you May be Missing the Train!Home Depot Inc. runs a complex business, attracting more than eight millionvisitors per week to HomeDepot.com, while operating 2,200 store locations.“Consumers expect Home Depot to solve their problems either in-store oronline ... Our goal is that there is zero channel conflict with a consumer.”– Hal Lawton, President, Home Depot Online“We know that 60% of our U.S. store sales are influenced by our customers’experience on bestbuy.com”– Brian Dunn, CEO, Best Buy“The most important thing is to always put the customer first, regardless ofthe channel.“– Glen Senk, CEO, Urban Outfitters“At Target, cross-channel shopping in which guests engage with us both in-store and online, is growing faster than either distinct channel.”– Kathryn Tesija, Executive Vice President of Merchandising, Target
    5. 5. RIS study identified toptechnologies retailers willbe investing in for 20135/21/2013ARTK CONSULTING, LLC 5TOP TECHNOLOGY TRENDS FOR 2013Using informationgathered from allchannels will beinstrumental in thefuture success of theBrand
    6. 6. 5/21/2013ARTK CONSULTING, LLC 6WHERE ARE WE TODAY IN DEVELOPING THE RIGHT ANALYTICS TOSUPPORT FUTURE PLANNING?The same RSR 2013 studyidentified the ability to useinformation to plan futuregrowth
    7. 7. SHOP ON TIME AT MACY’S AND FOREVER BE IN THEIR DATABASE5/21/2013ARTK CONSULTING, LLC 7Macy’s is one of the Best examplesof pulling it all together to identifyits customer and push informationto them
    8. 8. An Omni-channel go-to-market model is an idea whose time has come, atleast according to Macy’s Chairman, CEO, and President Terry Lundgren,who recently stated on the National Retail Federation’s blog:We talk a lot at Macy’s about Omni-Channel retailing. Our customer ismulti-dimensional. She is busy at work and out with friends. She always hasher mobile device in her hand. She’s active on Facebook and Twitter andYouTube and a dozen other social media sites… We want that customer tobe able to interact with Macy’s no matter where she is or how she shops. Itmakes no difference to us whether she buys something in our store oronline… or whether she is shopping from her desktop computer or herDroid or her iPad. Macy’s best customers are those who shop us in-storesand online. We have a whole series of strategies in place to drive our storecustomers to the Web, and our online customer to the stores…Today’scustomer is not monolithic. And that’s the way we are approaching ourcustomer.”5/21/2013ARTK CONSULTING, LLC 8MACY’S CHAIRMAN, CEO AND PRESIDENT – TERRY LUNGREN
    9. 9. 5/21/2013ARTK CONSULTING, LLC 9NOW THAT WE UNDERSTAND THE NEED FOR MORE INFORMATION, WHATNEEDS TO CHANGE? Aggregated Data Analytics and predictive models Data Science and Scientists
    10. 10.  Support Company Strategic Plan Create New Operating Models toImprove Revenue Mergers and AcquisitionsAGGREGATED DATA KEY TO SUPPORTING THE BUSINESS, NOT TRANSACTIONAL5/21/2013ARTK CONSULTING, LLC 10
    11. 11.  Better Insight to CustomersBuying habits Product Performance Channel Performance completeviewOMNI-CHANNEL MARKETING – UNDERSTANDING THE CONSUMER THROUGH ONLINE& OFFLINE DATA5/21/2013ARTK CONSULTING, LLC 11
    12. 12. CREATING PREDICTIVE MODELS5/21/2013ARTK CONSULTING, LLC 12 Information to drivethe futureperformance of theCompany. The Ability toChange is key toCompetitiveness.
    13. 13. Sales Transactions are notenough to truly understandyour CustomerROLE OF UNSTRUCTURED DATA IN DEVELOPING THE PREDICTIVE MODEL5/21/2013ARTK CONSULTING, LLC 13
    14. 14. A NEW ROLE OF “DATA SCIENTIST”5/21/2013ARTK CONSULTING, LLC 14Not only Managingthe Data, butunderstanding howto use it to provideinsight on yourCustomers
    15. 15.  Time consuming to build. Information designed toanswer only knownquestions. Single Silo / Departmentuse. Expensive to makechanges.5/21/2013ARTK CONSULTING, LLC 15TRADITIONAL WAREHOUSE NOT BUILT FOR CHANGEBottom Line: Inhibitor.
    16. 16. TODAYS DATA WAREHOUSE FOUNDATION MUST HAVE….5/21/2013ARTK CONSULTING, LLC 16Integrated information that can berapidly updated and enhanced toprovide the most complete view ofyour customers and their behaviors.
    17. 17.  Customer Group(s) Region(s) Interaction ChannelsINFORMATION MUST BE COMBINED INTO USABLE CONTEXT:5/21/2013ARTK CONSULTING, LLC 17
    18. 18. Change is Inevitable Pricing Pressures Competitors Like Products Similar EventsMUST MIRROR THE DYNAMIC NATURE OF MARKETS AND COMPETITION5/21/2013ARTK CONSULTING, LLC 18
    19. 19. ABILITY TO RAPIDLY RESPOND TO THESE CHANGES IS THE KEY TOCOMPETING IN TODAYS MARKETPLACEEnterprise view is thenumber one Key toCompeting today.5/21/2013ARTK CONSULTING, LLC 19
    20. 20. WHERE DOES THE NEW DATA WAREHOUSE FIT IN THE NEW WORLD OFOMNI-CHANNEL?5/21/2013ARTK CONSULTING, LLC 20Collection of informationacross all Channels andCustomer Touch Points.
    21. 21. STRETCHING THE LIMITATIONS OF OLDER DATA WAREHOUSE APPLICATIONS5/21/2013ARTK CONSULTING, LLC 21 Constantly changing orNew Data Sources arebeing introduced Daily Unstructured Data fromAll Channels Needs to beIncorporated into theCustomer profile Machine Driven Data isBecoming more available Image & Voice are addingto the complexity
    22. 22.  Process-mediated data Structured operationaldata Machine-generated data Human-sourced: ExternalREVELANT DATA CAN COME FROM ANYWHERE5/21/2013ARTK CONSULTING, LLC 22
    23. 23. WHAT VALUE DOES THE DATA WAREHOUSE BRINGS TO OMNI-CHANNEL?5/21/2013ARTK CONSULTING, LLC 23Pulling it all together to create asingle view of your Customers
    24. 24. Nightly Batch or weeklyUpdates are no longerenough to satisfy therequirements in todaycompaniesTHE NEW DATA WAREHOUSE CONCEPT IS A GAME CHANGER5/21/2013ARTK CONSULTING, LLC 24
    25. 25. CONTEXTUAL DRIVEN MODEL IS THE NEW NORMAL5/21/2013ARTK CONSULTING, LLC 25Creating a MarketingCampaign combininginformation from multipleinput streams and datatypes:
    26. 26.  Ability to add new Data Sources New Syndicated Data Sources Geographic Sales by Category Household Spending Habits Weather AnalysisNEW CHARACTERISTICS REQUIRED:5/21/2013ARTK CONSULTING, LLC 26
    27. 27. Ability to integrate informationquickly will give planners the timeto analyze and act while Data is stillactionable.SPEED MATTERS?5/21/2013ARTK CONSULTING, LLC 27
    28. 28. 5/21/2013ARTK CONSULTING, LLC 28SO WHAT IS THE MAIN REASON FOR UPDATING YOUR CURRENT DATAWAREHOUSE?Make rapid product introductiondecisions.Shape demand using what-if analysis andscenario planning.Segment demand forecasts based on keyproduct or customer characteristics.Identify Your Customer across all BuyingChannels and Provide the Right Product atthe Right Time.Beat YourCompetitionto Market:To radically improve speed-to-insight.
    29. 29. 5/21/2013ARTK CONSULTING, LLC 29QUESTIONS?
    30. 30. 30 May 21, 2013© Kalido I Kalido Confidential I May 21, 2013Omni-Channel Data: Context Required
    31. 31. 31 May 21, 2013© Kalido I Kalido Confidential I May 21, 2013Realities For The Data ProfessionalData coming fromeverywhereTools to mine andanalyze data hittingevery laptop anddesktopThe I.T. equivalent ofa stampede towardsa cliff
    32. 32. 32 May 21, 2013© Kalido I Kalido Confidential I May 21, 2013Some Simple TruthsIf you can’t quickly find its:business relevance…business context…business contribution…Data from any channel has little(zero) value.
    33. 33. 33 May 21, 2013© Kalido I Kalido Confidential I May 21, 2013Aggregating With Business Context Is KeyAggregated data yieldssharper insights forplanners and marketersNeeds business context tocreate business valueEstablishing a contextualmodel built aroundbusiness use caseprovides a litmus test forbusiness relevance
    34. 34. 34 May 21, 2013© Kalido I Kalido Confidential I May 21, 2013Business Information ModelProvides context as to how datais defined by and used by thebusinessEnables rapid integration of newdata sources as they comeavailableEnables collaboration betweendata professional and businessprofessional
    35. 35. 35 May 21, 2013© Kalido I Kalido Confidential I May 21, 2013Thirty Minute ClassroomThursday, May 23rd11 a.m. Eastern“Rapidly Creating a Data Foundation For Omni-Channel Retailing”• 10-minute tutorial• Sample of a contextual business model• Demonstration of Business Information Modelingget.kalido.com/data-foundation-for-oc
    36. 36. 36 May 21, 2013© Kalido I Kalido Confidential I May 21, 2013Summers Sessions: Two Tracks For YOUSeries KickoffMay 14: Data Scientist: Your must-havebusiness investment now.(30 Minute Learning Sessions)May 28 Rapid Data Integrationtools and methodsJune 4 Harmonizing Data for theWarehouseJune 11 Rapid IterationMethodology UsingInformation ModelsSeries KickoffJune 25: Find your data warehouse’s hiddencosts before they find you.(30 Minute Learning Sessions)July 2 The real cost per release cycleJuly 9 Automate to reduce operating costsJuly 16 Reduce tool costJuly 23 Scale drives cost reductionsAgile Information Foundationfor the Data ScientistTCO: Find data warehousecosts before they find you.get.kalido/summer-series
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