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Cross_Channel_Retail
Reports | Business 2008-05-23 14:43:32
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    ?BREAKING NEW GROUND IN CROSS-CHANNEL RETAIL Creating Value through Cross-Channel Retailing An iCongo White Paper

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    BREAKING NEW GROUND IN CROSS-CHANNEL RETAIL Creating Value through Cross-Channel Retailing WHAT IS CROSS-CHANNEL RETAIL? Cross-channel retail is about delivering a consistent and seamless customer experience across multiple channels. It's about providing customers with similar products and services across all retail channels and offering enhanced customer service by leveraging customer information between channels. AMR Research (March 2008): Cross-channel shoppers spend up to 30% more with retailers than single-channel shoppers. Online spending is now a significant percentage, representing more than 20% of overall retail revenue by the end of 2008. Consumer expectations for seamless cross-channel shopping have increased in parallel. Retailers, however, are facing two major obstacles: a lack of cross-channel operational efficiencies and lingering technical shortfalls. THE ICONGO CROSS CHANNEL RETAIL PLATFORM Through the iCongo suite of cross-channel solutions, retailers are now redefining the customer experience, improving merchandising, overcoming inventory challenges, capturing lost opportunities, taking advantage of real-time demand information and achieving operational efficiencies never before possible. Such cross-channel solutions include next generation e-commerce systems which include in-store and online merchandising functionalities that capitalize on consumer demand preferences, the ability to order merchandise online and pick-up in-store, purchasing and utilizing gift cards and loyalty programs across any channel and launching marketing campaigns and promotions which can be used both online and offline in the stores. The platform includes cross-channel business intelligence and e-marketing systems, guided selling and endless aisle capabilities by accessing inventory across the retail chain and by generating online transactions from the store via the point-of-sale (POS), kiosk or handheld devices as well as order management allowing fulfillment from any designated location including store locations. By creating a seamless cross-channel environment, retailers are able to realize inventory optimization, achieve more effective assortment planning based on accurate cross-channel demand, create greater inventory turn across the chain, increase sales, improve profitability and experience higher levels of customer satisfaction. Through its comprehensive suite of 1

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    cross-channel retail systems, iCongo is helping retailers successfully deploy these leading ecommerce and cross-channel solutions. ONLINE STOREFRONT The ICE3? Business-to-Consumer E-Commerce Platform is an advanced, next generation enterprise commerce system designed for global retail organizations. The platform includes completely internationalized best-in-class e-commerce functionalities and allows retailers to manage multi-brand online retail stores and fully integrate these web properties into their cross-channel operations. ENDLESS AISLE No longer are customers limited to the product physically available within the four walls of the retail store. The iCongo Cross-Channel Retail Platform is enabling retailers to capture lost sales and further increase the overall satisfaction of the customer by creating an endless aisle environment within their stores. Instead of losing the sale because an item is not available in the store, shoppers can order from the store any products available within the chain through the online store, in-store kiosks, salesperson's handheld devices or directly through the POS. This is made possible by providing in-store sales personnel with the tools that provide them with up-to-the-minute exposure to the inventory across the chain down to the SKU level (Endless Aisle). GUIDED SELLING Using ISAC? , iCongo's wireless enterprise mobile sales assistant, retail sales associates are empowered with a real-time handheld inventory and selling system. The ISAC handheld sales assistants provide sales associates with strategic information to convert a sale without ever leaving the customer. ISAC provides the salesperson with the up-to-the-minute inventory available to sell and suggests alternative products and is integrated to companywide stock information to ensure that every customer opportunity is maximized. In addition, salespeople can use the handheld assistants to access customer online browsing history as well cross-channel purchasing history. ORDER MANAGEMENT SHIPPING & DISTRIBUTION iCongo's ICE3? Order Management, Distribution and Fulfillment Systems allows retailers to manage the pick, pack and ship process within a warehouse and through designated store level fulfillment locations for orders submitted online or through the endless aisle ordering capabilities of physical stores. The system includes bin location management, integrations with shipping carriers, shipment and receiving processes with WMS, integrated 2

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    wireless scanning, return and exchange management and advanced technology for store assignment of orders. SALES INCENTIVE New incentives and tools to report on these cross-channel capabilities are an important step in the execution of cross-channel retailing. The ICE3? Sales Incentive System is a framework to create a comprehensive sales incentive contest for managers, supervisors and sales associates. The system allows retail organizations to increase sales associate productivity, provides real-time reporting on performance and areas where additional training is required and can be used to identify personnel who can be promoted. RETAIL SURVEYS iCongo's ICE3? Retail Business Intelligence Survey System helps retailers better understand shopper behavior, measure customer experience and store performance. iCongo's Retail Business Intelligence Survey System empowers retailers by providing timely information on customer service, product selection, customer satisfaction and other information by chain, region, store groupings and by individual stores. ONLINE MARKETING Email marketing is a critical component of a retailer's cross-channel strategy as a direct oneon-one marketing tool used to attract and communicate directly with customers. The iCongo ICE3? Email Campaign Management System provides the required systems for retailers to manage centralized customer databases, create rich content emails, target customers through advanced profiling and access detailed real-time reports on email campaign activity and sales conversion. In addition, iCongo ICE? Content Management System allows retailers to manage all content, including catalog, rich media, training tools and other relevant content and direct this content to the various channels. RECOVERING LOST SALES OPPORTUNITIES The value of recovering lost sales using effective cross-channel e-commerce can be immense for a retail organization. The following is an example of how this increase in sales can be calculated: Increase in total annual sales = # recovered sales per day per store x average sale price x # stores in chain x 360 days For example: If on average a retailer with 500 stores can capture an additional 2 sales per store at an average ticket price of $60. 2 x $60 x 500 x 360 = $21,600,000 in additional revenue per year In fact, retailers have been shown to experience the capture of more than 2 lost opportunities per day. 3

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    WHAT IS REQUIRED To effectively implement cross-channel retail e-commerce, several pre-requisites are necessary to ensure success: ? Accurate inventory information is a critical enabler for many of the key cross-channel solutions. The e-commerce platform can play an important role by managing the trickle polling across the entire retail chain to track chain-wide inventory information. However, this information is useful only if there is strong in-store inventory data management processes / systems in place. ? For real-time cross-channel information to flow throughout the chain, it is necessary for the retailer to install secure high speed Internet access throughout all store locations. ? In addition to the cross-channel e-commerce technology, often the biggest factor affecting the success of cross-channel retail is the change management which must occur within the organization. ? Retailers need to effectively train personnel on new cross-channel capabilities being offered by the chain. ? New cross-channel metrics need to become an important part of the overall business. ? The way the retailer views and manages e-commerce must shift from a selfgoverning part of the business to a more integrated component of the retailers overall operations. ? New incentives must be strategically implemented to ensure that salespeople and store managers embrace these new cross-channel capabilities and understand their benefits. THE BENEFITS The following are just some of the many benefits that retailers can achieve through crosschannel retail: ? Increase revenues by using multiple cross-channel capabilities to effectively capture lost sales opportunities. ? Cross-sell and up-sell opportunities during customer in-store pickup. ? Improve overall customer service by offering more consumer services in-store and online and by more rapidly satisfying the customer's immediate purchasing desires. ? Improve customer contact, communications and marketing through improved service options, enhanced personalization and business intelligence. ? Lower order and fulfillment costs by improving merchandising and inventory management, streamlining fulfillment processes through distributed fulfillment capabilities, implementing intelligent order routing and shipping cost optimization and by lowering costly store-to-store transfers. ? Extend the capabilities of existing POS and WMS ? Improve merchandising decision making by obtaining new demand and forecasting information never previously available 4

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    . RECOMMENDATIONS AMR Research (December 2007): The online channel for retailers surveyed by AMR Research represents a projected 34% of overall revenue in 2008?a compound annual growth rate (CAGR) of more than 19% over the three-year period of 2006 to 2008. When taking pure-play e-commerce retailers out of the equation, the online revenue represented 19% in 2006. In 2008, respondents anticipate 25%. Although contact centers and physical store locations will feel the brunt of online's gain, the numbers are somewhat misleading. This is because an increasing number of online transactions are now generated from the store via kiosks and point-of-sale (POS) or handheld devices?.To target the lucrative cross-channel shopper, 69% of retailers will be replacing their current e-commerce software with cross-channel e-commerce platforms that bridge each point of interaction. To harness the power of cross-channel retail, retailers will need to: ? Review the organization and processes related to cross-channel operations including inventory management across all channels. ? Embrace a next generation e-commerce platform that can support the cross-channel business. ? Using the cross-channel platform, implement the various cross-channel strategies listed in this document designed to significantly improve in-store and online sales, customer service, marketing capabilities and operational efficiencies. ? Utilize the e-commerce platform to provide access to virtual inventory for products not physically available within the four walls of the store. ? In addition to technology, retailers must develop new cross-channel metrics, training, and incentives to embrace these new cross-channel sales tools. 5

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