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12/04/2020

Commentary: Best practices for omnichannel retail transformation 

shopper looking at shopping cart in cloud

Omnichannel transformation is permeating the retail industry as customer expectations rise and shopping patterns shift.

This change is requiring retailers to quickly determine how to provide their customers with the products they need, when and where they need them. The past few months have revealed a stark difference between retailers who have exceeded expectations in customer satisfaction and profitability, and those who have fallen short. The key to success? Omnichannel transformation and agility. 

The retailers that are winning are those that leveraged omnichannel transformation to shift to additional procure to pay, fulfill via curbside pickup, and BOPIS procedures. But what exactly is omnichannel transformation, and how do retailers deploy it successfully for maximum impact?

What is omnichannel transformation?

For centuries, retailers have operated in two steps – 1. decide on the product to sell, and then 2. work to convince consumers that they need that product. However, omnichannel transformation is changing that process to align more closely with customer wants and needs, allowing the customer to have a bigger impact on what is sold to them and the fulfillment method by which it is delivered to them. 

Omnichannel transformation, at its core, is the realignment of processes and technologies to prioritize customer-centricity. A successful omnichannel transformation will give any retailer the ability to adjust its business to accommodate fluctuating demand in markets. It changes what retailers do, how retailers think, and the technologies that support retailers’ processes, to align with the customer profitably, and in a way that creates a high level of customer satisfaction. 

Six Omnichannel Transformation Best Practices

  1. Ensure organizational alignment. It is critical to ensure that everyone in the company is on board with creating an omnichannel business focused on customer-centricity. The future-state network should nix the “store orders” vs. “e-commerce orders” and “my inventory” vs. “your inventory” mentalities; instead referring to all orders as customer orders, as well as enabling one, integrated view of inventory across all channels to meet customer demand regardless of how the customer decides to engage with your business. Every facet of the retail network needs to be working together in order to foster a successful omnichannel transformation.
  2. Keep the customer promise. Do not promise inventory levels or delivery times that your systems are not equipped to deliver. Reliability is key. Ensure that you are operationally delivering as well. Having the capacity and operational processes to deliver high value to the customer with a focus on exception management, rather than a perfect path, will truly make a difference in omnichannel success.
  3. Create a healthy balance between customer satisfaction at any cost and order profitability. Ship from store and curbside pickup options can be costly for retailers but have remained necessary for survival these past few months. It is important to find the balance between service and cost when enabling these omnichannel technologies. One way to do this could be strategically placing micro-fulfillment centers, rather than fulfilling all digital orders in the store. Enhancing the customer experience without sacrificing profitability and sales is the key to omnichannel success.
  4. Understand your unique inventory visibility needs. A successful retailer will ensure near-time inventory visibility based on volume and time frames of the transaction. For example, an inventory node that sells one unit a day may not need real-time inventory visibility, but a store that is enabling buy online, pick up in-store or ship from store should offer real-time inventory visibility to enhance customer satisfaction. Having your finger on the pulse of inventory visibility needs for every node will foster trust with the customer and improve your omnichannel transformation. 
  5. Enrich customer service. Full visibility to the customer order lifecycle, coupled with the store associate’s ability to help a customer with their order at any point in the lifecycle, is critical. To supplement knowledgeable associates, retailers should have a call center available for further assisting customers with their orders.
  6. Fully integrated technology. The omnichannel technology deployed in your network should span end-to-end, from source to consumption. The technology should drive a seamless experience through every customer interaction utilizing modern supply chain components and industry-leading order management components. 

Notice how technology was the last of the six best practices. It is easy to get caught up in the technology aspect of a transformation project, but a successful omnichannel transformation will place equal importance on people, process and technology. 

The first step to take when considering omnichannel transformation for your network is to perform a readiness assessment, which will define where you are in the transformation journey. Make sure you understand where you are today, what is most important to your customer, where you need to get to in your end state and the people, processes and technology that it will take to get there. 

Gene Bornac is chief strategy officer at enVista. 

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