Omni-Channel Strategy vs. Tactics: The Difference between Planning and Doing
Last week was probably the height of spring conference season, and I had my hands full with two conferences: Epicor Insights, the software company's user conference, and Next Gen Retail, a business meeting/conference event, put on by GDS International (for the record, RSR was the content/analyst partner for that event). The two conferences couldn't be more unalike (I was the only attendee common to both conferences), and yet the topics of conversation seemed merely like a continuation of the same discussion from one event straight into the other - and it was all about omni-channel, with a particular focus on fulfillment.
Not the spiritual kind, mind you - not even at a company level. We're talking about the nitty gritty of making store-based fulfillment real. At Epicor's user conference there were zero questions about business case or rationale behind store fulfillment for the retailers who presented on the topic. All the questions were pointed and tactical - "how did you manage the incentives for stores?" and "when you take a store order for online merchandise, how do you handle the credit card transaction for something that hasn't shipped yet?" These were the questions of retailers at a minimum already designing a project, not trying to think through how to sell it internally.
At Next Gen Retail, the titles were a little more diverse - a lot more marketing people sitting next to store operations and IT, which was refreshing - and so the issues were a little more strategic. The concerns focused on store inventory practices and how to manage inventory levels against cross-channel demand, alongside fears that they weren't moving fast enough to counter-act Amazon's move towards same-day delivery. And lots of questions and worries about the impact on their pricing strategies that would result from greater cross-channel inventory visibility. Even though there were retailers in the room who had already made some moves around cross-channel fulfillment from stores, there were still a lot of questions focusing more on the "why" than the "how".
Mobile was also a hot topic across both events. If I could sum it up in one phrase, retailers' mobile strategies are all about empowering a store associate to deal with an informed consumer. And again, between the two conferences, there was a fascinating difference between strategy and tactics. At Next Gen Retail, leaders across functions worried about how to do it. At Epicor Insights, retailers shared what they learned from their existing deployments. And while the retailer brand propositions were different enough across the spectrum of brands represented by attendees, there was remarkably little focus on using consumer smartphones as a proxy for employee-provided services. In other words, while retailers want to figure out how to use consumer mobile to better engage shoppers in stores, this is a marketing exercise, not a store operations strategy - they have no desire to substitute consumers' phones for an engaging employee interaction. Which was also refreshing.
Across the board, whether luxury retailer or even grocer, retailers at both conferences expressed much more interest in employee-facing devices that are multi-functional - providing store associates with a way to meet informed consumers on level ground, but also being able to support both selling and transacting - and maybe even some operations functions along the way. Toward that end, retailers at both conferences also expressed a lot of interest in the iPad Mini, as well as the emerging "phablet" category of the convergence of phones with ever-larger screens and tablets with ever-smaller screens. Retailers seem to see this as a way to address both the front of store functions of assisted selling and mobile POS as well as enabling back of store functions like receiving and inventory functions. The idea is to keep it simple - provide one multi-function device that can be used by any associate for any function. Specialized devices are out, and the idea of a customer ever laying eyes on a traditional, clunky scanner gun - attendees literally shuddered at the thought.
The really interesting aspect of all of this is the intersection of the two - cross-channel fulfillment and mobile selling. Retailers seem to see these two as going hand-in-hand. Ironically, where the most doubt exists is around the infrastructure to support it. Oh, yes, there was some whining about the speed with which consumer technology evolves and that retailers can't seem to reliably plan on more than a three-year horizon for many of these devices. What was most startling to me was the continuing concern over WiFi - either for store employees (though this was less of a concern) or public facing WiFi to enable all of these interactions of which marketers dream.
Ironic, that at both conferences, whether retailers still dreamed of possible futures or were neck-deep in the realities of implementation, the whole strategy can still be derailed by security concerns over WiFi. Is that fair? If wireless security vendors are to be believed, it's not at all fair. So why are retailers still so afraid?