Delivering on the promise of omni-channel

Ease of service, choice of products, best prices and increased visibility is the mantra that is key to winning the modern consumer. This can be seen from booking a flight ticket to doing a check-in online. Where online services may be implementable, the challenge lies in the bigger market – the retail merchandise domain, where multiple factors create complexity.

The ability to integrate multiple channels in a manner such that the end consumer has the unhindered ability to purchase, take delivery, return and access services through the channel of their choice, has been dubbed as “omni-channel.” An organization can sell their products to the final consumer through multiple channels including retail stores, online, mobile, wholesale/private label channels, through dealers or through a myriad of other evolving channels such as kiosks, automated retailing and hyper-channels. Most growing retailers, merchandise suppliers and distribution organizations have embarked upon some form of an omni-channel strategy. While online garners the most interest (and most budget) in organizations, other channels such as automated retailing kiosks hold much promise as well.

The challenge that organizations face in harnessing the growth potential from omni-channel remains in operational execution and integration. With online channel sales growing at impressive rates (50% – 75% year-over-year), the corporate focus on this channel too is growing proportionately, with a thrust towards e-commerce software investments. However, besides a great website, omni-channel execution requires that retail capabilities such as endless-aisle, and vendor capabilities such asdrop-shipping, be systemically integrated and executed profitably while delivering a great customer experience. These are but two examples of several operational processes that require process and data integration – almost always beyond the four walls of an organization. Successful omni-channel execution remains a data and process integration challenge to solve for most organizations, yet corporate mindshare and budgets have typically been allocated more significantly to front-end technology development (i.e. e-commerce websites) and predictive analytics for understanding consumer behavior.

A 2013 report on omni-channel strategy by research consultancy RSR reveals that organizations are coming to the realization that execution beats customer insight at this stage of the game. In today’s “winner takes all” environment, merchandising organizations are now reporting a shift in focus on achieving omni-channel status with initiatives that deliver enterprise-wide inventory visibility and customer visibility. Does this sound familiar?

Developing a single view of the customer; integrating the supply chain, inventory and order management systems; and upgrading store systems (which have difficulty in adapting to omni-channels) are becoming top objectives. Leveraging old technologies such as EDI to exchange real-time inventory and fulfilment data with trading partners, CRM integration for a single view of the customer and item data initiatives are trumping building cooler websites. This pragmatic view is bringing old problems back to the forefront with renewed focus.

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