Omnichannel Readiness

RIS News Custom Research OMNICHANNEL READINESS Lagging retailers lose millions of dollars in revenue due to slow omnichannel progress produced by ® sponsored by Custom Research by joe skorupa OMNICHANNEL READINESS Lagging retailers lose millions of dollars in revenue due to slow omnichannel progress Retailers no longer need evidence that omnichannel capabili- tion is a daunting task that will take many years. ties are decisive factors for success in retailing today. Nor do A legitimate question a retailer could ask as it embarks on its they need to be convinced that omnichannel functions will play omnichannel journey is: How can I benchmark my progress as an even larger role in the future. However, this does not mean I move from phase to phase and also how do I stack up against to imply that retailers are omnichannel ready. In fact, hard data my competitors? Answering these questions is one of the moti- from industry studies finds that most, if not all retailers, have a vating forces behind this month’s RIS Custom Research Report. long way to go to become true omnichannel champions. For this report, we define omnichannel retailing as the abili- But it is fair to note that the term ‘omnichannel’ is not a ty to deliver a seamless shopping experience to customers across tidy, well-defined concept. It is a broad term that has different all channels by synchronizing technologies, services and pro- meanings to different retailers. It is also worth noting that the cesses in a centralized, interoperable way. concept of omnichannel retailing, however you define it, en- Many more layers of depth could be added to this definition, compasses nearly every technology, system and process in the especially in the areas of customer-centricity and shopper en- retail enterprise. It’s not called “omni” for nothing. So it’s not gagement, but for this report we are focusing primarily on the surprising to find that completing an omnichannel transforma- technology layer. Merging the Digital and Physical Shopping Experiences Linda Palanza, Chief Operating Officer, OneView Commerce As well-informed and technically savvy shoppers have become These new, robust POS solutions, supporting both mobile and the norm, the relationship between the store and the online fixed POS, are built on a single platform of shared services from channels has dramatically evolved. This customer demands a where all digital and physical commerce transactions are driven. high level of synchronization across channels forcing many This eliminates traditional channel barriers and allows retailers retailers to rapidly cobble together technologies and processes to deploy one commerce platform to all touchpoints, including just to keep pace with where the customer is today let alone to the store where over 90% of all commerce still takes place. The where technology is going. The digital marketplace continues use of shared services facilitates the single view of customers, to significantly influence buying behaviors at the store. From orders, inventory and products that is vital to navigate the a store landscape perspective, access to customer, product omnichannel crossroads and achieve omnicommerce nirvana. and sales information as well as understanding the customer’s journey prior to entering the store is becoming a key litmus OneView Commerce test for success among retailers as the digital and physical www.oneviewcommerce.com touchpoints merge into one customer experience. +1.617.292.0400 Customers are utilizing a multitude of touchpoints prior to making a purchasing decision. Now-generation point-of-sale solutions access all of the same touchpoints in order to build rapport with the customer and influence the buying decision. RIS NEWS.COM OCTOBER 2013 2 Custom Research sponsored by FIGURE 1 What is your technology readiness to seamlessly meet the wants and needs of omnichannel shoppers? Revenue on the Table A few retailers have taken a strong lead- 19.2% Nearly up-to-date ership position in the race to become and starting to omnichannel ready. (See our list of om- think ahead 50% nichannel leaders later in the report.) To Behind the truly answer this question with a high curve but making slow degree of accuracy you would need to be progress 30.8% able to look beneath the hood, kick the Behind the curve but making fast progress tires and survey shoppers. Retailers do this every day and so when we asked them to tell us if they were truly omnichannel ready to satisfy the wants and needs of FIGURE 2 customers seamlessly across channels, guess what? No one checked the box. That’s right. No one said they have caught Revenue lost today because processes, up with the omnichannel curve and are % technologies and corporate structures looking ahead to get in front of it. Rarely are not fully synchronized according does a non-answer tell so much of a story, 6.5 to a clear omnichannel strategy but in this case it does. So, if no one is ahead of the curve, where are most retailers today? What FIGURE 3 we found is that 19.2% are nearly up- to-date and starting to get ahead of the Which omnichannel building blocks are shared seamlessly curve. A bigger group of retailers said it in your IT ecosystem? was behind the curve but making fast 23.1% progress to catch up (30.8%). And the Inventory management 50% largest group (50%) said it was behind the curve and only making slow progress 23.1% to get ahead. (See Figure 1.) Merchandising 45.5% As retailers review this data and think about which group they fit into 14.5% they should be aware of why it is impor- Fulfillment 45.5% tant to keep up with the shift that is going on and exactly what is at stake. 38.5% When asked to put a dollar figure on Pricing the revenue lost due to being behind 45.5% the omnichannel curve – meaning that 26.9% technologies, processes and corporate Order management structures are not fully synchronized 31.8% behind a clear omnichannel mission – retailers estimated that 6.5% of revenue 38.5% Analytics/BI was lost, which is one of the major find- 27.3% ings in the study. (See Figure 2.) What this means is that if you are a Transaction platform 65.4% billion-dollar retailer, an estimated $65 27.3% million dollars is left on the table due 34.5% to an inability to effectively compete Marketing/Campaign management in an omnichannel world. For retailers 22.7% looking to bolster their case for getting budget approval for adding omnichan- 38.5% CRM/Loyalty nel functionalities, this finding should 22.7% add fuel to the fire. Will Share in 12 Months Share Now RIS NEWS.COM OCTOBER 2013 3 Custom Research sponsored by FIGURE 4 What will be your primary transaction platform across all channels in 3 years? Essential Building Blocks To create an omnichannel enterprise, 3.8% retailers need to add building blocks in Other an orchestrated multi-year plan. The plans will be different for every retailer 19.2% depending on IT ecosystem, competitive POS software forces, budget and retail niche. 53.8% Hybrid of multiple, Study data shows that initial efforts channel-specific 23.1% have gone into updating and seamlessly platforms E-commerce platform integrating two giant pillars of retailing – the supply chain and merchandising. (See Figure 3.) The two supply chain functions are inventory management, which was cho- FIGURE 5 sen by 50% of retailers, and fulfillment, which was chosen by 45.5%. The two Which omnichannel touchpoints are up-to-date other core omnichannel building blocks and fully integrated across channels? at the top of the list are merchandising 50% (45.5%) and pricing (38.5%). E-commerce All four of these core functions ap- Call center 43.8% pear in the top quadrant of omnichan- Social media/networks nel building blocks that are shared 37.5% seamlessly across channels today. Point of sale 37.5% Although these two pillars of retailing Mobile commerce 25% are large and important, there is much Kiosks more in the IT ecosystem that needs up- 12.5% grading to become omnichannel ready. To find out which core elements will be the next areas of focus we asked retail- FIGURE 6 ers to tell us their omnichannel deployment plans for the next 12 months. Which advanced omnichannel capabilities do you have now and The answer turns out to be a sin- which ones will you add in the next 12 months? gle technology, which is a rarity in the Price matching 40% 4% 12% world of retail technology research, especially when the question allows the Digital receipts 34.6% 15.4% 26.9% respondent to answer all that apply. In QR barcodes this case, the top choice for future om- 28% 12% 20% nichannel deployment plans is to move Product/purchase sharing 25% 20.8% 41.7% to a transaction platform that unifies Wish list sharing POS, e-commerce and m-commerce. 24% 16% 28% This was chosen by 65.4%, a substantial Geo-location in or near stores 19.2% 23.1% 30.8% majority. The second highest rated set of building blocks (after pricing, which Digital shopping list 16.7% 12.5% 41.7% also appears on the share in 12 months Digital coupon reading 16%12% 24% list) are CRM/loyalty and analytics/BI, which were selected by 38.5%. Shared shopping cart/basket 12% 20% 40% Retailers who want to benchmark Shopper check-in 8.3% 16.7% 50% their omnichannel progress against an industry standard can find no clearer Participation marketing (gamification) 8.7% 34.8% signpost for where the bulk of the in- 4.3% Evaluating dustry is headed in 12 months – shifting Have Now Plan to add in 12 months to an omnichannel transaction platform that by definition will reinvent the tradi- RIS NEWS.COM OCTOBER 2013 4 Custom Research sponsored by FIGURE 7 tional POS by expanding its store-cen- Best-in-class retailers in omnichannel strategy and execution tric focus to include all channels.

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