Delivering a ‘Zero Disappointment Experience’ in the age of innovation
Many retailers have been slow to embrace technology in their broader operations, technology that has already changed the retail landscape forever – namely by empowering shoppers who are now more tech savvy than the retailers who are trying to catch up. What today’s retailers need to provide is what we at Manhattan Associates refer to as a “Zero Disappointment Experience.” In other words, ensuring that your brand delivers the same experience to shoppers regardless of their choice of engagement.
Let’s face it, shoppers are more demanding than ever and loyalty can be fleeting. The situation requires retailers to become more intimate with their customers in order to satisfy there needs and wants. Yet, relatively few are prepared for the technology – and change in mindset – required to do so. There is so much trepidation surrounding large technology projects, and rightfully so given the past, but retailers that are willing to take small steps can achieve and deliver a Zero Disappointment Experience across all channels while learning how valuable operational optimization technology can be to the bottom line.
Those who have embraced technology to deliver a truly omnichannel experience to their customers have received accolades for their success, but most retailers view the technology required as too daunting, both financially and operationally. Many remember the massive undertaking and millions of dollars expended during the Enterprise Resource Planning era, which often took years before any results could be realized. These days, few retailers can afford that kind of time or investment. On the other hand, employing the right operational technology can successfully address one of the most pressing issues in retailing today, “out of stock,” which costs retailers $456 billion a year, according to IHL’s 2012 Inventory Distortion Study. Any way you look at it, retailers must change the way they operate to prosper.
For most retailers today, if a product is not in the DC, they tell their customer it’s out of stock, unaware that there may be product somewhere in their network. With no visibility to the entire supply chain, “out of stock” is their only answer. To make and keep promises to customers, however they choose to shop, retailers must have an aggregate view of inventory across all channels. Since each order may have completely different fulfillment requirements, it is essential to create the optimum fulfillment plan on an order-by-order basis. As we have moved to a market-of-one, personalizing orders, retailers know a clearer view of fulfillment options needs to be in their future. Retailers may understand they need more technology but the question keeps coming up, “Where do I start?”
In fact for the majority of retailers today, order fulfillment functions are siloed, independent systems, nothing connected, nothing talking to each other. By using the right order fulfillment technology in conjunction with a good web storefront application, the operation is optimized, running in real time and making decisions 26 times a second to arrive at the optimal fulfillment plan for each order. With full knowledge of the entire inventory the less-than-best answer, “It’s out of stock,” can become less and less frequent. So how do you get there in steps you can digest and can sell to your management?
The first step is understanding that optimizing your operation is a collaborative effort. This is your business and you know it best. The first milestone should be to develop an overall roadmap for the company that includes long- and short-term goals. This is only accomplished with honest discussions about not only the possibilities, but your company’s business priorities. What’s most important? Is buy online, pick up in store a burning need? Do you have cross-channel returns issues you need to tackle? The roadmap not only provides benchmarks to reach, but offers a reality check as to which systems stay and which systems need to go.
The best optimizing technology delivers wins all along the way. In six months, you get a win and real results to show the board. Then in another few months, another win, all employing agile methodology that allows adaptation and “small bites” of success as you reach measurable, definable targets, without waiting years to show any results. Working in small teams on shorter projects with lower risk and less up-front capital, benefits accrue early. In many cases, we’ve found that the earlier successes often pay for the next project’s success.
But whether taking “small steps” or embracing an entire technological make-over, retailers are learning they have no choice if they are to prosper in the new “omnichannel” world. Laying out a long-range plan is the first step.
Brian Kinsella is senior director of product management with Manhattan Associates, a leading provider of supply chain solutions and optimization products and services to companies worldwide. He can be reached at firstname.lastname@example.org or for more information visit www.manh.com.