The retail industry has been aggressive in their e-commerce efforts and reaching customers on multiple touch points, both online and in the brick and mortar locations. But as consumers increasingly demand the ability to use all channels, be it in-store with a customer service rep, online, through mobile, on TV or in a catalog, retail can use omni-channel strategies to realize the full potential of digital both online and off. Where are we in enabling this seamless experience such that retailers can achieve this transformation? What innovative steps have been taken thus far, and what results have we seen that would justify an ongoing investment?

Contributor

• • Adam Silverman, Principal Analyst, Forrester(Omni-Channel)

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Transcript

Sanjog Aul [00:00:00]:
Very good morning and welcome to CIO Talk Radio. To learn more about the show, please visit www.ciotalkradio.com and as always, we invite you to join the discussion on Twitter #CTRlive and look for this show as #Omnichannel or #Mobility. Today’s topic is enabling Enabling Omni Channel Retail Innovation and our guest for today’s show is Adam Silverman, who is the Principal Analyst, Forrester(Omni-Channel). Good morning, Adam. How are you?

Adam Silverman [00:00:29]:
I’m fine. Good morning to you as well.

Sanjog Aul [00:00:32]:
And life is doing good. I’m sure that it’s pretty early for you there in the west coast and you’re getting started.

Adam Silverman [00:00:39]:
Yes, life is great. Lots of activity in this space. So happy to be here talking with you about the Omnichannel and the future of retail.

Sanjog Aul [00:00:47]:
Great. Now, we always have seen that the legacy retail industry has actually adopted quite well to the digital age, save for a few examples of sectors being completely disrupted by new business models and yet changes are still coming so quickly and we wanted to explore what solutions there are for retailers to still innovate in this new era. With that said, the first question Adam, I’d like to pose here is that we are actually living in a changed world for retailers and they are also trying a lot of things to always stay competitive and relevant. Do you think there is something special that’s going on which is triggering this Omnichannel related exploration that they should go this route and this is complex and it’ll take a lot of investment. What is causing this? What’s the trigger and business driver?

Adam Silverman [00:01:42]:
Well, I think that’s, you’re really speaking to the heart of the challenge and opportunity here. As retailers have evolved and as new technology has come on board primarily with mobile technology, retailers are finding that their channeled vision, or their channeled silos, if you will, over the past 10 years no longer work in terms of meeting client or customer expectations and so there’s two things that are really happening. One is that consumers are expecting more from retailers. They are now enabled with the mobile devices and stores. They’re able to access information pretty much at will and they have endless files and so they expect more from retailers and at the same time, retailers are welcoming in new technologies and new capabilities that allow them to grow and expand their business.

Adam Silverman [00:02:35]:
So for instance, if you look at commerce technology, what we used to call E commerce can now be called commerce technology or commerce suites and we’re finding that more and more retailers are leveraging this digital commerce technology across the entire organization and so what that looks like is the breaking down of silos within retail organizations and moving more towards a customer centric approach. What we call at Forrester here the age of the customer and that view is fundamentally changing how businesses invest in technology, how they organize themselves internally. So there’s a massive amount of change happening internally within organizations, within their org structure themselves and then also how they measure success. Again. Just a few years ago we were looking at success measured with solely based on ROI, especially in digital channels.

Adam Silverman [00:03:31]:
and now that that’s changed, customers now move from device to device. It’s much harder to track an individual customer in the digital space and therefore retailers are moving towards different measures of success which can include customer satisfaction, customer engagement, as well as lifetime value.

Sanjog Aul [00:03:53]:
So you did mention about what the way the customer is changing and if you demanding ever more demanding, ever more fickle, ever more defecting customer because they really are in control. Yes, you could construe this as a race among different retailers but do you think any of these tactics which will allow you to feel good as a marketer or someone who is handling omnichannel in your organization or even for that matter, CIOs, any of these tactics could be short lived. So are we just going to be having a moving target all the time?

Adam Silverman [00:04:26]:
Well, I think there’s some truth to that and there are some tactics, even some maneuvers if you will, that might be temporary and for instance, I’m thinking about the role of the E Business leader or E Commerce leader moving into an omnichannel role and that role potentially could go away in the future and there could be a chief digital officer that’s overarching the entire organization. So that omnichannel role might be, excuse me, might be transient. However, in my opinion and I would say for the opinion of most of my colleagues here, this move to be more customer centric is not a new concept. I mean this has been happening since the dawn of commerce and the fact is that over the past 15 years with E Commerce and the highly trackable nature of digital commerce and we’ve sort of fallen in love with the ability to track at a very granular level in terms of ROI, by channel or by program and so what I think will stay is this renewed investment in the customer.

Adam Silverman [00:05:34]:
and again, the devices that consumers have are endless. They’re only going to grow and so the tactics that are used to communicate to customers over different channels might change but the customer centric view I think is very much an area that retailers are focusing on today and I will actually turn this conversation a little bit more on the technology side and speaking in the same way, although the future is unclear in terms of devices and methods of communication and again, to your point of that moving target, where retailers are focusing their time today is on enabling the technology to facilitate any communication in the future. So they’re decoupling their systems and their silos. They’re moving E Commerce to be a commerce suite.

Adam Silverman [00:06:27]:
They’re creating these loosely coupled enterprise layers that are basically detached from the experience and detached from the channel and that’s and that is really the investment in that platform that’s happening today to enable that future. Where again, to your point, it might be elusive as to what the customers want and what devices they communicate on. So I think there’s a little bit of both. There are some transient areas, but certainly the focus on the customer is absolutely, in my opinion, the right move.

Sanjog Aul [00:07:00]:
What in your view, based on all the different surveys and polls and focus groups that may have been conducted across multiple retail organizations as well as the customer segments, what’s a common set of sentiments which is driving. What are they really looking for today? and how do you extrapolate that to know what people are going to look for tomorrow? because everything else that you are doing with respect to Omnichannel and other retail creativity and strategy, it is all going to be dependent on how clear of a view, how big of a clairvoyant this, whole community becomes with respect to what a customer of today and tomorrow would want to.

Adam Silverman [00:07:41]:
That’s true. Our data shows that customers at this point in time are looking for utility. They’re looking for the ability to find a product. They’re looking for the ability to fulfill their demands and that’s really manifesting in terms of an Omni Channel today. I would say the greatest success is around fulfillment and inventory visibility across the enterprise. So let’s say you’re in a store and you see a site small and a but you’re a size medium. Retailers are now enabling the ability for associates to fill in that missing item within the store from any option within the enterprise.

Adam Silverman [00:08:25]:
and the same thing on the E commerce side. So traditionally they’ve had separate distribution centers and separate inventory and if you’re out of inventory within that specific product, you couldn’t get it and so now retailers are enabling their stores to be fulfillment centers and so that does a lot of things in regards to improving margin. No longer is there, I should say breakage is less. You don’t have to put things on markdown as often because you have complete sets across the enterprise and also satisfaction in terms of quicker shipping. So for products being shipped from a local store rather than a distribution center in the middle of the country and if you live on a coast, you actually might get that product faster.

Adam Silverman [00:09:06]:
So we’re seeing a lot of the customer needs centered around finding specific products that they already have in mind. It’s less around discovery. So that’s where we see it. That’s where today is now. We also have data that shows that customers are willing to try new technologies and new capabilities in terms of engagements, whether it’s through digital displays or some in store technology, or even around social and just leveraging different techniques and technology in order to discover new products and become aware of new products and so that is the future of Omni Channel is leveraging all of the data from the entire organization and making that available to each customer wherever they are. So whether it’s in a store on a mobile device or on a website and that’s really. There’s some knowns there,

Adam Silverman [00:10:05]:
for instance, I think it’s pretty clear that customers would like to see product reviews whether it’s in store, online or in mobile but it’s unclear if they will truly resonate with techniques such as magic mirrors or shopping with friends in store. Virtually some of those might be incremental benefits, but I don’t know that they’re game changers. So I would say that from the experience perspective of creating new experiences, Omni Channel may or may not be the solution. From a fulfillment perspective, from meeting Ms. Demand, from inventory visibility, huge wins there and that’s where the majority of the dollars are going for capex.

Adam Silverman [00:10:49]:
but in regards to the experience piece, I think the jury’s still out.

Sanjog Aul [00:10:53]:
So if you were to divvy up a budget of a retail organization which is putting things in omnichannel. So sure there is people, process and technology side. Where do you think the most need is and where essentially the most investment is going.

Adam Silverman [00:11:09]:
So that is a clear answer. The need is around the technology. In terms of capex and investment, I think there is equal needs regarding people in process, but I think those are solved in a different way and so when I think about retail and I think about these legacy systems that retailers have been using for years, trying to hook those up in a meaningful way to create an omnichannel experience, whether that’s just fulfilling this demand and having visibility of inventory or whether it’s hooking up a CRM system across associates in a store as well as online. The connection of those technology layers is complex. So you’re seeing a lot of movement within the e-commerce space. You see SAP acquiring Hybris. A few years ago, oracle purchased atg,

Adam Silverman [00:12:04]:
and so some of these larger enterprise software suites are now looking to augment their legacy systems with new digital capabilities. Now that is sort of a vision. I wouldn’t say that. I mean they’re not there today, meaning SAP certainly has an integrated Hybris and Oracle’s still in the works of hooking everything together to create a single vision and solution for retailers but that is where the majority of the investment is happening and by the way, that doesn’t necessarily mean that you must understand exactly what will happen in the future. So creating these loosely coupled systems in a service oriented architecture enables for flexibility. It’s something that we call Agile Commerce

Adam Silverman [00:12:54]:
and Agile-commerce is really the blend of omnichannel with agility and so these systems are being set up in order to facilitate the agility. Now the people piece, I would sort of, let me just bulk, I guess people in process. Retailers are still kind of stuck in old ways. They’re still have silos. It’s still hard to get budgets for these omnichannel initiatives. It’s not something that’s just ingrained in us as retailers and so there’s evolution in terms of the thinking and for the most part we’re seeing the C suite, especially the CEO playing a greater role within these omnichannel decisions because it really needs to be top down.

Adam Silverman [00:13:41]:
That vision, that org structure and that purpose for being as an organization is evolving and you’re seeing pretty dramatic changes. For instance, we’re seeing some organizations create structure around the customer journey right in terms of their life cycle rather than channels and that’s, kind of arduous. That can be painful. Measurement of success is very important in order to enable success there and so that is an area that is in flux right now and so although.

Sanjog Aul [00:14:14]:
So let’s do this. Adam, let’s take a quick break and listeners will be right back. Adam is actually definitely explaining what are the different aspects where the investment should be and what are the organizations doing. Great discussion. Please stay tuned. We’ll be right back.

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Speaker E [00:15:55]:
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Sanjog Aul [00:16:29]:
Welcome back. So take it away Adam.

Adam Silverman [00:16:31]:
Great. We were just talking about the technology piece in terms of the investments and here at forrester we have a few elements of two indicators that sort of tell us this is a hot topic. One we’re seeing greater, I don’t know, I guess involvement from our E-business partners around technology. We’re seeing increased what we call inquiry calls, which is where they are calling us to answer specific questions but we also have lots of primary data as well that supports this piece and in a recent survey I was just pulling up some data here. When asked what technology investment parties are most important for the coming year, there actually is a tie between E-commerce platforms and multi channel integration and the reason why they’re both at the top is because for E-commerce that’s really the growth engine.

Adam Silverman [00:17:24]:
This digital commerce piece is really driving retail successes over the past bunch of years and it’s been some time and that still continues to grow. It’s still a smaller piece on the overall pie. We see by 2016 E-commerce only being on aggregate 10% of overall sales but it’s certainly the growth engine and then again in my perspective, if you stripe out that, you have the commerce platform, we do believe that these commerce platforms will be ubiquitous at the enterprise level and power even store pieces but that multichannel integration, again just as high as fueling E-Commerce growth. This multichannel integration at 52% is and that’s again priority.

Adam Silverman [00:18:09]:
52% of retailers say that that’s a priority that is really tied towards the technology needed in order to fill Ms. Demand, whether it’s in store or online.

Sanjog Aul [00:18:22]:
So you definitely mentioned different aspects where the technology could be utilized and there are retail organizations. So would you think that the person at the top, as you mentioned, the whole change will be driven top down? and so do you think CEOs are going to say show me the capability or else take this money and build that capability? Are there cheaper, faster, better ways to achieve capability versus ripping apart your technology which may be there and it is going to keep the business going while you experiment? Because do you think this is like a sure shot deal where we don’t have to really look back or is this more of an experiment to invest in all possible channels, calling it omni channel and then we are going to see the positive ROI and everybody’s on board.

Adam Silverman [00:19:10]:
I first of all, I think the term omni channel is an odd one because we’re talking about touch points, not channels and it’s really a manifestation of this multi channel discussion that started five or ten years ago when customers wanted to buy online and return in store and so omnichannel is probably not the right word and so I think and there’s a lot of fluff and buzz around the topic as well and so what we’re trying to do is try to sort of strip away the really tangible pieces where investment should occur and then also look at some of the experiential pieces and potentially plant some seeds and see if they grow. So when it comes to the enterprise layer, the jury’s in on this one. Retailers are doubling down.

Adam Silverman [00:20:02]:
They’re focusing on building an infrastructure that looks different. It’s no longer in silos, it’s connected at an enterprise level to give a singular view of customers, a singular view of product and by the way, there’s associate facing pieces as well and so enabling the associates to be empowered. I mean you can imagine going into a store with your mobile device and looking up a product and geeking out and looking at product information from various retailers. Meanwhile, the store’s associate is not enabled to do that. So you have today an environment where the customers are in some cases leading the innovation and retailers are actually a step behind.

Adam Silverman [00:20:48]:
and that we can all sort of agree is probably not a good thing and so even if you look at the store, that what we call the digital store or the future store wifi connectivity is not ubiquitous and it needs to be, there’s still a bunch of hurdles in terms of that infrastructure and so if somebody asked me, should I invest in wifi in the store, both for guests and for associates, I would give it 100%, 110%. There’s really no reason why you shouldn’t have it and I’d say the reasons for having it. There’s great ROI in going after connected customer and associate within the store. So from a technology perspective, from that enterprise platform layer, yes, they are ripping apart the systems.

Adam Silverman [00:21:33]:
I’m going to give you one other example. Let’s talk about point of sale. These are hardened legacy systems, often with long contracts and as those contracts renew, retailers stop and think, now do we need to just go with the same old point of sale or what we call point of service vendor or can we, or is there a new version of this that’s coming out there? Why can’t I use my commerce suite to power transactions in store? and so you’re seeing disruption in some of those legacy systems. So the you might rip out your old legacy point of service software hardware, your in store servers and you might move that to the cloud in the future. We’re not there just yet because again we’re talking about hardened systems that can’t go down and I think that the digital commerce players are still kind of focusing on creating a hardened system, one that will satisfy the needs of store operation leaders and CIOs but you can see that being a logical area that is ripe for disruption from technology.

Adam Silverman [00:22:36]:
So now then, let’s talk about sort of the buzz stuff, the experiential pieces and this is where again I’m going to point back to our work regarding agile-commerce, which is our term for what I’m saying is a blend of omni channel with agility in terms of your structure and so I am in favor of point solutions that focus on some of these areas in a trial perspective in order to prove that business case. So we see retailers and I would say also within this new omni channel role, you’re seeing a lot of those innovation areas move over into that group and you’re seeing the C suite carve out budget for those types of innovations, whether it’s in store mapping or client telling or even product builders and configurators or digital signage. When there’s a myriad of things that retailers are working on, the jury’s still out on whether or not those should garner high budget and so you’re seeing a lot of solutions, a lot of point solutions out there that are going after those kind of niche areas and then you can imagine if you have this loosely coupled enterprise architecture, if one of those point systems turns out to be effective through web services, it becomes a lot easier to plug them in and through APIs. So you start to have an ecosystem where you can plug and play different pieces and be agile but again, you still need that platform, you need that services, you need APIs and you need all that talking well together in order to enable this future organization that has to be nimble.

Adam Silverman [00:24:19]:
So I guess to answer your question, I think it’s both. I think yes, we’re ripping out these systems. We’re making big bets on technology and in fact, our technology partners, when they brief us, they mentioned that they’re seeing more sales are going towards these transformational technology sales than in the past. So we’re seeing proof of that. So again, that’s happening but again, these point solutions certainly have a place within the organization and there’s really a little bit of both now.

Sanjog Aul [00:24:47]:
One area when we talk about the process and the way we would do innovation or bring about innovation would be perhaps based on data or analytics and or gut. Where we are going, we do not have much data for the future and in the recent past only we have created vehicles where the customers can actually touch an organization and then consume their goods and services through multiple channels. So where is that decision making happening or how is that decision making happening? Because if we are just going to go and say we are going to collect a lot of data and then we introduce big data and other things, then we are leaving that gut factor which made companies in the past sustainable and successful but when we. Before we get into this question, let’s take a quick break, listeners. We’ll be right back.

Speaker E [00:25:42]:
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Speaker C [00:25:52]:
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Speaker D [00:26:19]:
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Speaker D [00:27:14]:
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Speaker E [00:27:17]:
you are listening to CIO talk radio with son Joe. To learn more about the show, please visit www.ciotalkradio.com. if you have a question or comment, call toll free at 1-866-472-5790. That number again is 1-866-472-5710. Now back to the show. Here’s Sun. Joe Galt.

Sanjog Aul [00:27:42]:
Welcome back. So when we are talking about all the different technology investments and we spoke about processes, we’d like to touch upon the data and how you’ll make decisions. Is it going to be gut analytics one or more of the other? and if we are going to do all of those, either of those two, would innovation take a backseat because we are too busy crunching numbers?

Adam Silverman [00:28:06]:
Well, it’s a great question. It’s probably one of my favorite questions. I come from before I was an analyst, I was a retail executive. I led e-commerce organizations and marketing organizations for both small and large retailers and so I have a direct marketing background. So I’m very much a fan of data. I don’t know that there is room for making decisions purely on gut. I Think you can have a hypothesis and go after something and that’s innovation piece you’re talking about

Adam Silverman [00:28:40]:
but measuring success is really important and having that up front is really important too and so when I think about the Omnichannel initiatives, the ones that are successful today have clearly defined goals and they are then measured against those goals. I do believe that there is some execution that’s occurring in a sort of pure innovation state without actually thinking about setting up those goals up front and to me, that leads to very poor execution and then ultimately the demise of that initiative. So let me give you an example. I recently visited a very large retailer, an office supply retailer, who touted an innovation store that’s one of their true innovation stores and so I made a sort of a surprise visit and sort of what analysts do, we go and we investigate and I found the experience to.

Adam Silverman [00:29:42]:
Well, let me just sort of say what the pitch was that they’re enabling online-commerce within the store. So that sounds great. That sort of, on the surface sounds fine. However, when you actually go to use that kind of service. For instance, I was trying to purchase some office supplies and I went to one of the kiosks in the store. I went through the process of purchasing it and I selected that I want to pick those items up in the store. Well, this retailer decided to ship me the office supplies from their distribution center rather than simply pointing me two steps to my left to pick up those supplies.

Adam Silverman [00:30:22]:
So the buzz of sort of digitally enabling your stores and allowing online-commerce within the store sound good but without measurement of success and without having those analytics that are customer centric and not channel centric, you missed the mark and so that was a massive myth, in my opinion. Again, we’re not talking about a small organization here. So the sort of siren song of some of these omnichannel capabilities are tantalizing and so I think you sort of go after that shiny object. So let’s sort of get back to the measurement of success piece.

Adam Silverman [00:31:05]:
That is certainly an area that needs greater focus and in my opinion, in my research, from talking with retailers, they’d like to see more of that measurement of success up front. So I would strip out gut from the decision making and have it purely based on analytics. However, you also need to be disciplined and invest in innovation. So the best retailers that are succeeding in Omnichannel have a dedicated innovation budget and we still need to make decisions based upon where that money goes in Terms of what initiatives but measurement of success looks a little different.

Adam Silverman [00:31:46]:
It’s less about ROI and more about customer satisfaction or lifetime value and in my opinion, the view of success for some of these omnichannel initiatives is much longer. Than the kind of old school E commerce How its sales this second or this minute or we made a change on the website and therefore we saw a 10% improvement in conversion rate. So I think measurement of success is changing now. So there is a lot of sort of an adjacent topic is this data piece. So obviously the digital technologies allow you to collect more data and so you can choose to measure success in different ways with that data

Adam Silverman [00:32:30]:
but that data is also powering new initiatives such as mobile and there’s a whole stream of mobile innovation that’s occurring that in the future will leverage massive amounts of data in order to really drive some relevant experiences both in store, online, at the bus stop, wherever you are.

Sanjog Aul [00:32:53]:
So when you, when you do mention about mobile and that just one of the channels, do you think that’s where the whole retail is going to move? and yes, we still want to go and touch, feel a T-shirt or any other item. Do you think we are going to really say, I would want to come in there just as a place where I could see this place and then rest of it I could be walking around in store or out of store and you guys just deliver to me and things like that? because right now we are kind of confused between should I chase more people to attract them to a store, four items where we need to touch and feel the fabric or like a shoe for example and then there are others who would want to say that there’s no point in using the real estate, increasing your fixed costs. Might as well just create an online store which can be very easily accessible through a mobile phone and, or a desktop and let us just kind of stay there. We’ve seen successes in both. So I’m not sure what’s missing or what’s ahead that people are preparing for.

Adam Silverman [00:33:53]:
Well, so the answer to that question is really what the customer wants? Today I might want to go into the store and touch and feel something and have that experience and engage with associates. Tomorrow I might want to refill my order at the bus stop and I don’t really need to engage with the product. So it’s complex and it’s really customer, it’s really customer driven. So I would caution on treating mobile as a channel and I would also caution on treating mobile as something that’s Just retail focused mobile is going to, I mean it’s just a part of us, it’s an extension of who we are, it’s an extension of our social network and it’s really transforming all industries. I mean I’m sure it’s happened to all of us where you leave your mobile device at home and you forget it on the counter and throughout the day you have this level of anxiety because you don’t have that ability to connect and so mobile is really transforming a bunch of things. Here’s an example regarding mobile point of service. So in a couple of weeks I’m having a bit of research come out regarding it’s a market overview for mobile point of service and one of the elements in that is retailers originally implemented mobile point of service as a way to enhance the experience.

Adam Silverman [00:35:16]:
However, they didn’t necessarily see a greater lift in engagement because they simply had a device. What they did see though was greater efficiency within the store. So the ability to move mobile devices from store to store based upon seasonality or whether it’s these specific parts of the country and weather patterns or holiday seasons. Deploying mobile point of service is an easy way to get new registers out there and so from an efficiency perspective there is a good amount of ROI there. So it’s not always about the experience and I bring that up because there’s an example and we talk about mobile being very customer centric and focused on the customer but the reality is it’s just an amazing tool for associates as well and so I’m sure there’s every organization and every business could benefit from that mobile from mobile evolution

Adam Silverman [00:36:12]:
and then you mentioned something too about moving customers to the store. I don’t know that I would treat mobile and digital as a way to just fuel store sales. I mean our data does show, our forecast data does show that by 2017 m commerce is still just a smidge. Overall digital commerce is roughly, I’m just roughly 10% and the majority of sales still occur within in the store. However, this digitally influenced revenue piece is much higher, it’s much closer to 50% and so it’s not necessarily about moving someone from channel to channel, it’s about engaging with them wherever they are and mobile unleashes new things. You could be at the grocery store and you can, let’s say if you’re diabetic you can use your mobile device to give you context as to what’s appropriate. You can be at a bus stop with a digital display and proximity marketing can take effect.

Adam Silverman [00:37:10]:
and that digital display can change based upon your preferences or products you viewed. So it’s really a game changer when it comes to how customers engage with retail brands and by the way, it makes retail brands portable. I mean this concept of the portability of your brand is very much going to happen and it doesn’t really matter the channel. What really matters is that customer touch.

Sanjog Aul [00:37:37]:
So if you were to compare the retailers or click and Motors or E tailers, I mean there are three different levels of three flavors, if you will, that exist in the retail world. How is omnichannel any different for any of those or is it manifested or implemented any of those?

Adam Silverman [00:37:57]:
I guess there’s two parts of this. One is, there really a difference? I don’t know that there is a difference from a customer perspective. They sort of don’t care. They, you can put manufacturers in that bucket as well. They have a specific need. They don’t care. If they don’t think about channels.

Adam Silverman [00:38:14]:
It might be more around convenience. I prefer to buy online because I live in a rural area and there’s no stores nearby or I’m an analyst and I’m so busy that I have no time to go shopping and therefore I prefer all my orders to come online or I’m, I have a lot of free time and I like to go and have that in store experience. Experience. So I think it really, it’s customer centric versus channel centric. I don’t know that customers will think about or even think about today about channels and that’s, I think retailers need to move away from that concept. That’s why I don’t really like the term omnichannel but we’re using it today because that’s sort of what’s the common jargon, if you will, for this, for this concept

Adam Silverman [00:38:55]:
but there are differences and the retail stores, the physical stores have an advantage and shackle around their ankle. The advantage is obviously that physical experience, that’s something that you can’t replicate online. The shackle is just layers and layers of legacy technology that is again hardened systems that need to be cracked open and exposed and that is painful. That’s expensive. Expensive. That requires a commitment, a long term view of success

Adam Silverman [00:39:31]:
and that is we’re seeing the most activity, as I mentioned earlier in that area. If I were a retailer today, I mean if you look at some of the new retailers, Warby Parker is a great example. Bonobos is another. They’re opening up a handful of stores, not necessarily yet to grow sales, which used to be the how retailers would do it, they’d open up X number of stores and sales would sort of follow that and you can scale up your business that way. It’s expensive but these sort of innovative retailers are opening up stores to do things like data collection, to have a brand experience, to understand the appropriate size of their customers so that they can then offer them fitted clothes online and so again, measurement of success is different for those retailers in the store and they’re using that physical channel in a different way

Adam Silverman [00:40:24]:
and I expect more retailers to do that and you see we see some of the big boxes going into smaller urban markets and they’re reducing their opex or reducing their footprint, but they’re extending the aisle with technology integration.

Sanjog Aul [00:40:38]:
So let’s take a quick break listeners. We’ll be right back and let’s look at the very undertaking which is quite a large investment in many cases in order to not only bring your own internal systems but actually get all your value chain players, yourself, supply chain partners and anyone else who together comes to deliver that seamless experience. So is this truly like a win win for all parties or There are some internal challenges in the way a retail outlet is able to deliver an omnichannel experience, but behind the scenes there is a firefighting going on and if yes, what type of challenges are there before people can really say we have aced this art to deliver omnichannel experience. Please stay tuned. We’ll be right back.

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Sanjog Aul [00:43:25]:
welcome back. So in terms of making any such mega innovation centric change happen, that is omnichannel delivery, you got to have quite a few moving parts behind the scenes and not only within your company, but even outside. So is there true harmony there or there is chaos and we are somehow able to wrap it and show that yes, we have everything under control. What’s going on behind the scenes?

Adam Silverman [00:43:51]:
A bit of chaos. It’s not there’s no true harmony today and I would say from working in the retail business, is there ever true harmony. There’s always things that can be done better. There’s always complexity. I worked at a very large big box retailer and a few years ago and they had buying teams for both online and their stores and so as a manufacturer or as a supplier of those products, you’re dealing with two different buyers, you’re dealing with two different organizations pricing and so you have these very separate worlds, a very channel specific world. Well, we’re breaking down those barriers and the customer doesn’t care again about channel.

Adam Silverman [00:44:34]:
So we’re breaking that down and internally those organizations are changing and then therefore sort of downwind, the manufacturers into suppliers are having to change as well and so even technology around product information management systems and hooking those systems up to all channels is key and you can imagine in the past if you were a manufacturer selling into storage, you didn’t have to have robust metadata or product attributes, that digital enablement wasn’t there but now you need to have that. Until manufacturers are stepping up to the plate and creating better content, they’re thinking about their role within Omni Channel and by the way, these customers, when they’re in the store and showrooming, they’re looking at manufacturers websites and so one way to prevent showrooming is for manufacturers to have rich product information that’s in line with the store associate and even powering some of the store messaging as well.

Adam Silverman [00:45:34]:
So there’s lots of changes happening there. Now let’s see, talk about internally that you’re seeing in these decisions, in these technology purchases. You’re seeing more people at the table. What used to be it is now what we call here forester BT or business technology. The technologist is playing a more strategic role in the success of the business because the technology is enabling success. It’s not just about having a help desk and keeping computers up. It’s really about strategically thinking about the value proposition of the software that they’re buying and so you’re seeing more business, more technology leaders be at the desk in at the table with business decisions and helping out with those business decisions.

Adam Silverman [00:46:24]:
On the same vein, you’re seeing more marketers at the table, more the E commerce leader at the table when it comes to things like store systems, because those store systems such as mobile point of service have a connection with the customer and that customer experience and the E business leader, again, we talked about them moving more into this digital strategy role. They’re the ones that have been looking at conversion rate online for 15 years. They know conversion rate by department and now with some new technologies around in store measurements and analytics, they’re really the ones that have the expertise in terms of testing and measuring and turning that data into insight. So is there firefighting? There can be but you can see how in this sort of complex change that the CU suite, especially the CEO, really needs to set that tone and really needs to lead and for the most part they’re doing that. They’re playing a much bigger role in these conversations and shaping their organizations.

Sanjog Aul [00:47:20]:
One last question. Max 45 second or a minute. If you were to send retail and marketing and operations and IT people to the school to get most trained and in the best possible manner and also set appropriate expectations, what would those be in order for this to really deliver success? Sitting outside and watching what all is going on so far?

Adam Silverman [00:47:44]:
Think about customers, not channels. Think about measurement of success. Define that up front. Understand the technology, understand how it enables success. Those would be the three things that I would focus on and I would also say four is adjust your organization appropriately to be customer centric. So those are the four areas that I think would be the major takeaway and by the way, those four areas are pretty big projects.

Adam Silverman [00:48:12]:
I mean, we’re not talking about a single swift blow. We’re talking about an evolution and a processand for the most part retailers that are going to be relevant in the future are moving down this path.

Sanjog Aul [00:48:23]:
On behalf of the show and our listeners, I’d really like to thank you Adam for sharing your thoughts on what Omnichannel truly is, how it is being manifested, how the business, technology, operations and other value chain partners have to come together in order to make this a reality and actually get value out of it.

Adam Silverman [00:48:42]:
Great. Thanks Sanjog, I appreciate it.

Sanjog Aul [00:48:44]:
Thank you so much again Adam. Now listeners hope you enjoyed the conversation. Adam had some great insights on the subject and please like us on Facebook search for CIO talk radio and be sure to follow us on Twitter. Thank you again for listening to CIO Talk Radio. This is Sanjog Aul your talk show host till next week. Take care and God bless.