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Ris 2015 deck
1. Omnichannel’s Biggest Challenge –
Leadership & Corporate Culture
Anoop Kulshreshtha
Vice President, Digital Technology
Barneys New York
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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.
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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.
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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.
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6. Omnichannel Opportunities
• Cohesive & collaborative internal processes.
• Designing omnichannel capable fulfillment
operations.
• Customer centricity
• Data driven decision management.
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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.
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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.
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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
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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.
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16. Designing Omnichannel Capable
Fulfillment Operations
• Choose specific technology
– Pick by paper/RF / by voice / by light
– Balance between performance, flexibility and cost.
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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.
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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.
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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.
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22. Customer Centricity – Building Blocks
• Fit-For-Purpose Business Processes
– Reduce organizational complexities for your most
profitable and lucrative products.
– Minimize one off workarounds.
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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.
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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)
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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.
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27. Data-Driven Decision Management –
Applications in Retail – Data Science
• Advanced Data Modeling Perquisites
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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.
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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.
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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.
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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.