While omnichannel retail has existed in concept ever since the birth of the internet, the practice has only been gradually gaining steam for the last couple of years. But 2016 will likely go down in history as the year omnichannel really broke through and stopped being a voluntary add-on for commerce operations and became an essential core competency.
Omnicommerce went mainstream — if for no other reason than it became pretty clear pretty quickly that merchants that don’t get on board the omnichannel train aren’t going to be mainstream merchants all that much longer.
Infor Head of Product Strategy David Dorf says that this is a good thing, because it means that, these days, the retailers he’s talking to are coming in the door ready to talk omnichannel in a very serious way. And he’s talking to a lot of retailers. Dorf noted in an interview that his phone has been “ringing off the hook” for the last six months as the desire to reach out and access the consumer on a path to purchase that is ever more diverse and twisty has become a lot more acute.
“I just met with a retailer a month ago who told me: ‘We understand omnichannel, we get omnichannel and we do omnichannel. What’s the next thing?”
On the one hand, this is great news, especially for a firm like Infor which specializes in building the enterprise software that allows financial systems, resource planning, supply chain and customer relationships to be under a single seamless umbrella. A world where everyone is into omnichannel and “gets” it is a better retail environment.
The not-as-good news is that “omniready” or omnichannel means so many different things to so many different merchants, from both a construction and services standpoint, that actually getting the entire omnichannel choir singing from the same hymnal is going to take some work.
“You can deliver an omnichannel experience to your customers by sort of taping it together and using wires to kind of build masquerade systems that make it look a bit like omnichannel, but underneath, it’s not.”
Underneath, he says, there are overnight batch processes and inventory that isn’t transparent, prices and promotions that are wrong and a whole lot of chances for friction and an unsatisfactory system for everyone.
“Frankly, it’s not very cost-effective for the retailer. So, we say, ‘Let’s not talk omnichannel; let’s talk about converged commerce,’” Dorf explained.
Converged commerce, as Infor explains it, is an omnichannel ideal, which basically means the system works backwards and forwards across the platform. Consumers can track and purchase their goods at a variety of digital end points, but underneath, “it’s all run by the same engine,” meaning changes in one channel update in real time throughout the system.
It’s a journey toward more functional — and broadly usable — omnicommerce that Infor recently underwent with the Designer Shoe Warehouse, or DSW as it is more commonly known. So, how to build from the system that worked for no one into the system that worked for everyone?
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“There’s a lot of talk about the customer experience and … we want to focus on that.”
That is the right instinct, Dorf explained, but to really build that customer experience, retailers should actually take a giant step back and ask what the sales person’s experience is.
“You have to focus on the employee experience. Your typical millennial worker is going from an iPhone to a green screen or a visual basic input screen. It’s cumbersome; it slows the system down.”
The problem is the consumer experience can only be as good as the capacity it’s built on top of, and DSW ran into a problem that a lot of retailers run into: There was a fundamental mismatch — or, actually, a series of them.
Highlights included mismatches between the data streams running from the front of the store and from the back of the store, between their online and in-store channels and the mismatch of employees trying to “true up” the information in real time using technological platforms 25 years out of date and out of step with any other products they use in real life.
This was not a system designed for success, and in fact, what DSW saw was a hit in its customer markings because employees who should have been on the sales floor moving shoes instead were in the back trying to make incompatible systems talk to each other.
“We sat down with them and went through how to reimagine the system, and from there, we built a digital mesh that captured their goals, which were focused on ‘sell it, move it, run it.’”
The system it’s designed is a cloud-based retail suite geared toward mobile usage. The new software will allow DSW to access new security features, upgrade its back-office tech with minimal downtime and give the discount shoe retailer access to supercomputing for data analytics. But mostly, the system is geared toward the converged commerce idea that Infor advocates; instead of a bunch of separate systems trying to talk, Infor is a single engine from which the service flows.
Dorf notes that the biggest challenge with omnichannel these days isn’t selling the concept; it’s building it for retail in a way that is scalable, workable and actually productive. For big players, the need for omnichannel is increasingly clear, but the ecosystem in retail is a lot bigger than big-box players, like DSW.
“There are smaller retailers out there that are still afraid. They’re still saying, ‘I’m gonna stick with what I have and maybe change one piece or part out,’” Dorf noted on the growth of converged commerce throughout the marketplace.
And though he noted the transition might not be easy, he also didn’t really think of it as a matter of “if” at this point for retailers but “when.”
Those systems are harder to build upfront, he noted, and thus, it’s taken time for retailers to warm to it. But trying to patch one’s way to omnichannel not only doesn’t work in the long run, it actually starts to be worse than offering nothing at all, as DSW learned.
“I personally don’t think that a piecemeal attempt is going to last because, to really achieve what’s been promised to consumers, you need that single selling system,” Dorf said.