Direct-to-Customer Commerce

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Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

9 Steps to Multichannel Commerce

This is a slide deck, which I produced and uploaded to slideshare.net.  Click here.

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The seventh step to multichannel commerce

We’re getting there, slowly but surely.

This is the step where everyone wants to start … it’s time to set up a web site.

Some of my consulting colleagues have reported there are over 900 ecommerce platforms, from which a merchant can select, upon which they can build an ecommerce store.  The variables seem to go on forever … but don’t forget the previous six steps we’ve outlined.  Those are the non-negotiables (or at least, should be).

After those, nearly everything may negotiable.  Merchants all think their business is unique and needs features or capabilities which other merchants don’t need.  Or they need some feature tweaked.  The only thing I would remind you of is that changes, tweaks and new/modified features cost money.  So, before you go requiring lots of customizing, make sure the customization you need will actually make more money for you than taking the feature, the way it comes.

Consultants love to help clients customize things … often makes them more money.  But many, if not nearly every, merchant asks for things that do not increase sales and may even increase cost or have other negative impacts.

There is a lot to be said for finding an ecommerce platform that has:

  • experience in your industry
  • experience with your other applications, such as Product Master, Inventory, OMS, WMS
  • uses a technology your staff is already familiar with, so you can make minor changes and fixes, yourself
  • an effective user interface, which merchandisers, customer service reps and others can be quickly trained on
  • a plan to stay up-to-date on marketing and technology improvements
  • already supports your current marketing activities
  • supports your current payment processors
  • a good cultural fit with your present staff

When you select your ecommerce platform, you must include every department in the decision.  Don’t let the technology people drive the decision without major input from merchandising, customer service, finance, operations.  It’s very expensive to change ecommerce horses … and the technology itself is not always the most important consideration.

It’s about people and process … the technology is actually less expensive to change.

Then again, take advantage of the technology to improve your processes and perhaps lower your labor costs.

Filed under: Direct Commerce, Ideas, multichannel commerce, Opinion, , , , , , , , , , , ,

The fourth step to multichannel commerce

Step 1 = a single, unified product master

Step 2 = a cross-platform, multi-channel order management system

Step 3 = a single view of inventory, updated in near-real-time.

Step 4 = a warehouse management system capable of item-unit-picking and parcel shipping (fulfillment processing)

More and more warehouse operators are coming to an appreciation of the differences between shipping to stores and shipping to consumer.  For those who don’t, the most typical problem is that both processes use similar terms, but the definition of the term varies with the environment within which you’re working.

Picking for a shipment to a store, is often at the case level.  Picking for a consumer is almost always at the unit level.  A case contains multiple units of a single item.  Pallets contain multiple cases, which may be of a single unit or mixed units — but all in cases.

Fulfillment of consumer orders usually requires:

  • more complicated picking instructions
  • variable picking strategies
  • more difficult packing (read “slower”)
  • slotting optimization (to reduce picker travel time)
  • more sensitive cut-offs for picking orders
  • coordination with multiple parcel carriers (USPS, UPS, FedEx, DHL and others) for pick ups based upon class of service (ground or expedited)
  • near-real-time updating of order status and inventory status

These are just the highlights … the actual list goes on much longer.  I’m only trying to highlight the differences between retail fulfillment and consumer fulfillment.

More and more Warehouse Management Systems (WMS) are capable of handling both retail and consumer fulfillment.  So, the more difficult matter is personnel management and scheduling.  In a typical retail operation, staff peaks in August-September for shipping Christmas inventory to stores.  And the staff increase is 20-30 percent over base levels.

However, for consumer fulfillment the increase in staff may reach 200-500 percent and run from early November thru mid- to late-December.  This dramatic increase puts a premium on the ability of Human Resources to hire quickly and well; plus the ability to train new people on any specialized tasks.

Filed under: Ideas, Opinion, , , , , , , , , , , , , ,

The third step to multichannel commerce

Step 1 = a single, unified product master

Step 2 = a cross-platform, multi-channel order management system

Step 3 = a single view of inventory, updated in near-real-time.

This really is a tall order, because, unless you’ve bought into a major software solution, which has this capability built-in, it’s a pretty complicated process.  You have to set up numerous rules about inventory allocation, updating various channels (do you treat all channels the same or do some channels get priority over other channels).

Many merchants find it difficult (if not counter productive) to try to sell the “last available unit” on a web site, but will sell it from a store or the call center.  However, optimal inventory utilization calls for making inventory available where demand is … so you have to find the right balance for your business.  And it may take you time to get comfortable with all of the implications of this problem.

If you can sell any unit thru any channel, you’re most likely to get the highest value for that unit.  And that is likely one of your objectives.

However — and this bears repeating — synchronizing inventory across multiple channels (especially, if it includes brick & mortar stores) is a tall order.  High five to you, if you’ve put this in place.

Filed under: Ideas, Opinion, , , ,

The second step to multichannel commerce

Step one = a single, unified product master

Now, step two — a cross platform, cross-channel order management system [OMS].  By this, I mean an order management system which can support transactions and customer service in one or more physical stores, in a call center, at a web site, or on a mobile site.

This is a tall order.  And of course, it’s relevant, only if you really use all of these transaction channels.  Maybe you have one I missed — the point is that your order management system should support transactions in every channel thru which you sell.  That should include Amazon or eBay or any other ancillary channel.

This single OMS enables you to have a single view of your customer and allows you to fix in transaction in any channel in any other channel.  That is what your customers are beginning to expect.

Can you transaction on an iPad or iPhone?

Can your customers check themselves out (self-check-out at the grocery store, or self-check-out at Apple Stores)?  Walmart announced they are testing self-check-out on iPhones.  Where do you stand?

The principle here is that customers should be able to transact with you in a manner that suits them, rather than in a manner that suits you.

Filed under: Direct Commerce, Ideas, News, Opinion, , , , , , , , , , ,

Developing a uniform Brand experience across multi-channel

There are two sides to this question — and most see it as a marketing issue.  And certainly it has serious marketing implications.  But the Brand experience is not built entirely upon how merchandise is presented or described.  A huge portion of the Brand experience is based upon customer interactions.

Almost intuitively, we know that we must provide appropriate value to the customer (the combination of price and quality).  However, in addition, we need to treat customers in a way that matches their expectations of the Brand.

And there is a problem with customer interactions across different channels.  After all, it makes somewhat obvious sense that it’s difficult to interact with a customer the same way in a face-to-face scenario, compared to a call center scenario, compared to an ecommerce scenario.

But a truly uniform Brand experience in a multi-channel environment seems to demand more similarity than differences in the nature of those diverse interactions.

So, how do you do it>

I can only suggest a strategy:  deploy a single order management system across all channels.

Boy, that seems simple.  Conceptually, of course, it is pretty simple.  But it’s also deceptively simple and, in reality, very difficult.  And the difficulty is not in the technology, but rather in the management.  It’s likely you will also want a single warehouse management system, as well.  But that’s not as essential, because it’s possible to move inventory & product data between multiple systems and a single OMS.

But the central obstacle to accomplishing this goal is willingness of different internal departments collaborating on a single solution.

In a sense, this is another form of channel conflict — but it’s at the operational level, rather than at the sales level.

To execute this solution, retail operations, customer contact center operations and ecommerce operations must agree on a single OMS to capture sales orders and manage customer transactions at all points of sale — regardless of channel.

Then all these units must collaborate to develop uniform training for staff, based upon uniform company policies.

It’s Change Management 101 — something that almost always gets short shrift.  And, although I don’t mean it personally, it is often the fault of marketing / sales, because they are too anxious to build sales rather than build an enduringly satisfied customer.

Often, only the CEO can solve this, with the patient understanding of the board and shareholders.

Not so simple after all, is it.

Filed under: Direct Commerce, Ideas, Opinion, , , , , , ,

Systemax exits hosted e-commerce software business

There is probably a lot behind this story in DM News.  But ultimately, it’s a failure in execution.  Compounded in my view, by a mismatch between the vision of the company and the vision of it’s prospective clients.

Fortunately, there are still a lot of good solutions in the marketplace — perhaps not integrated to the breadth that PCS promised, but still good solutions.

Filed under: Direct Commerce, News, , ,

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