Technology implementation critical for omni-channel retailers
12 Feb 2018 Technology implementation critical for omni-channel retailers
(This article was originally published in ET Retail – link)
The last few years has witnessed a huge shift in the retail industry as technology has started to play a critical role in consumer behaviour. The modern customers, now expects a quick, convenient and seamless experience regardless of how and where they purchase the product from. Enterprise retailers have also understood the importance of integrating their online and offline sales channels and providing a seamless omni-channel experience to the customer.
The changes and opportunity that have arisen from this tectonic transformation in consumer behaviour has posed an important question to retailers – how to balance the cost of technology adoption while trying to best serve the increasing demand of today’s customers for a truly omni-channel experience.
Sales channels of the brands such as the web stores, physical stores and marketplace retail works in silos with separate systems taking care of specific functioning of these channels. Hence, implementation of a true omni-channel technology not only demands a transformation in terms of operational strategies, but also a huge change in the mindset of retailers. With so much in stake, businesses cannot expect to implement omni-channel strategies immediately as a quick fix. Retailers must take full responsibility for the technological commitment necessary if they wish to fully reap the reward from their investment.
Retailers are encountered with multiple challenges in order to successfully implement an omni-channel strategy. Brands, more often, have a non-agile and silo-ed IT infrastructure with low level of integration between disparate system. When collaboration is limited, delays frequently set in, and render imbalance in the performance of one or the other sales channel. Moreover, one of the critical component for a truly omni-channel experience is how the ecosystem works in sync and contribute and collaborate to increase efficiency of each function. Hence sales channels, payment systems, fulfilment and delivery partners and customer support teams need to work as a comprehensive force to optimize online and offline integration. Building a strong ecosystem also requires competencies across a slew of non-traditional functional areas which includes site design, user-experience management, customer journey mapping and advanced logistic support. Additionally, for a brand it is difficult to manage multiple partners in the value chain, piece meal outsourcing agreements and complex vendor management framework and cost.
The initial start-up costs associated with implementing omnichannel technologies into a business can often prove to be a barrier to brands. While the technology required to maximize use of omni-channel strategies can be costly, to proceed without it can prove to be disastrous in the long run. Unfortunately, over dependence on legacy systems has been quite a bane for enterprise retailers. The high upfront costs and the long gestation time of implementation are not the only deterrent for brands. There is a clear advantage for retailers who integrate various sales channels into one single, consolidated platform. It gives them the opportunity to significantly enhance operations through capturing and analysing data and learning deep insights about customers. However, the legacy framework has no capability for providing a unified view of the sales channels. Moreover, distributed order management plays a critical role in improving the integration process for online and offline channels. Existing systems have minimal visibility on orders generated on online marketplaces, brand websites, etc. There is also a compelling need to transform the supply chain of the retailer into an information-driven value chain enabling multi-stock point fulfilment. Existing brand system are ill suited for out of the box for deployment in a retail store. Also, integrating and building custom workflows into existing legacy POS platform is time consuming, in-efficient and costly.
To bridge the gap between omni-channel adoption and execution and integrate multiple cross channel sales system, an agile technology platform that frees brands to focus more on customer engagement and provide seamless shopping experience is required. The agile platform needs to have the capability to provide real-time consolidated view of inventory from disparate system into a single, enterprise view across selling channels. The platform also needs to have a distributed order orchestration engine enabling order capture from disparate sources, configurable order processing workflows and intelligent order routine algorithm. Providing brands real-time access to information available across disparate systems, and ability to make complex real-time decisions based on the information available across enterprises is also critical in evaluating the value of the platform.
The power of omni-channel is undeniable. There is no doubt that brands which are committed to implementing necessary technology as a part of their omni-channel strategy will reap the reward. But brands need to also realize that they need to choose the right partner and technology provider who has a more comprehensive approach in terms of tech implementation, rather than having a silo-ed approach that only solves one part of the problem.
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