NRF 2014: Tailoring technology for omnichannel success
Engaging more deeply with customers, and offering a seamless capability no matter where or how they shop, is set to remain one of the biggest challenges for retailers in the year ahead according to experts at Retail's 'Big Show,' the National Retail Federation's 103nd Annual Convention & Expo that took place last week in New York.
If there was one message that came through loud and clear over the holiday trading period, it was that those retailers managing to offer a coordinated shopping experience across multiple channels were the stand-out winners.
The last few years have seen a seismic shift in consumer behaviour: consumers no longer "go" shopping; instead they are always shopping. Whether at work, in the store, on the sofa, or out and about, they use technology to research, browse, buy and discuss their experiences.
For retailers, smart investments in omnichannel ensure that product information is accurate and consistent across all touch points, whether in-store, traditional websites, mobile apps or social media.
They can also help to improve conversion rates, build brand loyalty and repeat sales, and even capture customer demand from international markets.
But engaging more deeply with customers, and offering a seamless capability no matter where or how they shop, is easier said than done.
And it is set to remain one of the biggest challenges for retailers in the year ahead according to experts at Retail's "Big Show," the National Retail Federation's 103nd Annual Convention & Expo that took place last week in New York.
"Consumers don't think in terms of 'channels,' and neither should retailers," says Lori Schafer, SAS retail executive advisor and co-author of 'Branded! How Retailers Engage Consumers with Social Media and Mobility.'
"They think 'I need to buy shoes today,' rather than, 'I'll buy shoes from this retailer's website instead of driving to their store today.' She's going to buy shoes in the most convenient way. The retailer who moves fluidly in this channel-agnostic environment wins."
Schafer points to several trends influencing the omnichannel retail experience, including:
- BYOD (Bring your own device): A handheld device like a tablet or a smartphone is now standard for shopping and gathering product and pricing information on the fly.
- On-the-go check out: Traditional in-store point-of-sale (POS) systems are giving way to mobile checkout as sales associates carry tablets and consumers use their own devices to check out.
- In-store beaconing: Displays with electronic sensors use consumers' phone signals to count how many shoppers walk past a particular display, how many stop to browse, and how frequently someone returns to a store.
- In-store Wi-Fi: Retailers are installing in-store Wi-Fi for customers' convenience and to offer customised, localised promotions and incentives directly to individuals.
- Analytics: Retail analytics is as valuable a currency as half-off promotional codes in the omnichannel environment. Without analytics revealing facts to support decisions, retailers operate on gut feel - not good business decisions.
Retail analytics, in particular, seems to be one of this year's buzzwords when it comes to helping retailers compete more effectively across sales channels.
Analysing data can help companies make precise decisions about everything, from crafting relevant offers for on-the-go consumers to displaying the right assortment of merchandise.
"A consumer essentially carries around a whole store on the smartphone in his or her pocket," says Brian Kilcourse, RSR Research managing partner.
"Retailers know they need to upgrade their technology portfolio to understand consumers' complex path to purchase. It's critical for them to reach customers in new ways, and that can only happen if retailers gather and analyse customer data."
According to analyst Greg Girard of IDC, "there are two overarching forces driving requirements for better omnichannel analytical insight: the reach for relationship, relevance and reciprocity for customer intimacy and the search for scale, speed and scope for supply chain mastery."
The retail supply chain is traditionally broken into two distinct silos: the "back-office" supply chain encompassing the flow of goods between manufacturers, wholesalers and the retailer's DCs, and the customer-facing supply chain encompassing merchandise management, e-commerce and catalogue, stores, and consumers.
With key data spread across multiple systems, buyers, planners, allocators, store operations and marketers often struggle to get enough visibility into the entire supply chain to answer questions like: When will the items we're heavily promoting arrive in-store? On what days should I increase store staffing to receive a large merchandise shipment? Can I commit to a specific date for shipping backordered e-commerce or catalogue items directly to my consumers? When should I invite my best customers back to the store to see new merchandise? Should I airship merchandise to capitalise on an immediate selling opportunity to my best customers?
Jeff Buck, CEO of QuantiSense, says gaining deep, detailed visibility into the supply chain lets retailers "make better decisions about merchandise management, promotions, events, store staffing, the omnichannel experience and more, ensuring that customers always get the items and service they want and expect."
A new whitepaper from eCommerce and multichannel retail consulting firm FitForCommerce also suggests omnichannel strategies require more than simply adding additional channels.
The paper, 'PIM for Retailers: The Importance of Product Information Management in Omnichannel Retail,' says these tools are key to helping retailers collect, manage and share product information across all internal departments and with external partners and suppliers, creating a single source of product information across all relevant touch points.
RFID in retail
However, according to Dr Bill Hardgrave, dean of the Harbert College of Business at Auburn University and the founder of the RFID Research Center, apparel retailers need to "solve the fundamentals first" before starting to focus on enhancing the customer experience.
This means inventory accuracy. "If you haven't started addressing the fundamentals, you are behind," he says.
When it comes to global RFID adoption, not only is this accelerating in apparel retail, but two out of three of the top 30 retailers in US already have RFID initiatives in play, a panel session heard.
"If you're not doing it now, you're already behind, and if that doesn't scare you, it should," Dr Hardgrave advises.
Pam Sweeney, Macy's SVP of logistics, systems and technology, believes: "RFID is about sales growth and improving customer experience. We're moving forward with additional categories and penetration into existing categories.
"The greater the penetration of RFID throughout the supply chain, the greater the benefits we see.
Meanwhile, Francisco Melo, VP of global RFID at Avery Dennison Retail Branding and Information Solutions (RBIS) added: "We're seeing a significant number of retailers piloting and adopting RFID around the world.
"This is due to the return on investment RFID delivers, its ability to significantly improve inventory accuracy and the simplification of implementation."
As retailers rapidly scale-up their RFID rollouts, solutions to shorten the time-to-value and reduce the inherent risks in such a move are coming to the fore.
A new global partnership between Checkpoint Systems and RGIS has been set up to help, offering a full RFID-based inventory management solution that combines the Merchandise Visibility Solution from Checkpoint with RGIS's global team of inventory specialists.
"The benefits of RFID for inventory management are well-documented, with accuracy increasing from around 65% to 98% or even higher," adds Dr Hardgrave.
"But as with many innovations, as they become more routine, compliance to the standard operating procedure can wane, so it becomes important for retailers implementing RFID to take steps to ensure continued compliance to provide consistently high accuracy and payback from the investment."
Click here for a round-up of some of the latest launches and developments at this year's NRF 'Big Show'.
Abstract About Children’s and Infant Wear Children's wear refers to clothing for children aged between 0 months to 10 years. It includes apparel such as outerwear, underwear, nightwear, socks and t...
This report provides information, analysis and valuable insight on developments relating to the home textile industry in the following categories: acquisitions, divestments and mergers; corporate soci...
Licensing business Parigi is suing sporting goods giant Puma, accusing the German sportswear company of stealing trade secrets in order to transfer business to a "secret" joint venture....
Synopsis Canadean's "Jaclyn, Inc. - Company Capsule" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major products and...
- The difference between compliance and safety?
- Central America must make better use of DR-CAFTA
- How M&S plans to revamp its clothing business
- Yarn-forward rules weigh on Vietnam TPP potential
- Is China really going through a slump?
- US Q1 in brief – Guess, Burlington Stores, Sears
- Gap accused of rights violations in supply chain
- BHS supplier Courtaulds Brands in administration
- Nike management changes to drive innovation
- Social responsibility key to winning millennials
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Victoria's Secret Stores, Inc.: Retailing - Company Profile & SWOT Analysis
- Nike Inc in Apparel and Footwear (World)
- Apparel Accessories in Hong Kong, China
- Practical Price Negotiation for Apparel Sourcing Professionals