From The Editor | August 23, 2012

Omni-Channel Retailing And The Customer Experience

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By Bob Johns, associate editor

Part 1 of 3

I have had the occasion to speak with many retailers about their renewed focus on serving the customer and creating a retail “experience” that keeps them coming back, no matter what channel the customer chooses to use. This is mainly accomplished through an omni-channel approach. But, what is omni-channel retailing, and how is it different from multi-channel, cross-channel, or e/m-commerce?

Omni-channel retailing begins with a holistic, rather than siloed, view of the company. Becoming truly omni-channel involves everything from supply chain and fulfillment to merchandising and workforce management. All aspects of the business must coalesce to form one complete company. As e-commerce was introduced to traditional brick-and-mortar retailers, they chose to operate this channel essentially as a separate company. Retailers have different fulfillment centers, pricing, merchandise availability, and personnel in each of their channels. Not only has this approach proven to be less efficient and more costly, but it also creates confusion and sometimes anger within the customer base. Why should someone in the store be able to jump online and buy something from the same retailer’s website and have it delivered to their home for less than being able to pick up the product from the shelf right in front of them? This is just one small example, and retail associates are faced with questions like this every day.

Take another situation in an omni-channel environment. A customer is in the store looking for a product that the retailer is currently out of. An associate can assist the customer, with a mobile device, by locating the product somewhere in the retailer’s system. The associate should have visibility into individual store inventories to initiate a store-to-store transfer, view warehouse quantities to have the product sent direct-to-store or direct-to-customer, or even assist the customer to place the order through the online channel right there on the sales floor. Pricing, however, must be consistent no matter how the order is being placed. Enabling the associate to engage the customer and offer real value to address the customer’s concerns is a large part of becoming omni-channel.

Supply chain and fulfillment are a big part of any company’s initiative to become omni-channel. With today’s order management solutions and picking technology innovations, like voice picking, order fulfillment can be accomplished across all sales channels through the same system. Everything from controlling store inventory levels to reduce zero-counts, avoid lost sales, and eliminate clearance reductions to filling online, both e- and m-commerce, purchases by shipping via the customer’s preferred method can now be accomplished by the same team. Using a workforce management solution in the DC that is tied in with sales and order data, along with the order management solution, creates an environment where warehouse associates can fill orders in the most productive manner. Individual customer orders can be picked right alongside the store’s replenishment order, rather than dedicating separate personnel and warehouses to essentially fill the same role in each channel.

All aspects of the customer experience must be addressed when looking to become an omni-channel retailer. In part two of this series I will discuss how loss prevention (LP) solutions are playing a larger role in the customer experience.