THE ULTIMATE GUIDE TO REPLATFORMING (part 1 of 3)

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1 THE ULTIMATE GUIDE TO REPLATFORMING (part 1 of 3) UNITEU TECHNOLOGIES operations omnichannel strategy customer centric

2 After spending thousands of hours helping hundreds of companies navigate the replatforming process we ve created the following guide to share best practices and pitfalls with every organization that s considering replatforming. While emerging brands experiencing rapid growth are the ones most commonly searching out solutions, all retailers inevitably consider replatforming to respond to changing consumer behaviors and technology trends. Whether scaling up to meet demand, or responding to the latest technology demands such as omnichannel or mobile shopping, all retailers should (as leading retailers do) establish platform development plans and ensure resources are allocated to successfully accomplish them. The purpose of this three-part guide is to provide retailers with the framework for a successful migration. Without these key components, retailers spend significantly more in technology development, systems design and operational costs. Retailers that leverage this report in their replatforming endeavors will gain a strategic advantage over competitors. While this guide establishes key points in the replatforming methodology, it doesn t address industry-specific or organization-specific issues you ll certainly encounter that s where working with experts like UniteU comes into play. This section of the report contains two parts, Benefits, Not Features, and the Omnichannel Mindset. Each introduces important concepts that support the replatforming framework and give retailers a competitive advantage. Parts 2 and 3 of this guide will include points on using the Cloud, leveraging data, timing, vendor/ partner strategy, right-sizing investment and deployment.

3 Benefits, Not Features The greatest temptation retailers face is to develop and deploy based on the latest and greatest features technology vendors have to offer. It s easy for retailers to respond to news reports about one cutting edge trend or another by seeking out vendors who are ready to sell their single-point fix to that trend. The recent trend to deploy mobile point-ofsale (mpos) technology is a perfect example of chasing a feature solution rather than developing to a needed benefit. With pundits touting the virtues of mpos, retailers are scrambling to mimic the innovation most commonly seen in retail outlets by Apple and Microsoft. And vendors are happily lining up with mpos solutions. customer experience. The challenge, however, is that single-point solutions that address mpos, but that don t integrate with inventory, accounting or ERP systems leave retailers with back-end issues that cost money and technology resources, and that have the potential to damage the Successful retailers seek out desired benefits before pursuing features. Recently, CitySports, a UniteU client, showed through operational studies that in-store kiosks (which represented a significant investment) were not being used by customers or sales agents. Surveys also showed that customers wanted a solution for browsing inventory - exactly what the kiosks were created for - but didn t like having to both check out on the kiosk for certain purchases and then go and utilize the regular checkout line for their other purchases. Their feature-based approach to a customer service solution had fallen short. CitySports needed an integrated POS solution what would provide customers with a single-pointof-checkout for both in-store items and items that are only available online or at another store location.

4 CitySports deployed UniteU s umobile POS solution, which fully integrates with their ecommerce platform and backend systems, and makes the customer checkout experience seamless. With umobile POS, CitySports customers now purchase products in-store and from the warehouse in an elegant, single transaction. Sales associates are now empowered with organization-wide inventory availability, and get the added benefits of online product descriptions and images, and seamless in-aisle checkout. The mpos is a true digital sales assistant and offers so much more than their previous kiosk solution. UniteU recommends that retailers approach replatforming in a similar manner. Start with operational studies to discover the benefits customers seek or that sales agents need. Then, identify integrated solutions that provide those benefits. The following questions will help retailers discover areas to study: Shopping Experience: Find out from customers their opinions on the shopping experience. What do they like? What don t they like? But also, how well does the shopping experience align with your brand attributes? And are they able to find what they re looking for in-store? Are they aware of in-store and out-of-store alternatives in color, size and other options? ecommerce Utilization: How much volume are you processing through your ecommerce site? What are the conversion rates on your site? Where and why are consumers exiting your site? What are your goals for growth and what type of scalability will you need in a new platform? Market Agility: What are your current barriers to implementing changes quickly? What are some of the latest technologies you hope to be on-trend with. Do the platforms you are looking into keepup with the latest 2012 To 2017, Oct. 29, 2013 Forrester Research Inc., US Cross-Channel Retail Forecast, innovations? And will they allow you to become more agile? Web Content Management: With the number of digital touch-points ever increasing and a growing focus on presenting rich and more personalized content, product catalog and content management tools are still an important concern for any replatforming initiative.

5 ecommerce platforms are the backbone of any online presence and should be leveraged as a single distribution point for all of your content across channels. Operational Improvements: Are your employees spending time re-keying data anywhere because of a lack of tightly integrated systems? Are you leveraging your data properly in all the right channels? In-store Considerations: How extensively are your mpos devices getting used? Who is using them? How about mobile device utilization? How does the mpos checkout experience compare with the traditional register experience? Customer Satisfaction: What is your level of customer satisfaction? What pain points are commonly identified when surveying customers? What do customers really enjoy about the purchase experience? Competitive Benchmarking: What are your competitors doing that really works? What have they failed at? Checkout Process: Evaluate the checkout process. How long do customers wait in line? What do they experience while in line? What do cashiers experience? Do they have all the tools necessary to complete their jobs effectively? By identifying those strategic opportunities to provide more benefits to customers and to employees, retailers get their priorities right and can discover the features that will actually get them ahead.

6 Establish an Omnichannel Mindset After identifying key benefits, retailers are prepared to change their mindset and subsequent platform approach from segmented sales channels (e.g., retail, ecommerce, mobile, distribution and direct) to an integrated omnichannel approach. Leading retailers who start the replatforming process with an omnichannel mindset as opposed to a segmented distribution mindset see greater success due to both improved customer experience and operational efficiency. According to a Forrester Research, Inc. report written by Principal Analyst Peter Sheldon, 52% of ebusiness leaders surveyed stated that omnichannel integration programs are a top priority for the coming year. This should come as no surprise given that web-influenced offline sales and online sales combined now account for more than half of the $3.3 trillion total retail spend in the US [ Commerce Technology Investment and Platform Trends 2013, July 25, 2013]. Omnichannel Initiatives Are And Will Continue To Be A Major Focus For Retailers Forrester Research Inc., Commerce Technology Investment and Platform Trends 2013, July 25, 2013

7 So what is an omnichannel mindset? It s a cohesive initiative to establish a single platform that allows for multiple systems integrations. Sounds complicated, right? Well, it certainly can be. Retailers need a platform that can offer the technology and tightly integrated systems that enable customer centric enhancements, such as store inventory visibility, buy-online-pick-up-instore, ship from store, and digitally empowered sales floor associates. However, retailers most frequently approach replatforming primarily for the perceived value in new technologies, not in terms of operational impacts and how systems will actually need to function together. The emotional response to this perceived value drives initiatives that cost extra time, money and resources, yet don t yield the desired results. Often initiatives run disparately creating independent systems that require thirdparty integrations that simply don t work. When approaching replatforming with an omnichannel mindset, retailers create a foundation for the initiative that focuses on operations, customer experience and strategic differentiators. For example, UniteU customer Pharmaca identified the need for their online presence to be able to function much like their 20 plus retail stores, by offering not only products but expert advice on health and wellness as well. After identifying the need for this key benefit, they chose to leverage UniteU as their omnichannel commerce platform. Pharmaca was able to quickly implement a new web storefront that offered shoppers the additional benefits of health and wellness articles, and information paired systematically with their product offerings. Pharmaca was also able to implement a loyalty integration that works not only online but within the bricks and mortar stores as well. Shoppers can log in online and check their loyalty points

8 and even view transaction histories from purchases made within the store. The retailer saw their daily online sales jump 30% after replatforming with UniteU and launching the new site. Pharmaca next chose to implement a mobile commerce site with UniteU that shares the same product data, transaction processing and order synchronization as their main ecommerce site, so that all of their mobile processes are synchronized. This means that adding the mcommerce site has a low operational impact, and is a more seamless experience for the shopper. UniteU follows a flexible process named PACCES for every implementation. Using PACCES, UniteU works closely with its clients to ensure that not only an effective ecommerce site design is considered, but just as importantly that all the supporting operational processes are put in place right from the start. The elements of PACCES are: 1. Preparing Products and Catalogs optimizing your online catalog including products, pricing, attributes, catalog organization and images 2. Attracting Visitors - messaging, SEO and offline marketing that increase conversion potential 3. Convincing Browsers to Buy - site design, navigation, performance and calls-to-action 4. Converting Orders into Sales - order management, fulfillment, exceptions and returns 5. Engaging Customers - shopper engagement, building loyalty and advocacy, creating an immersive customer experience 6. Synthesizing Data for Continued Success analysis of site performance and measurement of key performance indicators (KPIs), and continuous performance improvement by implementing changes based on KPIs UniteU also use PACCES as the foundation for ongoing consultation services that it provides

9 for interested customers. By doing so both UniteU and the client can readily identify and agree on areas of the website and back office operations that might benefit from improvement and measure progress to improvement goals. The consultative process is also an effective mechanism to mutually plan short-to-long term projects for smooth implementation. By approaching replatforming with an omnichannel mindset, retailers realize greater system integration and better operational efficiency. They also improve the customer and sales associate experience, and enjoy competitive advantages that stakeholders can appreciate. In Part 2 of UniteU s Ultimate Guide to Replatforming we ll further explore the omnichannel approach by discussing data management, leveraging the Cloud, and optimizing the technology and partner landscape, as well as other key concepts that help retailers avoid inefficiencies and achieve the results they re hoping for. About UniteU Technologies ( UniteU creates technology that enables unified commerce experiences across channels and devices. It is the industry leader at removing the complexity, risk and cost of enterprise e-commerce platforms so companies can focus on initiatives that drive growth across their digital, mobile and physical channels. UniteU offers a wide-range of solutions and services including umobile POS and UniteU Commerce, a smarter, faster cloud commerce platform that embodies more than a decade of omni-channel insights and high-volume experience. Superior technology and performance has resulted in an impressive client list that includes Pharmaca, The Miami Heat, In-N-Out Burger, Shoe Station and City Sports.