Global Trade March/April 2014 : Page 44

THE FOUR RULES OF OMNICHANNELS Some companies are seriously lacking when it comes to facilitating a successful omnichannel experience, explains Branden Jenkins, General Manager of Global Retail at San Mateo, Calif.-based software company NetSuite. “Customers expect to interact with brands through any channel, at any time, without sacrificing experience or service,” he says, “yet many retailers are ill-prepared to provide it with inflexible, outdated processes and systems that are unable to adjust to change.” Jenkins says meeting the demands of an omnichannel customer requires commitment to the following four principles: Seamless commerce Retailers must offer immediate access to products, whether mobile, online or in-store, and provide a shopping experience built around the new reality that most consumers make their browsing and purchasing commitments online, often before seeing the product in person. Order orchestration Fulfilling the orders of an omnichannel customer requires every warehouse, distribution center and retail store to become a component of a singular, integrated, enterprise-wide inventory. New business models The advent of hybrid business models—such as subscription-based services for digital and physical products—presents opportunities for retailers. Vendors offering access to such services will win the omnichannel customer and earn loyalty over competitors whose siloed approach guarantees a disconnect between brand and buyer. Future-proofing Nobody knows whether the next major retail trend will be a channel, touch-point, device or business model. Too many retailers operate on narrowly designed, purpose-built systems, which render it impossible to fully embrace these new opportunities. Jenkins encourages companies to do business in the manner consumers demand it today. Bimschleger says. “If consumers aren’t satisfied, their experience will be impacted.” Technology can also present problems for omnichannel retailers. Bimschleger cities customer order visibility, as well as being able to view all inventory across all retail stores and distribution centers, as essential elements of a successful omnichannel strategy. Unfortunately, he admits that this can prove a herculean task for retailers with multiple inventory systems driving their business. Maris agrees that setting up an omnichannel may be a cumbersome process, but he says it reaps tremendous benefits. “It’s very appealing to customers to have the choice to buy online, at a brick-and-mortar store or online within a store using their system or smartphone,” Maris says. Adapting to customer demand, however, requires retailers to develop a new attitude toward commerce. He says vendors must be prepared to manage the changing demands on the product delivery process, as well as learn what can and can’t be purchased through omnichannel distribution models—for instance, pharmaceuticals and alcohol. Retailers need to pay attention to these issues, Maris says, since statistics point to a surge of omnichannel purchases in the future. Bimschleger concurs, explaining that e-commerce currently represents 8 percent of total retail sales—a figure that is expected to double by 2017. Mobile-commerce, or m-commerce, accounts for roughly 15 percent of these sales, he adds. “It’s not unusual for a pure commerce company today to have 70-plus percent of their sales through their own app,” Bimschleger says. After all, consumers carry their smartphones with them 85 percent of the time, which means that their e-commerce and m-commerce interactions with retailers will only increase in the years to come. He cautions that vendors failing to provide a “seamless experience” for customers via an omnichannel strategy will likely fall behind the curve. “Retailers need to understand the necessary technology architecture and make sure it provides a consistent, seamless customer experience across any channel,” Bimschleger says. He explains that a consistent omnichannel experience includes distribution, fulfillment, returns processing, disposition and customer service. “The [key elements] usually revolve around one view of all inventory visibility across all distribution centers and stores, fulfillment and customer order visibility,” he adds. Fortunately, Bimschleger says, many retailers are well-versed in omnichannel strategies and are already providing seamless customer experiences. It’s a good thing, indeed, he says, since it’s a sink-or-swim economy. “Look, omnichannel isn’t just the wave of the future—it’s going on right now.” Nowhere is this more evident than in the case of Nail Rock. The brand’s Neil Jerzak says Nail Rock’s foray into the world of omnichannel retailing has been nothing but positive—and lucrative. Thanks to the brand’s partnership with SEKO’s Omnichannel Logistics division, Nail Rock has enjoyed higher profit margins due to e-commerce, as well as greater product visibility. “More and more people shop online, so that’s a real focus for us as a business,” Jerzak says. “Omnichannel retailing is just the way people want to go.” n 44 GLOBAL TRADE MARCH-APRIL 2014

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