Systems Integration, Data Integrity Ensure Omnichannel Success
To provide customers with true omnichannel shopping capabilities, retailers must internally align all store and ERP functions. Mike Burge, founder and CEO of integrated retail enterprise platform provider MI9, recently spoke with Chain Store Age about how effective omnichannel retailing works and how retailers can leverage IT systems to achieve success in an omnichannel environment.
What are the main objectives of omnichannel?
The main objectives are to increase sales and market share by allowing customers to purchase, ship and return merchandise anywhere they want. The retailer must manage the merchandising, transaction processing and fulfillment steps closely to ensure that the shopping experience is easy and intuitive for the customer and still makes sound business sense.
What are some of the biggest obstacles to omnichannel retailing?
Customers increasingly prefer to hopscotch through multiple channels to complete their shopping. Many retailers, however, designed their channels to function best as independent business units and therefore run multiple disparate systems for merchandise management, e-commerce, POS, order processing and warehouse management.
Very often these systems are poorly integrated, so it is difficult to make omnichannel work seamlessly or to get a dependable cross-channel view of performance. Data integrity can often vary greatly between these separate silos of information.
How can the IT department overcome these obstacles?
The key challenge for the IT team is connecting and integrating all channels so that they can operate interdependently sharing a common view of sales, inventory, scheduled deliveries and customer data. This seamless integration of channels can only be achieved by migrating to a modern systems architecture that facilitates immediate communication among all parts of the enterprise, as well as with collaborative trading partners, such as shippers, tax services, etc.
To effectively implement the objectives of ‘sell anywhere, fulfill anywhere, return anywhere,’ retailers’ systems must be able to process all sales and inventory transactions in real time.
How can retailers ensure that they are able to "fulfill anywhere?"
When the buyer has access to a fully integrated system, he or she can use item-level demand forecasting to accurately anticipate inventory requirements at each fulfillment point. The buyer can then work collaboratively with suppliers to establish delivery schedules that cover peak demands without requiring the chain to carry excess inventory.
The buyer can also leverage the omnichannel infrastructure to support regional order fulfillment and to manage direct shipments of select merchandise directly from the supplier to the customer. These changes make more merchandise available to shoppers while reducing overhead, such as shipping costs, inventory and the need for excess warehouse space.
What specific steps is MI9 taking to help retailers succeed in an omnichannel environment?
MI9 brings together all the tools omnichannel retailers need to profitably provide a seamless omnichannel shopping experience in real time. MI9’s fully integrated system unites all store-level and ERP functions and provides users with information in real time anywhere in the enterprise via the MI9 Retail Hub, which provides up-to-the-moment data on demand to any device with a browser.
All channels share one view of the customer through the central database that is also a repository for all product information and images. All channels also share a comprehensive merchandising system, MI9 Merchant, that helps merchants with their forecasting, allocation, item management, purchasing and vendor management. Inventory lookups, cross-channel fulfillment, customer loyalty and other functions are all managed through this one integrated system.
Social media platforms offer retailers a chance for direct engagement with consumers as well as access to highly personalized data, all in real or near-real time. During the holiday season, with its intensified levels of competition and customer distraction, having the type of direct promotional connection with customers that social media can offer is more crucial than ever.
Yet for many retailers, how to effectively leverage social media for holiday promotions and marketing is something of a mystery. Here is a brief review of three vendors that can offer retailers assistance on a particular popular social media platform: 8th Bridge specializes in Facebook, Crimson Hexagon specializes in Twitter, and Piqora specializes in Pinterest (with the added bonus of Instagram and Tumblr).
8th Bridge: 8th Bridge provides the Facebook-oriented Social Graphite platform, which combines what the vendor terms social shopping engagement with social identity analytics. Social shopping engagement features allow retailers to integrate customer feedback with the Facebook Custom Open Graph and also use it to trigger stories into the timelines of customers and the tickers and news feeds of their friends. In addition, customers can curate and share collections of products from a retailer’s site on their Facebook pages, receive special social incentives and rewards, and provide social ratings of products.
These activities lead to social identity analytics, which provides three core capabilities of snapshots, crowds and campaigns. Snapshots are quick social profiles of individual customers, including Facebook profile photo; interests; product tastes; and key metrics about their influence, expertise and brand awareness. Crowds organize snapshots into targeted groups based on customizable metrics, and campaigns are then built around the crowds. 8th Bridge lets retailers offer a number of social engagement features to customers, with the retailers using the resulting data to build individual and group profiles for better targeting.
8th Bridge technology is designed to help retailers apply Facebook as a tool for developing critical social brand advocates whose voices are more likely to be heard over the holiday promotional din than the voices of marketers and advertisers. It’s also intended for developing highly segmented customer profiles that will help personalize branded holiday campaigns.
Crimson Hexagon: Crimson Hexagon offers the ForSight platform, based on a proprietary mathematical algorithm known as BrightView, to perform analysis of social media commentary, including keywords and sentiment to provide insight into how consumers feel about a particular retailer, product or brand. Retailers can apply the solution to analyze both a real-time stream of social media conversation and historical commentary, including the full Twitter firehose as well as postings on social media platforms, such as Facebook, YouTube and blogs.
Retailers can perform sentiment analysis on up to 12 categories for a specific topic and define their own categories as well as use preset offerings. In addition, BrightView analyzes social conversations holistically, resulting in ForSight delivering contextually relevant data with a minimal amount of "human training" of the tool. Most significantly for retailers running holiday promotions, Crimson Hexagon offers real-time insight into what consumers are talking about and feeling. This allows quick adjustments to short-term holiday campaigns whose effectiveness cannot usually be determined until well after the holiday season is over.
Piqora: Piqora presents itself as a marketing suite for the visual Web, offering solutions that aid marketing efforts across the visually oriented Pinterest, Instagram and Tumblr social networks. On Pinterest, Piqora enables retailers to customize and track pin-based contests and promotions, as well as track trending images, content and influencers, and perform competitive analysis.
Retailers can also leverage Pinterest technology to track their top photos and videos, as well as top photos and videos of competitors and top influencers and hashtags driving brand engagement, on Instagram. Similarly, Pinterest enables retailers to track trending images, brand reach and engagement, and competitor performance on the Tumblr microblogging site.
The holidays are an emotional time for many consumers, and smart retailers know the right visuals can have a huge impact on a shopper’s emotional state. Piqora lets retailers maximize the impact and return of visually based social campaigns and, much like Crimson Hexagon, make real-time adjustments based on tracking of social media trends as they happen.
Tiffany’s performance in China buoys Q2
NEW YORK — Tiffany & Co. saw sales growth and an improved operating margin for the second quarter ended July 31, fueled largely by its performance in China.
The company’s total sales in the Americas region were lackluster, increasing 2% to $444 million in the second quarter. Comparable-store sales remained flat for the quarter.
Meanwhile, the company reported total sales of $208 million for the quarter in the Asia-Pacific region — a surge of 20% compared to the year-ago quarter. On a constant-exchange-rate basis, total sales also rose 20% and comparable store sales increased 13%, led by especially strong sales growth in Greater China.
In Japan, the negative translation effect from a substantially weaker yen caused total sales to decline 14% to $136 million for the quarter. However, on a constant-exchange-rate basis, total sales increased 7% in the second quarter due to comparable store sales growth of 8% with strong growth in engagement and higher-end jewelry categories.
“Total sales growth met our objective due to solid performance in most regions, and with particular strength in our statement and fine jewelry product categories,” said Michael J. Kowalski, chairman and CEO. “We were pleased with the results of our efforts to improve gross margin which, combined with well-controlled expenses, yielded a solid increase in operating margin.”
Total sales in Europe rose 11% to $111 million for the quarter. On a constant-exchange-rate basis, total sales rose 10% and comparable store sales rose 7%, due to sales growth in the United Kingdom and most of continental Europe.
Other sales increased 33% to $26 million for the quarter, primarily reflecting the conversion in July 2012 of five Tiffany & Co. stores in the United Arab Emirates from independently operated to company-operated.
As a result of better-than-expected earnings in the quarter, management increased its full year forecast to a range of $3.50-$3.60 per diluted share, compared with $3.43-$3.53 per diluted share in its previous outlook and $3.25 per diluted share in 2012.
Tiffany opened a store in Hong Kong, one in Verona, Italy and one in Villahermosa, Mexico, and closed one in Tokyo, Japan. The company operates 277 stores (116 in the Americas, 67 in Asia-Pacific, 54 in Japan, 35 in Europe and 5 in the U.A.E.).