Ten Best Practices for Omni-Channel Retail

Achieving Excellence in Omni-Channel Retail With Integrated Technology

Buzz.Omni-channel retail is getting a lot of buzz these days. For good reason: consumers are shopping in new ways, and they expect to relate with brands on their own terms, whenever, wherever and however they desire. Faced with a world of options at their fingertips, gaining consumer loyalty can be an uphill battle.

Gone are the days when shoppers would patiently wait for associates to phone different stores in hopes of locating a desired item, only to wait several days to finally complete a purchase.

We live in a real-time world. With more and more retailers offering same-day deliveries, consumer expectations with regards to order fulfillment is at an all-time high. What’s more, consumers are increasingly unwilling to wait for package delivery: many want to pick up their purchases on-the-go, at the mall or from their local store.

Omni-channel excellence is about more than logistics: it’s also about relationships. With so many brands competing for the minds, eyes and hearts of the market, it’s clear that those who succeed in making a personal connection will come out on top.

Today’s retailers need the people, processes and technology in place to enable the long-term learning relationships with their customers that deliver relevant value at every interaction. A holistic view of the business is the foundation of this much-needed approach.

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SMARTER STORE

FULFILLMENT

Enabling the endless aisle.

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ROLE OF THE STORE

REDEFINED

The purchase journey is non-linear.

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CENTRALIZED ENTERPRISE INVENTORY

A holistic view of real-time inventory.

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ORDER ORCHESTRATION

Every step of the way.

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A SINGLE VIEW OF THE CUSTOMER

Marrying online and in-store.

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ASSOCIATEEMPOWERMENT

The human element.

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CUSTOMER SERVICE

ANYWHERE

Making the most of every

interaction.

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DEMAND-DRIVEN

INVENTORY

Right product, right place, right time.

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REAL-TIME REPORTING

& ANALYTICS

You can’t manage what

you don’t measure.

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PERSONALIZEDEXPERIENCES

Beyond segmentation.

SMARTER STORE FULFILLMENTEnabling the endless aisle.

Enabling store fulfillment makes good business sense in many ways. Retailers can optimize processes and inventory by shipping items from overstocked stores or from the closest location to the customer. By enabling in-store pickup of online orders, retailers drive traffic to brick-and-mortar locations, which often results in increased sales. In fact, 23% of consumers end up purchasing more items when picking up an online order from stores. (AT Kearney, On Solid Ground)

Retailers can also adopt an “endless aisle” concept whereby items not available in the location currently being shopped can be shipped from another store or warehouse, or reserved for pickup at the next closest location. Cross-channel shopping and product research is here to stay: two-thirds of consumers who purchase online use the store before or after the transaction. (AT Kearney, On Solid

Ground)

How can retailers enable new fulfillment processes without burdening store teams with non-selling tasks? Mobile devices that free associates from the back store, allowing them to focus on customers, not boxes, are a critical component to smarter store fulfillment. Not only can mobile technology enable efficient processing of receipts and transfers, but it should also be employed for cross-channel stock checks, product knowledge, transaction processing and even clienteling.

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23% of consumers purchase more items when picking up an online order from stores. AT Kearney, On Solid Ground

ROLE OF THE STORE REDEFINED

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The purchase journey is non-linear.

The physical store is involved at various stages along the shopping journey in 71% of online sales. (AT

Kearney, On Solid Ground) We often think of customers researching online, then purchasing in stores, but the reverse is also true. Rather than fearing showrooming, retailers need to redefine the role of the store to encourage brand loyalty and make the purchase journey an easy one.

The role of brick-and-mortar stores in today’s omni-channel market has evolved. More than ever before, stores need to provide an immersive sensory experience and highly personalized customer service. Whereas web-based retailers can benefit from lower overhead costs that sometimes gives them a competitive pricing edge, only physical retailers can enable customers to touch, feel, try, smell, and experience products. And while it’s true that some customers may ultimately decide to complete their purchase online, Gallup reports that the threat from showrooming has been vastly overstated.

Forrester expects combined online and web-influenced retail sales to reach $1.8 trillion by 2017, up from $1.3 trillion in 2013. (Forrester, Minding the Omni-Channel Commerce Gap) Retailers can no longer manage various channels as silos. Collaboration is key to finding ways that the brick and mortar store can continue to be a relevant, profitable channel. For instance, one of the key differentiators of the physical store is the human factor. To remain competitive in today’s omni-channel marketplace, retailers must enable associates to build deeper, more personal relationships with customers and empower associates to make entrepreneurial decisions that impact the business.

CENTRALIZED ENTERPRISE INVENTORYA holistic view of real-time inventory.

Obtaining a centralized view of real-time inventory is a must, not only for buyers and head-office decision-makers, but also for store-level users and even customers. A recent survey by Forrester concluded that 71% of customers expect to view in-store inventory online. (Forrester, Minding the Omni-Channel Commerce Gap) Visibility is the most basic requirement of any omni-channel organization: obtaining an overview that breaks down traditional barriers between channels is a must.

With a centralized enterprise inventory, retailers have the visibility to determine the most effective fulfillment method for customer orders and retail replenishment. Omni-channel retailers need options: vendor PO generation, drop-shipments from vendors, fulfillment from stores or warehouses and more. A centralized enterprise inventory equips retailers with the data needed to always deliver the right product to the right place at the right time.

Aside from enabling smarter, more accurate decisions about purchasing, allocations, replenishment and transfers, centralized enterprise inventory is just plain good customer service! 39% of consumers are unlikely or very unlikely to visit a retailer’s store if the online store does not provide physical store inventory. (Forrester, Minding the Omni-

Channel Commerce Gap) Today’s customers feel time-crunched, and don’t want to risk wasting precious hours by traveling to stores only to discover that their desired product is unavailable.

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71% of consumers expect to view

in-store inventory online.

Forrester, Minding the Omni-Channel Commerce Gap

ORDER ORCHESTRATIONEvery step of the way.

To the consumer, ordering products online and picking up in a store or ordering an out-of-stock item from a store for shipment to their home should seem like pretty simple processes. I click, I pay, I pick up. Retailers know that, in reality, the order process behind the scenes can be quite complex, and requires brilliant orchestration to make it appear simple to the consumer.

From the time an order is initiated, carefully thought out processes and procedures are required to ensure that everything goes as planned, or when exceptions occur, that they are dealt with appropriately. Order fulfillment rules based on inventory levels or geographic location should be considered in fulfillment algorithms. Rules for dealing with exceptions including the management of returns, aging orders and inventory discrepancies should be planned ahead of time and related reporting tools made available.

Communication is a key component of order orchestration. For example, customer and associate notifications for order status should be e-mailed automatically. Forrester reports that “with 25% of consumers using pickup as a means to obtain their purchase on the same day, it is perhaps no surprise that 41% of consumers expect to be notified that their order has been picked and is ready for collection in under an hour. 38% of consumers cited that they are likely to complete their online purchase if the retailer can quickly confirm their order is ready for pickup.” (Forrester, Minding the Omni-Channel Commerce Gap)

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41% of consumers expect to be notified within one hour that their order is ready for pickup in store. Forrester, Minding the Omni-Channel Commerce Gap

A SINGLE VIEW OF THE CUSTOMERMarrying online and in-store.

From an anonymous web visitor to an identified customer, omni-channel retailers must track and unify customer engagement online and in-store. Just like having a centralized view of inventory, having a single view of the customer’s complete order history, purchase behavior and preferences is a key component of omni-channel retail.

There was a time when few retailers were able to marry consumers online behaviors with their enterprise data. Today, customer profiles must extend to social and mobile inputs for a single view of the customer. The customer journey in no longer linear: connected consumers browse, research and ultimately buy across channels. In order to create truly effective marketing campaigns and deliver relevant communications to customers, retailers require a holistic view.

The benefits of a single view of the customer are numerous: greater customer retention and frequency due to better service, increased opportunities for relevant up-selling and cross-selling, and, overall, more personalized experiences for each individual customer.

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PERSONALIZED EXPERIENCESBeyond segmentation.

Once the holistic view of the customer has been obtained, one of the most impactful ways it can be used to benefit retailers is in creating personalized customer experiences. It is through long-standing learning relationships with the customer that retailers will be able to craft highly personal, relevant brand experiences.

The first step towards engaging customers with personalized experiences is segmentation. Communication fatigue is a real threat to retail marketers, with consumers receiving over 80 e-mails, excluding work-related messages, each day (Radicadi, Email Statistics Report 2013-2017). Most retail marketing messages, by far, are never opened. Consumers are tired of receiving communications all the time about products or services that don’t interest them. Omni-channel retailers who take the time to create personal messages that really resonate with individual consumers are the ones who will come out on top: a recent Gallup study found that fully engaged customers spend 23% more. (Gallup State of the

American Consumer)

While segmenting customers to target messaging is becoming increasingly important, retailers looking to the future are going beyond segmentation into the realm of personalization. Aside from simply adding dynamic name fields to communications, smart retailers are delivering personalized product recommendations based on intelligent algorithms. Associates can have an important impact with regards to crafting a personalized customer experience, especially when empowered with tools such as clienteling for a single view of the customer.

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Consumers receive over 80 e-mails,

excluding work-related

messages, each day.

Radicadi, E-Mail Statistics Report 2013-2017

ASSOCIATE EMPOWERMENTThe human element.

Although it’s true that many of the factors that contribute to omni-channel retail success are technological, perhaps the greatest influencer of the customer experience is human: the associates in your stores. A warm, friendly and knowledgeable associate can be the key differentiator when it comes to omni-channel success. Your associates represent your brand in the most personal way, and can impact not only short-term in-store revenues, but customer satisfaction and opinions of the brand as a whole. In fact, 61% of consumers say that they still value or highly value asking a sales associate for product recommendations. (Forrester, Minding the Omni-Channel Commerce Gap)

One of the common challenges many retailers face is that modern consumers are so equipped with technology that they may often be more informed about products than the brand’s own associates. 42% of consumers research their purchases online while in stores. (Google, Mobile In-Store Research Study) Whereas consumers can access price comparison apps, product reviews and information from their mobile phones, many associates aren’t provided with the same level of information. In an omni-channel world, associate product knowledge needs to go beyond what’s on hand in their physical location: 45% of consumers expect associates to be knowledgeable about online-only products, and 69% of consumers expect that store associates be armed with a mobile device. (Forrester, Minding the Omni-Channel Commerce Gap)

In addition to providing omni-channel product information to associates, mobile technology can also be a key enabler of improved productivity and customer relationship-building. Retailers implementing mobile technology in stores need to make the most of their investment by considering all the ways it can be used, including product knowledge, transaction processing, inventory management, clienteling, social outreach and more.

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61% of consumers value asking a sales associate for product recommendations.Forrester, Minding the Omni-Channel Commerce Gap

CUSTOMER SERVICEANYWHEREMaking the most of every interaction.

In an ideal world, every shopper would be thrilled with every purchase, and returns would be a rarity. However, reality is that online purchases are often made without touching, trying on or seeing the products in real-life. That means that sometimes consumers end up with products that weren’t quite what they expected. While returns processing can bring about extra handling and management costs for retailers, returns can also be a key relationship-building opportunity and even a chance to sell more.

One of the most desired features by online shoppers is the ability to return in store. AT Kearney reports “returns is the stage in the shopping journey where consumers demonstrate the highest preference for physical stores.” (AT Kearney, On Solid Ground) Enabling store returns of online purchases makes good business sense, as any time retailers can drive foot traffic to stores is an opportunity to delight the customer, learn more about their wants and needs and ultimately sell more.

Customer service is about more than returns management, of course. Omni-channel retailers need to equip customer-facing teams at every touchpoint with the data they need to respond to customer concerns and questions. Whether customers are visiting a store, phoning a call center or e-mailing a customer service agent, the service level should be consistent and the experience should be seamless.

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DEMAND-DRIVEN INVENTORYRight product, right place, right time.

One of the key benefits retailers can gain from going truly omni-channel is that they can begin to truly tailor assortments according to demand. There is no longer a need for stores in all regions to carry all products “just in case”. Since ordering from other stores or from online becomes a streamlined process, stores can carry more localized assortments without the risk of disappointing customers. A recent RSR study found that 81% of retailers agree that localized assortments are important or very important to their overall strategy. (Retail Systems Research, Retail Supply Chain Strategy)

Having the right products at the right place and the right time is one of the pillars of retail success. It’s an ongoing challenge, with 65% of retailers agreeing or strongly agreeing that they will need to rethink their supply chain design in the next five years because of emerging cross-channel fulfillment. (Retail Systems Research, Retail Supply Chain Strategy) Retailers operating disparate systems with incomplete inventory visibility will undoubtedly struggle to keep up. Conversely, retailers with fully-integrated omni-channel retail solutions powering the business are armed with the data they need to get assortments right.

Real-time customer, transaction and inventory data are critical components of demand-driven inventory. As an example, online metrics such as pageviews, cart abandonment and search queries can be important indicators of product trends for the brand as a whole. Customer preference data and wishlists input by associates using in-store clienteling can also be used by buyers to determine buying trends across the board.

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81% of retailers believe that localized assortments are

important to their overall strategy. Retail Systems Research, Retail Supply Chain Strategy

REAL-TIME REPORTING & ANALYTICSYou can’t manage what you don’t measure.

As the old adage goes, “you can’t manage what you don’t measure”. H. James Harrington echoes this sentiment in writing “Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.”

Omni-channel retailers must break down the silos that often exist in complex organizations. To promote a culture that embraces omni-channel retailing, operations must be aligned with data. All data collected at the store level and from e-commerce must be fed to back-office enterprise systems for a holistic view of the business’ health.

Data extracted from the enterprise system is used to create and view reports and analytical dashboards on transactional, product or customer profile data that all key stakeholders can use for continual improvement. Reports generated in the reporting and analytics solutions must be actionable. Actionable reporting includes automated alerts, scheduling and delivery of reports and processes and integration with the back-office enterprise systems.

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For 25 years, Raymark has been empowering retail with leading-edge enterprise software solutions that help the world’s most prestigious international retailers optimize stock turns, build customer loyalty, and increase sales. Raymark develops and markets the ultimate suite of flexible and interconnected applications deployed in a centralized environment and offers professional turnkey solutions including implementation, training and customer support. www.raymark.com