Guest Blog by Rob Kirkey
From the evolution of e-commerce to social media and mobility, the retail environment has seen a multitude of changes over the last decade. There are now many more variables to consider beyond bricks and mortar. This has led retailers to adopt a new ‘omni-channel’ philosophy that gives customers the ability to interact and transact with a store via any channel – in person, over the phone, or online. Omni-channel retail has enabled many large businesses to capitalize on new opportunities, but for mid-market and other businesses, these new variables introduce a level of complexity that creates many challenges. Below are four common difficulties that retailers face as they adapt to omni channel retail.
1. Aligning inventory with omni-channel demands
While omni-channel shopping presents retailers with new avenues of income, it also highlights shortcomings of legacy systems in use, particularly in terms of allocations, consolidated reporting, inventory, marketing, merchandising, post-sales services and promotions which in turn complicates the retail value chain. The challenge for retailers is tying these numerous channels together, especially with so many components to consider.
2. Remaining competitive in an ever-changing market
The complexity of omni-channel retail – coupled with the pressures of competing with larger and often international companies that have greater purchasing power – has led many mid-market retailers to find ways of reducing traditional supply chain layers. For example, some have chosen to deal directly with manufacturers, have started importing, or have changed their product range to cater to less competitive niches.
3. Providing added value
In the era of bricks-and-mortar retail, most businesses had a speculative understanding of customer interests and behaviors. E-commerce now offers retailers a wealth of customer information, allowing them to monitor and tailor brand messages to specific demographics or even individual customers. The challenge for retailers is to translate this information into marketing and merchandising that is meaningful to their target customers.
4. Gaining a clearer customer view across multiple channels
Every day trading produces a wealth of clearly defined transactional data, but also a lot of unstructured data which is not as easily captured. This information is often referred to as “big data” – large, unstructured, and constantly changing sets of data that organizations can use to yield accurate insights. The challenge for retailers here is to capture data across multiple channels so it can be analyzed and translated into useful information.
How BI and ERP software can help your omni-channel retail strategy
Business intelligence (BI) software gives organizations the ability to gather, access, and analyze “big” data. It features analytic and design tools that allow users to intuitively explore, investigate and unearth trends and patterns in consumer behavior and then creates practical reports with ease.
ERP software creates an IT-based foundation to help retailers streamline operations and secure greater profit margins. ERP lets businesses control, manage and simplify a wide range of retail operations such as sales and marketing management, customer relationship management, distribution, supply chain management, manufacturing, facilities management and financial processes – such as accounts receivable, payable and payroll.
While ERP and BI are traditionally packaged as separate products, there are options – such as Pronto Xi – for ERP systems with built-in BI capabilities. These solutions can minimize the cost and effort associated with implementation, combining enterprise resource management and data analysis in a single, intuitive dashboard.
Integrated ERP and BI solutions present mid-sized retailers with the most efficient and cost-effective option for turning these challenges into opportunities. With the ability to process and analyze big data to extract customer insights and the tools to tailor internal processes accordingly, today’s retailers are well equipped to realize the potential inherent in omni-channel retail. The question for many retailers now is not when they will adapt to support omni-channel retail, but rather how they will approach the challenge.
Rob Kirkey is Vice President of Pronto Software