Retail Review – Omni Channel May Be Science Fiction, But A Single Source Of Truth Matters

omni-channel-dudeIn How NRF 2017 changed my thinking on retail trends. I laid out the retail trends that impressed me (augmented reality, in-store innovation, analytics), while throwing “omni-channel” under the bus as science fiction.

Since then, my colleague Stuart Lauchlan has added a range of retail stories that explore the omni-channel problem in the context of store closings. Re-inventing stores without falling prey to cost overruns and shopping mall irrelevance is the central problem of retailers not named Amazon.

While I remain an omni-channel skeptic, other interviews from NRF did jolt my thinking. For retailers brave enough to resolve data issues and change the in-store experience, there are field lessons to learn from. Predictive and AI technologies, while not yet mature, can also provide an edge.

Omni-channel research from CitiXsys – progress and problems

da-silva-nrf
Paula Da Silva at NRF

Paula Da Silva of CitiXsys gave me her views on their recent study of 1,000 omni-channel shoppers. CitiXsys has a big stake in omni-channel; they have 1,000 customers on their iVend omni-channel solution, with a midmarket focus. This year’s report, Great Omni-channel Expectations, brought some good news: retailers are actually getting better at loyalty programs.

That was all over the report,” Da Silva told me. So what’s changed? Nutshell: Loyalty systems are getting better at recognizing customer sales from different channels and allowing the customer to redeem those points online – or in the store. Retailers are getting better at avoiding the “I don’t have my rewards card on me” delay/headache. No, that’s not omni-channel dreamy, but hey, it’s a step. However on the sour front Da Silva says the report found that:

The in-store experience is letting the shopper down.

Why? There’s a gap in the “click and collect” process. Stores don’t offer enough at-home delivery. Pickup has logistical flaws. Stores don’t recognize shoppers based on their online/past behavior. “Shoppers don’t want to be treated like a stranger in the store,” says Da Silva. Sales associates are rarely able to answer product questions adequately:

The sales associate usually says, “I don’t know, let me find someone who can help.” Then they disappear.

How do we improve the online versus in-store disconnect?

So how can stores get past this? And don’t tell Da Silva it’s about closing stores. She believes most customers want to kick tires on products and have the in-store experience. Da Silva recommends:

  • Educate staff about products – beyond what a shopper can access online and learn themselves.
  • Equip staff with technology that allows them access to customers info. “If they can get customer info on their mobile device, they won’t have to pull the disappearing act. They can look the customer up on the spot,” says Da Silva.

I agree with those points and wrote about them in my first NRF roundup. But as I also said to Cisco, I see a problem outside of high end retailers with upskilling and retaining “store associates,” who are too often paid a pittance with no attractive career paths. Putting iPads in their hands is the (comparatively) easy part.

But that’s not all. Da Silva also points to a “single source of truth” as a big key to improving retail. Now, CitiXsys has a vested interest in that position, given they offer an integrated suite of omni-channel software (iVend Retail Management). Still, it’s hard to argue with this:

You can’t do omni-channel unless there is a single source of data, with a single repository, that you can feed into all the channels.

Da Silva admits that

Retailers don’t want to hear the word omni-channel anymore; they are sick to death of it.

What does matter are the pain points. For many retailers, Da Silva says that starts with their point of sale solution (POS). Sometimes the POS is not integrated with the e-commerce system, other times the POS is a homegrown in-house system creaking under growth pressure. The prospect might not mention “omni-channel” but the pain of disparate systems is real.

Infor’s retail view – why is omni-channel falling short?

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David Dorf at Infor booth, NRF 2017

iVend is hardly the only retail vendor advocating a “single source of truth” approach. That was also the message from Infor’s David Dorf, VP of Product Strategy. He sat down with me to sort through Infor’s aggressive retail moves. Infor’s retail push underscores these points:

  • Retailers need sophisticated vertical solutions, not just lightly-tweaked ERP systems.
  • Omni-channel or not, retailers need a single source of truth for process efficiency and customer experience.
  • Closing stores doesn’t solve the problem. Some malls may be struggling. but stores are an asset –

    if they are able to deliver online-to-store experiences.

  • User-friendly, cloud-based software is a key to maintaining a single source of truth – and widespread adoption.

Infor has pursued this through a flurry of acquisitions, all tied in to their Infor CloudSuite Retail solution. Customer co-innovations play a big part as well, with Crate and Barrel the latest to join Whole Foods and DSW, a footwear retailer. So with all the omni-channel buzz, why is omni-channel falling short? Dorf also points to disconnected data and brittle integrations:

People talk about omni-channel quite a bit, and a lot of retailers have implemented what they call “omni-channel.” The problem is that it’s lots of different old systems taped together to make that work, and it’s very brittle and expensive to maintain.

Infor takes a different approach, which they’ve dubbed as “converged commerce.”

What we’re trying to do is provide a single selling system. That’s what we mean when we say “converged commerce.” It’s one system that services all your channels. With the Starmount acquisition, we got to the core of that.

Announced in July, the Starmount acquisition provides Infor’s retail cloud key functionality in point-of-sale, mobile shopping, inventory management and commerce:

That one system that houses all of your customer information, your item information, your pricing, your inventory levels.

Infor sees cloud scale as crucial to next-gen retail. Utilizing open source databases where needed, their goal is a “comprehensive solution” that should give retailers much better data visibility. So does the customer record have to sit in Infor’s cloud? Not necessarily:

[The customer record] can sit in multiple places, but we have something called the omni-channel hub, which sits in the cloud. That hub services all the channels.

It’s about providing a “360-degree view” of the customer:

The basic information of the customer is there. Additional information can be integrated, so when the POS asks, “Hey, I need all the customer information plus their point value,” I can get the basic customer information from the omni channel hub, and then refer out to get the points from the loyalty system and bring it all back at once. I think that’s important to have that 360 view that’s constantly updated and kept in real time, for an accurate perspective on the customer. The same thing with inventory. The same thing with products and prices.

Infor’s teams have busy days ahead. They are also working to “tightly” integrate Predictix, another prior acquisition, and their merchandising system, which will be tied into the inventory management solution. The goal? Bring analytics and transactional views together, utilizing the Predictix NoSQL data store:

By having your analytics and your transactional system on top of the same data store, you can really mix things. In a typical merchandising system, you have to offload all that data into a data mart to do your analysis on top of it. Now you can do it right in place.

Add in the ability to pull in suppliers via Infor’s GT Nexus network:

Obviously we’re building merchandising not only on the Predictix technology, but also on the network, to take advantage of GT Nexus to be able to collaborate with suppliers in a meaningful way that helps accelerate your ability to get new product to market.

Then there’s that problem of in-store talent. You have little chance of recruiting/retaining in-store talent if you’re using old, cumbersome systems. Infor puts all its solutions through its Hook & Loop redesign:

It’s been huge for us. We have a customer, David’s Bridal, that’s doing the in-store system. We just had them speak at a breakfast Sunday morning. Somebody asked, “What’s the training like?” And he said, “It used to take us two and a half shifts to train someone on our old point of sale.” With the new stuff, it takes them about 30 minutes.

It’s not just about getting employees into productivity quickly. It’s about recruiting the best people you can. As I said to Dorf, “People don’t want to put down their smartphones for work, and work on an antiquated. crap system. They want to work on an intuitive system that makes sense to them.”

My take

Making loyalty programs work better is really an omni-channel baby step. But, it’s a step. As Infor and CitiXsys show, there are moves companies can take to improve in-store experience without radically changing culture or systems. Attacking a pain point like a legacy point-of-sale system can also reap dividends.

I’m partial to the dual vision of empowered store employees and a better customer experience – supported by a unified data platform. Doesn’t matter whether we call it “omni-channel” or just better shopping. However, I remain concerned about the in-store culture/talent changes required to realize this vision.

On the data platform side, I fear most companies will find this a slow, difficult process – though the approaches Infor and CitiXsys advocate can be incredibly helpful, especially for retail upstarts. New brands can learn from these legacy mistakes – and get this right before they build a mountain of disconnected apps. There’s more to say on the predictive and AI aspects of retail – watch this space.

 

Image credit - Feature image - Online shopping concept appearing above a tablet © thodonal - Fotolia.com. NRF photos by Jon Reed.

Disclosure - Infor is a diginomica premier partner. NRF provided me with press access to NRF 2017.

Source : http://diginomica.com/2017/03/10/retail-review-omni-channel-may-be-science-fiction-but-a-single-source-of-truth-matters/

Retail review – omni-channel may be science fiction, but a single source of truth matters
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