A blog for all things retail and licensing.

Top Four Challenges of Omni-Channel Retailing

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

In-Store Analytics: What’s Top of Mind for Today’s Retailers?

Guest blog by Steve Jeffery

Despite the gains that ecommerce has made in recent years, the brick-and-mortar store still rules as the retail industry’s largest sales channel by a large margin: up to 85 percent of transactions take place in stores. Yet frustratingly, retailers have a pretty big blind spot when it comes to understanding and analyzing what happens in the store. Clickstream analytics are a given in e-commerce, but capturing accurate data in the real world is more complex and demands different approaches and solutions.

Today’s multichannel retailers must address the “insight gap” that exists between their online and brick-and-mortar channels. In-store analytics are needed to do this, but how mature is this emerging technology market? What are the top drivers, and top concerns, for retailers evaluating technologies and planning deployments? These are some of the questions that Brickstream set out to answer in a recent survey of 124 executives from global retail corporations. The study, Retail Analytics: What’s In-Store? has uncovered a number of interesting findings, including the following:

  • People counting is step one. While retailers are interested in collecting a broad range of data in stores, they placed a premium on customer traffic data (otherwise known as people counting), citing metrics on how many customers enter a store and how many of those buy (sales conversions) as their #1 and #2 most important measurements. They also value knowing which promotions attract customers, where customers go in the store and which products they choose. 71 percent of the retailers surveyed said that they use or plan to use people counting technology in their stores, with in-store Wi-Fi and loyalty systems coming in at 68 percent, and mobile payment/wireless POS and queue management technologies of interest to at least 52 percent of respondents.
  • Cross-functional value cited. Survey respondents consistently identified marketing, operations, merchandising and loss prevention as areas that will benefit from increased visibility into what’s happening in the store. Marketing was seen as the department most likely to instigate and lead in-store analytics initiatives, however, with other departments expected to follow suit as the value of technologies deployed are proven.
  • The future will be multi-channel. As more and more consumers shop and interact with retail brands across store, e-commerce and mobile and social channels, retailers are increasingly interested in getting a multi-channel perspective of customer behavior and sales. Survey respondents reported a timeline of within a year to four years for becoming fully multi-channel, with supermarkets and department stores ranking as early adopters and more invested in multi-channel activities than other retailers. Stores and e-commerce are viewed as the most dominant sales channels, with more than 80 percent of respondents naming these important, with mobile and social channels also ranked highly, at 73 percent and 66 percent, respectively. Thus, accurate data is needed for all channels, not just digital ones.
  • Proceeding, with caution. Survey respondents confirmed there is value in investing in in-store analytics, and singled out greater insight into retail performance, as well as knowledge that enables improvements in staffing and the overall customer experience as key motivations for adoption. Over 80 percent of retailers surveyed reported that they have deployed or plan to deploy in-store analytics by the end of 2015. At the same time, respondents also expressed concerns about whether returns would justify the price and about potential disruptions involved in deployment and training employees on new systems. These reservations suggest a cautious user base looking for guidance on the most streamlined and cost-effective ways to move forward.

Retail executives in operations, marketing, merchandising and loss prevention from the U.S., South America, Europe and Asia were interviewed for the Brickstream in-store analytics survey, with eight major categories represented, including supermarkets, department stores, specialty electronics, warehouse, drug stores/pharmacies, cell phone stores and big box retailers. More than half the respondents (54 percent) were from large retailers with revenues of $1B and more; the balance came from midmarket retailers ($100 million to $1 billion in revenues).

As in-store analytics technologies mature and shoppers go fully multi-channel, the time is ripe for retailers to start to think about best practices and approaches so that they are no longer flying blind when it comes to their biggest channel—the store.

Steve Jeffery is CEO of Brickstream