JEM Retail Consultants providing services in buying and merchandising, Programme Management, IT services and Logistics & Warehousing.

Saturday, 8 February 2014

Omni-Channel - The People Issues

"Multichannel retailing is the use of a variety of channels in a customer's shopping experience, including research before a purchase. Such channels include: retail stores, online stores, mobile stores, mobile app stores, telephone sales and any other method of transacting with a customer. Transacting includes browsing, buying, returning as well as pre and post sales service." So says Wikipedia!

Since our last blogs about retailers potentially seeing systems to manage the omni-challenge as a panacea to their trading problems, I'm heartened to see at last that a few people are starting to get a sense of perspective about what this truly means.... and that's NOT a great IT system alone. I am not, of course linking our small contribution to any change of understanding amongst retailers and analysts! For previous articles take a look at "Why Retail Can Never Be Led By Technology" and "What Does Omni-Channel Mean and Can Every Retailer Deliver It?"

The whole omni-channel way of working is not about a system, it's about a retail business putting customer needs first and letting them buy what they want, how they want, and acquiring it from a store, a delivery, or via click and collect. Omni-channel retailing allows (ideally) a totally seamless journey of the product to the customer. To do this, retailers must look at how they operate internally. The traditional silos of Buying and Merchandising for bricks and mortar stores, teams for online, operations departments just for stores, separate international teams, wholesale teams, franchise teams - all these have to go! How many retailers are brave enough to do that?

This is highlighted in Retail Week by Martin Newman from Practicology: "....most customers don't think about the organisational structures of the retailers they buy from when they are crossing channels, switching devices and updating their social media feeds on their latest purchase." And why should they?

I know of a number of "Business transformation" projects about to start but guess who is running them? The IT Directors! No offence to them at all but the technical side comes further down from the start of any such project (the give away is the word "Business"). First should be the strategic direction and process, then how the organisation should be structured to successfully deliver this strategy. Are the capabilities even there? What type of people are needed and with what skills? Conventional Buyers and Merchandisers may need to "up-skill". Who really has the luxury to have both digital and bricks and mortar specialists? In reality it shouldn't be difficult to improve skills - despite those in the digital world portraying what they do as some higher level of intelligence! Those businesses who scoop up people who can work across sales channels will win against those who keep channels separate.

Ian Geddes, Head of Retail from Deloitte says "business strategy skills, creativity, and knowing how to deliver technology in a more agile way are also necessary." I couldn't agree more. The 6 major challenges identified by Deloitte to successful omni-channel retailing (from start to end) are:

  • Supply Chain and Cost to Serve
  • Consistent product offer
  • Single view of the customer
  • Operational / functional silos
  • Culture, measures and incentives
It seems to me that far too many projects have started without the people skills and structures being considered and defined (as well as costed!) together with the long term strategic goals of the business being clearly defined and used to ensure projects will deliver what they need to deliver.

From my experience it's not rocket science to pull together a multi-channel, international business process (lengthy possibly if you want to keep it simple, and you should) and select the correct IT system and system provider. But, changing traditional internal structures with all the various egos and power plays that go on can be really difficult and is hugely disruptive to day to day trading.

That is when it's worth investing in consultants who can guide you through and provide best practice untainted by any other agenda. The consultants must take all the teams with them and the only person who can ensure all this works successfully is the CEO of the business. How many are brave enough to  tackle what needs to be done to make their business truly omni-channel? Far more, I feel, will stop short of this and retain their silo structures.

No IT system on it's own, however sophisticated, can achieve the true omni-channel experience for customers. This year will be very interesting!

Written by Erica Vilkauls: Director JEM Retail Consultants

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