In retail today a multichannel strategy is an essential prerequisite for continuing to be able to secure customer loyalty. Implementing this strategy does, however, involve negotiating a number of pitfalls. There is a risk of being ensnared in a tangle of interfaces as different specialized software solutions are dovetailed into a combined system.
Digital change is currently calling into question many traditional patterns in retail business. Good product quality and an appropriate price, for instance, are often no longer enough to be of relevance for the customer. On the contrary, those companies that concentrate solely on fulfilling these basic requirements run a risk of becoming comparable and thereby interchangeable.
Superbly coordinated multichannel sales and a consistent brand experience across all channels can on the other hand be a building block by which to set your company positively apart from the competition. The potential to impress customers in this area is certainly there. After all, few companies have so far succeeded in being relevant for consumers across all sales channels. A mere four per cent of consumers interviewed in a study by ECC Köln and SAP Hybris said they would consider the same retailer for over-the-counter and for online shopping.
There is more to Multichannel than just Setting Up Another Channel
Isolated steps are not enough to make headway in this differentiation area. Setting up a Web shop comes nowhere near to transforming a chain store into a multichannel retailer. If anything, isolated lighthouse projects that are not integrated into an overall strategy run the risk of mutating into ineffective standalone solutions. These solutions make the already complicated dovetailing of sales channels even more difficult and tie up valuable resources in the process. What matters is, therefore, to think holistically from the start and to draw up connected processes for multichannel retail that are lived out across the company.
Setting up a Web shop comes nowhere near to transforming a chain store into a multichannel retailer.
This total integration of processes is not yet the reality at many companies, however. Instead, the lack of an overall strategy is frequently reflected in the existing system landscape. Many retailers have purchased in the course of time specialized software solutions for their different divisions, such as the Web shop, merchandise or branch management and have thereby established a combined system of which the parts are connected via interfaces. The specialized applications mostly perform their respective tasks very satisfactorily, but their interaction often poses challenges that the individual software solutions are unable to map due to their limitation to a specific area of activity and their lack of vision where processes outside of this area are concerned.
Discounts are an example that illustrates this problem especially clearly. There are countless ways to offer discounts to customers, and the software solutions mentioned above are naturally designed to offer a wide range of discounts and able to manage the different options very well. But combining different applications can, however, lead to problems, such as if the Web shop offers a discount of which the backend cannot depict the processes sufficiently.
Let us assume that a Web shop customer is offered a five percent discount if he orders more than EUR 100 of goods in at least two product groups. The customer then selects three different articles in two product groups, totaling just over EUR 100 so that the Web shop automatically deducts five percent from the order value. From the checkout the order goes from the Web shop to the ERP, which we must now assume, to make the example clearer, that it is aware of linking a discount to a certain order value but is unable to map the additional product group requirement.
The total integration of processes is not yet the reality at many companies.
In a case of this kind, processing the order does not usually pose a problem. The ERP does not need to understand how the discount has come about in order to process the order. It becomes more difficult, however, if the customer returns one of the articles ordered with the result that the order volume falls below EUR 100 or no longer includes two product groups. The original discount then no longer applies. If the ERP does not understand the discount conditions or cannot map the underlying processes the system may respond incorrectly.
The example may be a very simple one but it does show that if the software solutions used are not perfectly coordinated, chaos is a foregone conclusion and efficient process implementation can no longer be ensured. Nor is that all. In the worst case the resulting problems do not go unnoticed by the customer so that after this negative shopping experience he or she decamps once and for all, preferring the variety of choice offered by the competition.
System Consolidation is the Magic Word
Along with the discount problems many other challenges confront the coordination of software solutions and take them to their limits. So the interfaces designed to ensure communication between the different products are of crucial importance for the success of multichannel business – and developing resilient interfaces that cover all eventualities is a highly complex and demanding task.
In the application landscapes described, with a combination of many different products, the responsibility for interfaces often lies with the retailer for lack of a central IT partner. This constellation makes the problem even more acute because the retailer is out of his depth, his core competence being retail, and in coordinating interfaces can quickly come up against his limits.
Rather than invest valuable resources in building bridges between the different standalone solutions consolidating the application landscape used and replacing combined systems by integrated systems would seem to make sense. Platform solutions oriented to connected processes already have the interfaces between coordinated subsystems that are required. Furthermore, platform providers have extensive experience in developing resilient interfaces and also assume responsibility for system integration. Coordination problems between system components are thereby avoided and the customer is shown a consistent overall image across all channels – with the result that there is no longer any hindrance to a positive multichannel experience.
Image source: Fotolia – Montri