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Ris 2015 deck
- 1. Omnichannel’s Biggest Challenge – Leadership & Corporate Culture Anoop Kulshreshtha Vice President, Digital Technology Barneys New York Barneys New York 1
- 2. Omnichannel by numbers: • E-Retail sales are forecast to increase by 62% to $327 billion in 2016 from $202 billion in 2012. • Sales on ‘smartphones’ will touch $27 billion. • 2014 Cyber Monday had a peak traffic of 13 million V/PM. In 2012 it was 8.5 million V/PM. • 63% of searchers use multiple devices to find local business. • 80% of local searches on mobile phone converts. Barneys New York 2
- 3. Omnichannel goes beyond fulfillment Barneys New York 3
- 4. Omnichannel Framework • Synchronized operating model in which all of company’s channels are aligned and present a single face to the customer. • Brand effectively operates as a single channel, orchestrating high value customer experience across all touch points. • Customer’s each interaction becomes seamless extension of the previous interaction. Barneys New York 4
- 5. Omnichannel Framework • Omnichannel retailers are nimble enough to respond to customer’s increasingly dynamic, accessible and continuous decision making. • Customer’s expectations: Know Me, Show Me You Know Me, Enable Me & Value Me. • Multi-channel is NOT omnichannel. Barneys New York 5
- 6. Omnichannel Opportunities • Cohesive & collaborative internal processes. • Designing omnichannel capable fulfillment operations. • Customer centricity • Data driven decision management. Barneys New York 6
- 7. Barneys New York 7
- 8. Cohesive & collaborative internal processes – Failure points • Technology infrastructure investments before equipping internal processes. • Lack of visibility in any given team’s working. • Structural constraints such as disproportionately sized business within a brand. • Not all channels are owned by the same organization within the company. Barneys New York 8
- 9. Cohesive & collaborative internal processes - Solutions • Every department needs to be in complete alignment. • Create synchronized channel SLA, goals and targets. • Creating omnichannel organization models should be a priority. • Move beyond traditional business KPI to measure success. Barneys New York 9
- 10. Cohesive & collaborative internal processes - Solutions • Promote cross functional teams – Leader is an enabler – Managing diversity of culture and thoughts – Trust is even more crucial for success – Clear goals are drivers of autonomy – Early “wins” are important – Constant communication is the glue Barneys New York 10
- 11. Designing Omnichannel Capable Fulfillment Operations • Buy online and pick it up in the store. • Walk to a store, try it on & then get it delivered to your home. • Know exact shipping costs & delivery time before placing an order. • Buy online and then return it at the store. • Get your order fulfilled from multiple locations. Barneys New York 11
- 12. Designing Omnichannel Capable Fulfillment Operations • Evaluate synergies across channels. Barneys New York 12
- 13. Designing Omnichannel Capable Fulfillment Operations • Find the best operating methods. Barneys New York 13
- 14. Designing Omnichannel Capable Fulfillment Operations • Optimal technology stack for each operating method Barneys New York 14
- 15. Designing Omnichannel Capable Fulfillment Operations • Define optimal flow path Barneys New York 15
- 16. Designing Omnichannel Capable Fulfillment Operations • Choose specific technology – Pick by paper/RF / by voice / by light – Balance between performance, flexibility and cost. Barneys New York 16
- 17. Barneys New York 17
- 18. Customer vs Product Centricity Barneys New York 18
- 19. Customer Centricity – Building Blocks • Customer Life-Cycle View – Reorient entire business model around customer. – Clear articulation of the value that customer represents to the bottomline. – Defined and quantified customer segmentation strategy. – Business streams deliver maximum value to the best customer for the least cost. Barneys New York 19
- 20. Customer Centricity – Building Blocks • Solution Mindset – Solutions replace products as basic customer value preposition. – Work with competitors and partners to fulfill customer needs. – Go beyond off-the-self solutions to customized products. Barneys New York 20
- 21. Customer Centricity – Building Blocks • Can-Do Customer Interface – Deploy skills and authority to tailor solutions at point of contact. – Develop more self service options for the customers. Barneys New York 21
- 22. Customer Centricity – Building Blocks • Fit-For-Purpose Business Processes – Reduce organizational complexities for your most profitable and lucrative products. – Minimize one off workarounds. Barneys New York 22
- 23. Data-Driven Decision Management –DDDM is an approach to business governance that values decisions that can be backed up with data that can be verified. Barneys New York 23
- 24. Data-Driven Decision Management • Google Project Oxygen – 8 simple rules for being a better manager. Barneys New York 24
- 25. Data-Driven Decision Management - Project Oxygen • Step 1- Collect Data – Start with a question and define what information is required. “Do managers actually matters?” • Step 2 – What data to use – Existing data ( reviews) – New data (Segmentation into top and bottom quartile) Barneys New York 25
- 26. Data-Driven Decision Management - Project Oxygen • Step 3- Analytics – Regression analysis reveals big difference in team productivity, happiness and turnover. • Step 4 – New data collection. – HR instituted a great manager award. – Additional data used for text analysis. • Step 5 – Using the insights – 8 point recommendation on how to be a better manager. Barneys New York 26
- 27. Data-Driven Decision Management – Applications in Retail – Data Science • Advanced Data Modeling Perquisites Barneys New York 27
- 28. Data-Driven Decision Management – Applications in Retail • “Past results do not guarantee future performance ” – Modeling future based upon learning from past is not enough. • Clear & diversified data strategy - prepare multiple data sources including external data. • Use multiple models: – RFM model (recent – frequency – monetary value) – Advanced model to predict customer reaction to product / price points / brands. Barneys New York 28
- 29. Data-Driven Decision Management – Applications in Retail • Point of Sale – Are there more efficient ways to market? • Email/Text based targeted marketing through POS • Ability to ‘flash sale’ to the customer based upon past purchase history. – Do I have the right amount of store inventory? • Past order history can provide an insight into strong and lean periods for seasonal and cyclic products. Barneys New York 29
- 30. Data-Driven Decision Management – Applications in Retail • Price Optimization – Retail inventory, pricing and POS data spread across multiple systems – Faster processing time to answer questions like: • Are higher price products selling in select markets? • Should we have geography based inventory/pricing optimization? – Leverage big data to migrate all required data to centralized hub. – Use techniques such as MapReduce to present daily intelligence in a consolidated pricing portal. Barneys New York 30
Editor's Notes
- Good morning everyone! Its good to be here. Now before we dive deeper into the impact of business processes and leadership on omnichannel implementation, I would like to throw up some numbers on the screen which wont be surprising to the audience in this room.
- <First run through all point We all expect this trend to continue in the foreseeable future. We are however still to identify exact patterns in which consumer uses multiple devices and channels. And that means, retailers have to optimize across all channels and possible scenarios.
- <Read the title> More often than not when I participate in Omnichannel enablement conversations, focus on technology far outweighs the roles of business processes maturity to support the technology. That needs to change!!
- This unified view helps them be consistent with the customer. Thus enabling customers to interact with the brand at their own choosing. Example being start an order online but complete it in a store.
- Read it as retailiers with capacity to create personalized marketing strategy. Order history; Wish list Measured by quality of personalization Customer reviews/Q&A/Ratings Enhanced loyalty programs/Flexible bundling of solutions Your metrics across each channel may look good independently but the net promoter score still falter. Metrics used to measure success by channel has its limitations and probably the reason why we see Head of Omnichannel an increasingly common role at retailers.
- Now that we have kind of really expanded the definition of omnichannel way beyond fulfillment, lets examine so key challeges… Or should I say opportunities. There are many other areas that can be discussed such as customer service; Role of logistics etc but given the constraints of time I would like to foucs on these 4 topics.
- Lets take 5 seconds to read this <Long Pause> ….I hope that is not your and my definition of collaboration…technology is a tool, collaboration has been sough way before sharepoint was created.
- 1. 2. If merchants, buyers and marketing are working in their own silos, its very difficult to create flash sales events to effectively manage inventory that has to be liquidated. 3. Traditionally stores are a much bigger business than digital and may have a larger say in annual buy plans. 4. Call centers own voice customer service but marketing runs social media, emails and live chats.
- No surprises there 2 3. Transcend traditional boundries, create effective cross functional teams, create new metrics for measuring success. 4. Find new performance metrics that better define the omnichannel reality of your specific business
- Each team member has something to contirbute and has a very unique contexteual knowledge. Are usually global teams with many different school of thoughts. Since there is no established reporting patterns Decision making is always bottoms up and there is no micro managing of teams. To remove doubts and instill confidence. Keeps things transparent and help identify risks and challenges early on in the project. HBR case study on chilean miners is a great study on how to create a cross functional winning team that defies all odds
- This is what Omnichannel looks to the guy responsible for fulfillment. <Run through the list> And if you are new york, a high end fashion retailer will send a messenger boy with your dress which you can try on and return in case you do not like it. Messenger boy waits in case he has to carry back the return… Its not Barneys, yet…..
- You really cannot copy anyone else’s DC operations. It has to be unique to your busiess. Lets explore 5 step process of designing an Omni channel fulfillment process For example if your pick process is similar for stores and ecommerce, you can create a common pick cycle. Create a table like above to identify synergies for your business
- If your business is such that some SKUs alwa
- Once you have identified the optimal operating method, its time to pick the technology for each operating method that provides the best value. You can create a table like this, where business processes lay horizontally and each channel represent a column. Depending upon your pick profile, you may want to delay the packaging till the very end in order to share inventory. And then there is a small matter of who gets the credit if order is placed by an associate but shipped online.
- Once you have picked up the technology stack, its time to identify optimal flow paths from picking to sorting and packing. For example, you may use goods to person for retail and wholesale but unit sorter for packing ecomm and wholesale.
- Then finally you choose specific technology for each function.
- And its Dilbert again…. You know where this is going.
- Customer centricity is really at the heart of all omnichannel initiatives. Here is a quick comparison. <Run through the list> Investment required: Depending upon sophisticiation of your customer Now the last one is interesting. Even though I believe in it as a general rule, there are few noteworthy exceptions to it. The modern one being Apple and then Ford about a century ago. But it will be risky to think of them as a general rule rather than an exception. Steve Jobs did not believe in customer research. He wanted to build fabulous products which will make customers flock to him. And boy they did…spectacularly. But Apple will not be apple forever. Soon they will become customer centric too.
- Move beyond event marketing to understanding customer’s life cycle journey. Companies like Amazon do it really well. 2. 3. 4. Business streams: product development, customer care etc
- Solution mindset creates interesting business alliances which are usually win win win, for customer and for service providers
- For example empowering associates not just create happy customers but will create one-on-one bond between associates and customers, which is of crucial importance to high end retailers like barneys but also leads to employee satisfaction While first point is about empowering associates, second one is most definitely about enabling customers.
- <Run through the list> This will minimize the organizational effort required to move from product centric to customer centric.
- <run through the defition> DDDM and Customer centricity are really two faces of the same coin and two extremely fascinating areas of study.
- How many of you know about google’s project oxygen Be a good coach Empower don’t micromanage Be interested in your reportees well being Be result oriented Be a good communicater and listner Help in your reportees career development Have a clear vision Have a technial skill Now while these rules are valuable by themselves, the reason why I bring them up here is to talk more about how Google HR arrived at them. A case study in DDDM.
- In order to collect data you need to know what informaiton is required. Existing data did not reveal much informaiton, so create a different slicing and dicing of data including new attributes
- This process show that Google is a DDDM company.
- Lets talk about its application in retail. In order to gain insight into your customer, you got to be able to create advanced model. <Run through each list> Micro segmentation can be invaluable. Most valuable customers segments can tell you about on whom to focus your marketing $$ on Active but not so valuable customer segmentation can tell you about what kind of flexibility you need to add to your offerings to make them more profitable. Inactive customer segmentation can tell you where you are have lapse, thus helping you with process improvements.
- 1. First quote is from finance websites but very applicable to data modeling. You have to be able to create future patterns.
- Finally price optimization