MultiChannel Technology Strategy

As multichannel strategies become increasingly central to many retail organisations they are looking to their eCommerce platforms to enable convergence of web, social and mobile into one seamless marketplace.

A single set of business tools that can extend and pre-integrate data from disparate platforms to manage an enterprise wide view of activity is becoming invaluable as part of a solution to the single biggest challenge to multichannel eCommerce: a unified, usable, view of customer data

This means that the strategic implications of choosing the right system are suddenly wider and deeper than they have ever been before. Ecommerce is no longer just a web solution it is becoming the foundation of the whole CRM system, responsible for the entire retail bottom line and as such the ROI considerations are much greater than just the sales paying for the technical installation.

At a minimum such a system now needs to include:

  • A flexible front end that seamlessly handles multiple devices (eg pc, mobile, kiosk, POS)
  • A powerful CMS that can handle rich media experience, social media integration, UGC, community spaces etc running on technology powerful enough to cope with and balance peaks of demand.
  • Sophisticated promotions engine
  • Customer self service tools such as wishlists, scheduling. Order history
  • Web services/applications to handle sophisticated workflow

A shift is happening in merchandising software whereby it is becoming increasingly easy for online retailers who want to adapt the latest customer centric merchandising technology for use on their sites.  Instead of being tied to one system organisations are pushing the vendor market so that they can pick and mix products that are compatible across all platforms.  Now this has begun it will snowball as any vendor with products that are not compatible with others will suffer.

Of course this makes the need for technology agnostic, third party monitoring all the more essential. A common language of user experience that can be used to assess the performance and delivery of all components that make up the multi channel offering whether front or back end, client or server side. Without this the necessary cross departmental and inter organizational collaboration that is necessary for projects of this size to succeed will be much more difficult.

What Makes An Effective Platform

For effective digital merchandising the eCommerce platform must be deeply integrated and fully linked with other business feeds. That makes dynamic search and recommendation a vital part of the customer experience. Even a static catalogue showing a range of products in different sizes and colours must be linked into the realtime stock feed so that recommendations do not pop up for items that are out of stock. If a customer sees a product they want and clicks through only to be frustrated because there are none in stock to order the brand damage could be significant.

The platform also needs to be integrated with the visitor feed, following the stream of all visitors coming in and out of the site so that it responds to their entrances, exits and browsing paths. There also needs to be integration with the events feed which means the site can capture data and respond correctly to events such as a purchase being made, returns, queries etc.

In the early days eCommerce providers built bespoke solutions. They were covering uncharted territory and nothing existed to meet their needs, in fact they did not even know what their needs, and those of their customers, were. As time passed and understanding of what made good eCommerce Experience was understood and systems evolved to meet demands things changed. For retailers coming into the market today while technology is still important there are lots of options to choose from an integration and implementation are key issues.  Innovation is happening so fast that retailers are struggling to keep up and in many companies by the time a decision is made to go in a certain direction a new thing has already come along to supersede it.

Realising that this can be daunting for retailers technology providers are moving to consolidate offerings eg IBM has bought Core Metrics and Sterling Commerce, eBay bought Magento the open source platform and eCommerce services company GSI Commerce, and Hybris merged with iCongo with the promise of becoming a “one stop shop that gives customers the choice of how to buy”. It seems that as e-commerce becomes more complex and involves more components retailers would prefer to work with a supplier that can provide all functionality (and contracts, SLAs etc) in one place.

Logistics and Legacy Systems

Many retailers are struggling with the fact that all of the elements needed for multichannel run on disparate systems that need to communicate to provide all of the information necessary to provide a fully cross channel experience.  This can be a real struggle. In many cases the different areas will also be managed by different teams who belong to different departments or cost centres.

It’s not just the customer facing aspects that need connecting up. To provide the consistent levels of service necessary once a customer has made a purchase then all the technology connected with getting goods to where they need to be, all the logistics, need to work together. This means that in many ways the order management function is the key. Another factor is that retailers typically change, replace or upgrade the user facing technology far more often than backend logistic technology. You don’t want to have to rework all the integration points in your logistics system every time you upgrade, so its the order management system that separates all that back end integration and allows retailers to quickly refresh customer facing technology.

The reality is that many retailers are not ready for even the most basic integration. Prices are often different online and in stores and customers will want to know why they cannot get the same deals by whatever means they choose to shop with a brand. If you scan a bar code in a shop will you get the same info as if you typed it in the online product search? Even for something as simple as this to work you need to ensure your systems are all updating on the same realtime cycle and all info is correct.

Legacy systems are a fact of life and it will not be possible to update them all at once in most cases. There may be certain existing update or contractual cycles that cannot be circumvented, there may be other priorities for the teams that would do the work, or the time and money and other resources involved.

Integration with delivery services is something that has been worked on for some time to greater and lesser degrees of success – but deep integration with partners’ inventory and merchandising systems can be very difficult to achieve in realtime. Users often do not pay close attention to whether a product is being sold by the merchant or a partner – and bad user experience can easily result where systems are not properly integrated and customers find out about stock levels too late, or worse, after the fact when they receive an email saying the item is actually out of stock and it will be weeks until the order is fulfilled.

Many carriers are now working to improve their own systems to enable easier integration with with client’s eCommerce platforms so that they can improve the amount of realtime information they are able to provide to shoppers.

Delivery options can be specifically complex when dealing with international orders and older retail systems often have no way to cope with this aspect of eCommerce – for example address fields may not be adequate (eg not enough characters, not right format for all address lines), compliance with local laws about invoicing/information may not be possible, payment methods or delivery options expected in those countries may not be available, multi currency transactions or conversion may be an issue.  Hybris recently launched Multi-channel Accelerator which is an integrated suite that taps into order management and merchandising systems and can handle international transactions. The system taps into other retail applications such as store stock and ERP, as well as shipment needs, and aggregates the information to provide a single stock picture. The system can integrate with EpoS systems for store pick up – but it cannot do financials and it doesn’t have a complete merchandising suite or carrier management function but is looking to expand its capabilities in these areas.

Increasingly complex transactions are already in action, for example at Best Buy in the United States where a customer can go into a store can make a normal POS transaction coupled with a save the sale transaction coupled with a gifting transaction, buying for someone who lives far away and it’s all done as one single POS event using a combination of POS, eCommerce and order management technology without having to make 3 different brand interactions over different platforms/locations. Eventually when this becomes the expectation rather than as USP retailers who do not provide this level of joined up experience will be shunned by customers. They will not fight to give you money when it’s much easier to do elsewhere. The first internet revolution proved that!

Delivering The Goods

Many eCommerce sites have even moved away from the recent model of one warehouse for goods and internal dispatch or one courier relationship. Increasingly you can order goods from a number of suppliers who ship the goods directly (the order passed on to them by the eCommerce site) and not hold any stock of anything but the most popular items.

While timed delivery slots are still unusual (apart from large items) given real world issues of traffic and and driving routes etc Yodel is looking to enable retailers selling big ticket items to embed available delivery slots in retailer websites so that shoppers can book a delivery when they place an order.

Some sellers, such as Amazon, use many different carriers for deliveries depending on area, product type and delivery options chosen by the user. A way of making this happen seamlessly, and having all the same data available to users, no matter what the carrier is imperative if experience is not be adversely affected. Amazon has seen varied performance levels amongst its carriers  – resulting in very public dissatisfaction on its message boards on the main retail site. As users get to make brand associations with certain carriers they will increasingly want the option to choose between them. Businesses seen to use unreliable carriers, or who do not allow this option, will suffer as users chose to go somewhere that can better meet their needs.

Metapack provides a service called HDi used to manage multiple carriers for home deliveries. Axida systems link website orders to individual transport fleets to deliver big ticket times for companies such as Tesco and to take order info and match it to carrier schedules and capabilities for companies such as Ikea and Wincanton and sometimes powering the delivery options seen by shoppers when they place their orders. Axida launched Pick, Pack and Despatch (PPD) as “software as a service” (Saas) this summer which is targeted at mid tier operations and fulfilment houses.

While Metapack and Axida “bridge the gap” between retail and carrier systems IBM’s order tool as part of its Smarter Commerce initiative claims to solve the “available to promise” issues for retailers such as Argos and Crocs. The order management suite which came with IBM’d Sterling Commerce acquisition last year was developed by Yantra more than a decade ago as one of the first cross channel applications and now has been fully integrated with the rest of the Smarter Commerce offering. It, too, acts as a “bridge” between store. Warehouse, suppliers, carriers and digital channel platforms to track stock levels and give a “single truth” about customer activity and inventory. The product is targeted at larger retailers but as SaaS version is in the pipeline to make it a practical option for mid tier companies. Supply chain specialist, Manhattan Associates also provides order management as part of it’s suite of tools. Such bridges, though, depend on the core retail and merchandising systems being reliable – but many retailers are dependent on ageing legacy systems with limited capabilities

CRM

Building relationships takes a lot of work. It is not enough to just have the data – and useful data can be hard to get. The key word is here is useful. Most customers leave a wide information trail behind them as they interact with you  – but proactively collating this raw data and turning it into “information” that can be used is a much trickier prospect. Also, you must do this without “spooking” the users – so that it seems helpful and supportive and not creepy and intrusive.

Of course not everyone wants to volunteer information about themselves and link up their profiles across multiple sites, brands or communities. Also, where computers and accounts are used by more than one person, are used to purchase gifts for others, or where one person uses multiple machines or accounts there can be difficulty in tracking information. Retailers increasingly look to encourage users to do this by offering certain promotions, exclusives and discounts in exchange for information. In the early days there was a caveat with this that users may enter incorrect or deliberately misleading data but as trust, sophistication and the offers being useless without correct data have all developed this issue has decreased.

Some aspects of social media can work almost like instant CRM for on the ball organisations. Facebook data in particular, even without searching the content of posts put the user in a context of demographics, peer relationships, networked behaviour, community status etc. The next step is for retailers to use this info intelligently – and sensitively.

True multichannel user understanding also involves taking a step back from the current drive with a lot of eCommerce Analytics which try to discover how to get users to make a purchase online. Some customer types will not want to buy online for a variety of reasons, and in this case the role of the website should be to support that decision and help the purchase process through other channels. Pushing everything to online at the expense of other channels may lose you a sale. However it is important to monitor and measure the performance and effectiveness of the online channels within this context. More subtlety is  required

There are 4 key checklist data points that must be covered by any successful CRM system are

  • product data,
  • customer data,
  • order data and
  • stock data.

Whatever disparate systems an organisation uses these points must be correct and consistent across all of them. Everyone recognises that they need to embrace multichannel – and in looking where to start these are the fundamentals without which nothing else can work.

The SciVisum ethos of providing a “single point of truth” allows the information from monitoring everything from server cycles to real in-browser experience to be used and understood at all levels of the organisation. This data is immediately actionable for support and operations teams, and also enables wider data driven decisions for purchasing and resource allocation. With numbers clearly showing impact on User Journey performance the financial justification for decisions and requests can be easily demonstrated – a matter of increasing importance as organisations depend on technological performance in all areas of the business.

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