Global Trends. All Channel Retail Paul Hill Solution Director, Retail
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1 Global Trends All Channel Retail Paul Hill Solution Director, Retail
2 The new bread of shopper: Informed, empowered and always connected
3
4 Single Channel Multi-Channel Omni-Channel All-Channel Legacy Reality Aspiration Nirvana Customers experience a single type of touch point Customer sees multiple touch points acting independently Customer sees multiple touch points as part of single brand Customer experience a brand, not a channel within a brand Retailers have a single type of touch point Retailers channel knowledge & operations exist in technical and functional silos Retailers have a single view of the customer, but they operate in functional silos Retailers leverage their single view of the customer in coordinated and strategic ways
5 The Furious Pace of Change and its Impact on Retail
6 Accelerating Pace of Change 3.5 yrs 10 yrs Time to 50% Consumer Adoption 15 yrs 28 yrs 31 yrs Change Will Happen Faster Than We Can Imagine 6
7 Driving this rapid change, the Millenial Born Between 1981 and 2000
8 76M 51M 80M The Largest Generation Retail has Ever Seen
9 The store is often the last step the millennial takes
10 DISCOVER COMMUNICATE EXPLORE SELECT COMPARE Today s Yesterday s SOCIALIZE Moments of of Truth Influence Opportunity and Risk in Every Moment
11 1:1 Mass CUSTOMER EXPECTATIONS YESTERYEAR TODAY New Supply Chain Complexity
12 Consumer led change Product choice access to the biggest shop on the Planet Buying choice buy from any channel, any device, anytime Fulfilment choice deliver anywhere, anytime Knowledge rich Product info. and live reviews Price savvy access to the lowest price available Connected instant communication to social media channels Copyright 2013 JDA Software, Inc. - CONFIDENTIAL
13 Today s Enterprise Focus Right Product Right Place Right Time Right Price Right Quantity Tomorrow s Customer Focus Product I Want Where I Want The Device I Choose When I Want to Shop The Price I Want When I Want It R Transitioning to I
14 Customer Front & Center Real-time, shared inventory Copyright 2013 JDA Software, Inc. - CONFIDENTIAL
15 How Can Retailers Succeed? Processes must evolve from product to consumer centric People need to adapt new practices that ensure an aligned enterprise Technology must be capable of supporting new business paradigms PEOPLE PROCESS TECHNOLOGY
16 Reacting to consumer behavior Nightly inventory batch updates Static & rigid supply chains Channel segmented inventory Channel order management Supply chain is cost center Anticipating consumer demand Real time inventory visibility Flexible & dynamic supply chains Enterprise inventory orchestration Profitable distributed order management Supply chain is a strategic differentiator
17 CHANNEL STRATEGY All Channel Strategy Maturity Model All Channel Cross Channel Web Channel Store Channel TRANSACTIONAL BRICK & MORTAR MASS MERCHANDISING COST CONTROL EXPLORATORY SIMPLE WEB PRESENCE SEPARATE TEAMS DISPARATE INVENTORY 1 MANDATORY BRAND ENHANCEMENT LIMITED COLLABORATION INVENTORY VISIBILITY 2 IMPERATIVE MAXIMIZE ENGAGEMENT INTEGRATED TEAMS SHARED INVENTORY 3 4
18 Unified All-channel customer engagement Consumer-centric All-channel assortments Flexible, real time, responsive supply chain Profit-based distributed order management Single enterprise-wide demand shaping forecast Key Tenets of All-Channel Success
19 Unified All-channel customer engagement Consumer-centric All-channel assortments Flexible, real time, responsive supply chain Profit-based distributed order management Single enterprise-wide demand shaping forecast Key Tenets of All-Channel Success
20 Existing Practices Disparate Customer Data Sources Multiple Views of Customer Independent Customer-Channel Interaction Emerging Practices Single repository for all customer data Integrated all channel view of customers Synchronized channel customer interaction Store Web Catalog Call Center All-Channel Engagement
21 All-Channel Data Capture PRODUCT CUSTOMER % SOCIAL SERVICE see adding customer data to merchandising as a top-three opportunity RSR Research Optimizing Assortments to PREFERENCES Invigorate Retail, CLICKSTREAM CHANNEL TIME
22 50 % choose to shop in-store 45 % shop in-store for the experience Source: Accenture 47 % shop both in-store & online Source: Teen Vogue The Store Still Matters
23 Unified All-channel customer engagement Consumer-centric All-channel assortments Flexible, real time, responsive supply chain Profit-based distributed order management Single enterprise-wide demand shaping forecast Key Tenets of All-Channel Success
24 61 % of major purchase shoppers start with ONLINE RESEARCH 1 Assortment Demand: Today s Reality to narrow products and brands 2 IN-STORE RESEARCH BACK TO THE WEB 67 % decide how to pay before they go in store What can I afford? Best Deal? How will I pay? 3 4 to experience and finalize selection Advice from friends & family $ #? MAKING THE PURCHASE 94 % of consumers make major purchases in store 5
25 Existing Practices Chain wide homogenous assortments Pre season assortment range plans Disjointed or loosely coupled processes Gut feel buy-based decisions Inadequate supply chain integration Inconsistent practices across channels Emerging Practices Micro-segmented all channel assortments Continuous lifecycle assortment planning Tightly integrated to all critical processes Analytics driven sell-based decisions Incorporate supply chain constraints Consistent all channel business processes Store Web Catalog Call Center New Assortment Paradigms
26 Assort to the Shopper, not the Channel Customer Profile Assortment Demand Channel Fulfillment Channel Strategically position assorted inventory across the network and remain flexible enough to manage a myriad of options
27 Unified All-channel customer engagement Consumer-centric All-channel assortments Flexible, real time, responsive supply chain Profit-based distributed order management Single enterprise-wide demand shaping forecast Key Tenets of All-Channel Success
28 Cost Center vs. Strategic Weapon Supply Side Dominance Segregated Channel Strategy Constraint Based vs. Customer Driven Rigid, Single Path Unsupportive of All-Channel Retail Traditional Supply Chain View
29 New Levels/Sources of Demand Causing Increased Variability 1 2 Increased Service Standards Across All Retail Channels Demand shifts to alternate channels e-commerce, mobile, social interaction growth Demand generation & desired fulfilment channel Rising consumer expectations, zero tolerance 24/7 connected consumers desire for transparency Balancing customer service and cost to serve Creating Sustainable Business Models for Profitable Growth 3 4 Increased Supply Chain Visibility and Traceability Heightened pressure for forecast accuracy Increasing regulation & carbon footprint reduction Segmentation agendas to manage disruption Demand shifts to alternate channels e-commerce, mobile, social interaction growth Demand generation & desired fulfilment channel Forces of Change
30 All-Channel: Integrated objectives, methods and platforms All-Channel e-commerce Store Headquarter Planning Marketing Warehouses Planishment Mobile Drop shipment Shared stock Shared stock Store E-Commerce Till PSP Collect in store Home delivery Customer Success will come when the SC is managed as a unified total vs. independent business units
31 Unified All-channel customer engagement Consumer-centric All-channel assortments Flexible, real time, responsive supply chain Profit-based distributed order management Single enterprise-wide demand shaping forecast Key Tenets of All-Channel Success
32 61 % of all online shopping carts are abandoned`` Why We Walk Away 44 % High shipping costs 41 % 25 % Not ready to purchase High product prices Source: Invesp Customer Service Realities
33 Walking the tightrope between Customer Expectations and Organizational Constraints Retail has evolved from a single-channel transactional environment into a complex matrix of all-channel order orchestration Retail s New Balancing Act
34 How to Maximize Profitability and Meet Her Expectations? Platinum Customer Places Order via Website Free 2-Day Delivery Vendor Has in Stock Shipping Constraint? Adelaide Melbourne Brisbane Gold Coast Six In Stock in Her Size Busiest Weekend Plenty in Stock in DC Shipping Constraint? Customer Engagement: All-Channel Order Orchestration
35 Unified all-channel customer engagement Consumer-centric all-channel assortments Flexible, real time, responsive supply chain Profit-based distributed order management Single enterprise-wide demand shaping forecast Key Tenets of All-Channel Success
36 Incorporating the voice of the customer as a demand influencer Anticipating consumer response to price, promotions and offers Complexity managing. apps Purpose-driven apps address channel shopping behavior across all channels Leveraging the consumer s cross New Demand Challenges Emerge
37 Incorporating the voice of the Orchestrating customer all as downstream a demand influencer systems to profitably execute against demand Anticipating consumer response to shaping plans price, promotions and offers Organizational Leveraging constraints the consumer s buried in cross myopic demand channel execution shopping principles behavior (vs. integrated demand management) New Demand Challenges Emerge
38 Succeeding in the future The key is flexibility. With the increasing occurrence of channel overlap and the pace at which new applications and devices are brought to market, the future leaders of retail will be those who can quickly.. embrace operational changes brought about by new technologies and anticipate integration of emerging solutions that have not yet been invented. Copyright 2013 JDA Software, Inc. - CONFIDENTIAL Source: Stores Magazine, January 2013
39 Global Trends All Channel Retail
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