You are invited to view a complimentary webinar featuring retail industry experts from Retail Systems Research (RSR) and SPS Commerce. Based on their latest research, including the 2014 Retail Insights industry benchmark report, you’ll learn what strategies your peers are deploying to improve omni-channel performance in 2014.
The webinar provides insights on:
• The state of the retail market—how many retailers have or will adopt the omni-channel? What steps are they taking?
• Which external and internal forces will impact retail the most in the upcoming years?
• Which technology and business areas are retailers, vendors and logistics firms making significant investments in 2014?
2. LEARN THE LATEST ON
OMNI-CHANNEL RETAIL
• The rise of the digital consumer
• The fundamentals of omni-channel
• Retail’s reset moment
• Findings from the Retail Insight industry benchmark survey
• Q&A
3. PRESENTED BY OMNI-CHANNEL
EXPERTS
Paula Rosenblum, Managing Partner,
Retail Systems Research
Paula is widely recognized as one of the top analysts in the retail industry. She formerly
served as Vice President of Research & Content at Retail Systems Alert Group (RSAG),
and as Vice President of Aberdeen Group's Retail Research practice. Prior to that, Paula
spent over 20 years as a retail technology executive and CIO.
Pete Zaballos, Vice President, Marketing,
SPS Commerce
Pete is responsible for the marketing strategy that is defining, executing and scaling SPS
Commerce’s enterprise cloud services. He is a sought-after visionary focused on
perfecting the power of retail trading partner relationships through the intersection of
communities and technology.
9. Retail's Reset Moment:
How Omni-Channel
Selling Affects The
Supply Chain
October 2013
Paula Rosenblum
Managing Partner
Retail Systems Research, LLC
10. Agenda
About RSR
Retail’s RESET Moment
• Innovations On The Selling Side Affect the Supply Chain
SPS Commerce and RSR Joint Survey
• How is the Supply Chain responding?
11. About RSR
Founded in 2007. Quickly became the leading source of insights for trends in
retail technology, and retail ecosystem in general.
Mission: To elevate the conversation about retail technology to a strategic level
within the retail enterprise by:
•
•
•
Providing objective, pragmatic advice to both retailers and solution providers
Leveraging our extensive retail industry experience
Providing a deep bed of research into retailers' technology investment plans
and the business opportunities and challenges that drive those investments.
We help retailers keep their IT strategies aligned with corporate objectives.
We help solution providers align their products and messages with retailers’
needs.
13. RSR’s Take: The Retail Industry Is At A
“Reset Moment”
Today (As Before) Technology Is The Trigger For Major
Shifts In Business And Society
Information Age
Industrial Age
Agrarian Age
Participation Age
14. Consumer Behaviors Are
Fundamentally Changing …
From This …(very orderly)
Investigate
Select
Pay For
Fulfill
Pay For
Fulfill
Pay For
Fulfill
Pay For
Fulfill
Store
Investigate
Select
Web
Investigate
Select
Catalog
Investigate
Select
Direct Sales
15. …To This (Many Paths To
Purchase – Chaotic Patterns)
Investigate
Select
Pay for
Fulfill
Store
Store
Store
Store
Call
Center
Call
Center
Call
Center
Direct
Delivery
Web
Web
Web
Direct
Sales
Direct
Sales
Direct
Sales
…and
Mobile
Anything
This is the Omni-Channel
Phenomenon
24. The Question That Is Only
Beginning To Be Asked Is…
“How Do We Meet These Fulfillment
Requirements Profitably?”
25. The Payoff? Beyond Any Doubt
Multi-Channel Customers Are:
2013
2012
Significantly More Profitable Than
Single Channel Customers
Slightly More Profitable Than Single
Channel Customers
Equally Profitable
Less Profitable Than Single Channel
Customers
Don't Know/Can't Tell
38%
47%
29%
28%
3%
7%
3%
10%
18%
17%
RSR Research, June 2013
But how much profit are we leaving on the table?
26. The State of the Union: RSR & SPS Commerce
Asked YOU
28. How We Structured the Survey:
RSR’s BOOT MethodologySM
Business
Challenges
Opportunities
Organizational
Inhibitors
Technology
Enablers
A simple, yet powerful model
Puts technology in the context of business issues
29. Who You Are
Total of 306 Respondents.
• 71% Vendors/Suppliers
Executive Management
40%
Marketing
6%
• 21% Retailers or Distributors
Merchandising
2%
Procurement/Product Development
3%
• 8% Logistics providers (LSPs)
E-Commerce
4%
Information Technology
9%
Business Development
7%
Supply Chain
7%
Logistics
7%
Warehouse
4%
Finance
9%
31. Overview
• The omni-channel imperative and how we got here
• A 360 degree viewpoint
• A Supply Chain still bullish on the future
• Retailers lagging suppliers in buy-side readiness
• Budgets reflect a willingness to spend, but some lack of
clarity on what to spend it on
32. In The Next 18-24 Months, Retail Will Move To
Address How To Profitably Serve
Anytime/Anywhere Shopping
2010-13
The Impact of the
massive adoption of
consumer
technologies
(mobile, social) on
the retail selling
environment
2013
The harmonization of the
digital and physical selling
environments
Next Generation of Sales
& Marketing
2014
2015-16
Next Generation Supply Chain
33. Bullish on the Future
These percentages almost identical to last year’s survey.
34. A Sorry State of Affairs
RSR Research, September 2013
Retailers lag… likely needing a champion
(as marketing was for sell-side).
35. … and It’s Not About the Money
RSR Research, September 2013
“Bearing in mind that an equal number of respondents reported budget increases last year, we can
assume that those whose budgets rose continue to keep those increases intact. The ecosystem
recognizes that it is behind, has some headroom for growth, and is continuing to invest.”
37. Business Challenge Headlines
• Optimism colored by painful memories
• Meeting customer expectations remains a key challenge
• The Amazon Effect
• Demanding customers across the entire supply chain
• Transparency informs decision-making
• Wanting broader assortments
• Loyal to valued partners
• What if the future looks like the past?
• Fear of economic and supply chain shocks color our world
• Regulations and politics shape our decision-making
• Consumer preferences constantly shifting
38. The Economy and Customer
Color our Worlds
RSR Research, September 2013
Customer expectations increase pressures on the entire ecosystem
“The Amazon Effect”
39. Man…These People Are Demanding
How has your customer changed vs. 2 years ago?
"They are more likely to...."
Retailers
Vendors
LSPs
85%
Requires immediate availability/shipping
77%
84%
Knowledgeable on competitive offerings
77%
79%
84%
82%
Knowledgeable on pricing
74%
72%
Seeks information from social networks before buying
33%
63%
Knowledgeable on products
65%
Looking for variety/broader assortments
82%
76%
65%
Loyal to retailer
Loyal to brands
78%
63%
67%
11%
23%
37%
35%
17%
37%
RSR Research, September 2013
40. Man…These People Are Demanding
How has your customer changed vs. 2 years ago?
"They are more likely to...."
Retailers
Vendors
LSPs
85%
Requires immediate availability/shipping
77%
84%
Knowledgeable on competitive offerings
77%
79%
84%
82%
Knowledgeable on pricing
74%
72%
Seeks information from social networks before buying
33%
63%
Knowledgeable on products
65%
Looking for variety/broader assortments
82%
76%
65%
Loyal to retailer
Loyal to brands
78%
63%
67%
11%
23%
37%
35%
17%
37%
Glimmers of good news
RSR Research, September 2013
41. The Future Brings More of the Same
RSR Research, September 2013
The economy, the customer and political climate will drive us.
43. Some Differing Points of View
Retailers are pragmatic
• Fulfill customer orders from inventory, regardless where order is
generated
• Drive increased traffic to stores
Vendors deliver mixed messages
• Top priority is to drive customers to retailer stores
• Following closely behind: selling direct
Their approaches differ… as we’ll see.
44. Retailer Pragmatism
Retailers' Top 3 Omni-Channel Opportunities
Fulfill customer orders with…
58%
Drive increased traffic to retail stores
50%
Build a social community around our…
42%
Deliver a broader product assortment, the…
34%
Deliver a consistent cross-channel…
34%
Provide flexibility to the customer to…
Provide more detailed product information
26%
26%
RSR Research, September 2013
Retailers presume that consumers can find detailed product information on
their own, yet interest in “endless aisle” grows.
45. Vendor Mixed Messages
Top Vendor-Identified Opportunities
A new world of frenemies:
Drive increased traffic to retail stores
Provide more detailed product
information
42%
38%
Increase direct sales from our company’s
e-commerce site
35%
Support new order management models
for retail customers, especially drop-ship
Private Label vs. Vendor Direct
35%
The Rise of Vendor-Direct
Vendors Report:
Product available through retailer…
Sales made through retailer…
78%
22%
Products available through vendor…
Sales made through vendor…
53%
17%
RSR Research, September 2013
46. What Do Retailers Want?
Top 3 Vendor Capabilities That Retailers Value
Retailers' POV
Vendors' POV
75%
81%
71%
76%
Price
Item availability
Brand recognition
36%
32%
32%
29%
Compliance with trading requirements
Item assortment
Visibility to sales and order status
Years of business
Drop ship experience
Digital assets
Size of company
5%
7%
4%
46%
50%
21%
22%
18%
14%
18%
25%
14%
RSR Research, September 2013
Vendor perception on assortment depth value far outweighs retailers’.
48. Internal Forces Affect Change
• Strong leaders a must
• The next generation of employee emerges across the Supply Chain
• Technically savvy
• Good interpersonal skills
• Vendors anticipating retailers’ future needs
• Retailers are very slow in synchronizing
• Mixed messages on “product information”
• In a world where we’re used to sharing documents, is it time to think
about sharing all kinds of structured and unstructured data?
49. The Visionary Leader and
The Empowered Employee
Top 3 Internal Forces Impacting the Business in the
Next 5 Years
2013
2012
91%
86%
Management’s vision/strategic planning
New technology adoption
Employee technical skills
34%
31%
24%
27%
25%
Employee interpersonal skills
Mergers or acquisitions
Mobile workforce
Employees’ use of social media
55%
52%
62%
13%
11%
11%
9%
RSR Research, September 2013
All the technology in the world will not help if people cannot use it.
50. Retailers Lag, Vendors Waiting
Cross-Channel Expectations
Vendors vs. Retailers
Retailers report "Fully Cross-Channel"
Pricing
Product information
Product availability
Promotions
Breadth of product assortment
Access to helpful employees
Images/video
Visibility in social media conversations
User ratings/reviews
Vendors report "Important to our retail customers"
69%
55%
84%
66%
62%
72%
41%
39%
38%
22%
35%
27%
31%
26%
12%
17%
17%
31%
RSR Research, September 2013
Retailers lack of omni-channel capabilities also reported in other RSR’s 2013 reports.
Vendors generally doing a better job anticipating customers’ omni-channel needs.
Example: Cross-channel price synchronization. Retailers struggle. Vendors recognize it’s important to
their retail customers; retailers just have to make it work.
52. Tech Enabler High Notes
• LSPs focus on warehouse improvements
• All others making investments “across the board”
• Can EDI drive visibility? And why aren’t retailers planning to
invest in the most important tool in their omni-channel toolkits?
• Can retailers use the data they get?
• How many item attributes are enough?
53. A Harmonized Omni-Channel
Environment: Wishes vs. The Budget
Omni-Technology: Current Status vs. Perceived Value
90%
80%
70%
60%
50%
40%
30%
20%
Implemented
"Very Valuable"
?
#5
#4
#3
#2
#1
Source: RSR Research, June 2013
56. The World of Product Attributes
• Generally, vendors provide more than retailers use
• Vendors expecting to provide more in the next year
• Most currently provide mundane, but necessary attributes
Are we setting our
sights too low?
58. Vendor Direct With or
Without the Retailer
•
All agree drop ship volumes will rise
• Vendors shipping on their own behalf
• Also shipping on retailers’ behalf
• LSPs supporting both
• A reliance on the empowered employee
• Dated means of communication may slow the process
• Further shifts coming. The wise company will invest in
improving product information capabilities and supply chain
efficiencies
59. Thank You!
Paula Rosenblum, RSR Research
prosenblum@rsrresearch.com
Further Information on Products &
Services: info@rsrresearch.com
www.rsrresearch.com
Thank you. Welcome to the second annual Retail Insights webinar with Retail Systems Research and SPS Commerce.Each year our industry benchmark survey delivers a 360-view of the state of the retail supply chain. Our research is based on hundreds of anonymous surveys from retailers, suppliers and logistics professional. We hope you today’s event, learn something new and become inspired in to make the most of your omni-channel strategies in 2014.
Our agenda for today’s webinar includes the rise of the digital consumer and how their social and demanding behavior is impacting retail, The fundamental building blocks to a successful omni-channel strategy.Then, you’ll hear why today is retail’s reset moment in so many ways and hears a detailed account of what your peers said about the state of retail, their operations and merchandising strategies, and where their challenges are in 2014 based on the industry benchmark survey report.During the Q&A, you’ll have an opportunity to ask us your most pressing omni-channel or supply chain questions. Last year this portion of the event include dozens of compelling questions from you. At the end of the presentations, the operator will provide directions on how to submit your questions.
Our speakers for today’s webinar include Paula Rosenblum, one of the brightest and insightful minds in retail today and Managing Partner at RSR. Her recent reports on merchandising, the omni-channel, pricing practices and the value of store employees in the consumer age show she is on the cutting edge of retail. She is smart and knows retail inside out, and always worthy of listening to. I am Pete Zaballos, the Vice President of Marketing at SPS. I work alongside many of our retailers, suppliers and logistics executives on our enterprise cloud network. Most describe me as a change agent to adopt winning omni-channel strategies that extend trading communities, look at new sourcing and item management strategies built for the digital consumer, and reap the value of perfecting their trading partner relationships.Let’s move ahead to the the information you’ve dialed in to hear….
Our speakers for today’s webinar include Paula Rosenblum, one of the brightest and insightful minds in retail today and Managing Partner at RSR. Her recent reports on merchandising, the omni-channel, pricing practices and the value of store employees in the consumer age show she is on the cutting edge of retail. She is smart and knows retail inside out, and always worthy of listening to. I am Pete Zaballos, the Vice President of Marketing at SPS. I work alongside many of our retailers, suppliers and logistics executives on our enterprise cloud network. Most describe me as a change agent to adopt winning omni-channel strategies that extend trading communities, look at new sourcing and item management strategies built for the digital consumer, and reap the value of perfecting their trading partner relationships.Let’s move ahead to the the information you’ve dialed in to hear….
Our speakers for today’s webinar include Paula Rosenblum, one of the brightest and insightful minds in retail today and Managing Partner at RSR. Her recent reports on merchandising, the omni-channel, pricing practices and the value of store employees in the consumer age show she is on the cutting edge of retail. She is smart and knows retail inside out, and always worthy of listening to. I am Pete Zaballos, the Vice President of Marketing at SPS. I work alongside many of our retailers, suppliers and logistics executives on our enterprise cloud network. Most describe me as a change agent to adopt winning omni-channel strategies that extend trading communities, look at new sourcing and item management strategies built for the digital consumer, and reap the value of perfecting their trading partner relationships.Let’s move ahead to the the information you’ve dialed in to hear….
Our speakers for today’s webinar include Paula Rosenblum, one of the brightest and insightful minds in retail today and Managing Partner at RSR. Her recent reports on merchandising, the omni-channel, pricing practices and the value of store employees in the consumer age show she is on the cutting edge of retail. She is smart and knows retail inside out, and always worthy of listening to. I am Pete Zaballos, the Vice President of Marketing at SPS. I work alongside many of our retailers, suppliers and logistics executives on our enterprise cloud network. Most describe me as a change agent to adopt winning omni-channel strategies that extend trading communities, look at new sourcing and item management strategies built for the digital consumer, and reap the value of perfecting their trading partner relationships.Let’s move ahead to the the information you’ve dialed in to hear….
Our speakers for today’s webinar include Paula Rosenblum, one of the brightest and insightful minds in retail today and Managing Partner at RSR. Her recent reports on merchandising, the omni-channel, pricing practices and the value of store employees in the consumer age show she is on the cutting edge of retail. She is smart and knows retail inside out, and always worthy of listening to. I am Pete Zaballos, the Vice President of Marketing at SPS. I work alongside many of our retailers, suppliers and logistics executives on our enterprise cloud network. Most describe me as a change agent to adopt winning omni-channel strategies that extend trading communities, look at new sourcing and item management strategies built for the digital consumer, and reap the value of perfecting their trading partner relationships.Let’s move ahead to the the information you’ve dialed in to hear….
From our perspective in retail – with the largest network in the market – we see Omni-Channel as being comprised of four key components:-Adaptability in how items are managed, to embrace the fluid nature of what is required to convince a consumer to buy, and to fulfill that purchase-Increasing the velocity of item sell-thru, ensuring you always have the right product where demand is highest for it-Access to large quantities of new items, to ensure you’re able to anticipate and respond to rapidly changing consumer tastes-In concert this enables frictionless scale. The ability for retailers and consumers to rapidly, easily expand and adapt their businesses
To understand the impact, it’s good to look back at past “Reset” moments. In the U.S., the dawn of the Industrial Age came in the early 1800’s, with inventions like the sewing machine, the steam engine, and the cotton gin. But what triggered a massive societal shift to the Industrial age was the LIGHT BULB at the very end of the 19th Century. Because of the light bulb, factories could now operate 24X7, and that triggered a huge population shift away from farms and to the cities.The information age really began with the dawn of commercial computing in the late 1950’s. But it wasn’t until the mid 1980’s – with the mass adoption of bar codes in stores, that most people began to participate. With bar code scanning, companies such as Wal-Mart were able to scale their businesses to unimagined sizes, by optimizing their supply chains. This is how mass merchandising became so prevalent.Now, we are entering the participation age. It can be argued that this new age really began with network-attached personal computers. But what triggered a mass movement to the Participation Age is – the smart mobile phone, and particularly the iPhone. The iPhone wasn’t the first mobile phone by any means, but it was the one the World fell in love with. Now consumers carry a world of information with them wherever they go.
So what to do? When we talk about “Omni-channel” retailing, this is what we mean. There should be one set of processes (and systems) that support all the paths to purchase, regardless of how a consumer starts and ends a transaction with a retailer. But we’ll see later that this is a HUGE CHALLENGE, and one that cannot be addressed without a redesign of the operating model and new investments in the systems that support it. This is the Uber-challenge.
When new channels started to emerge, for example catalog, or first generation e-commerce sites, retailers simply replicated the operating model for the new channels. They planned, bought, sold, and tracked in one or thee other of the channel, and the path to purchase was still assumed to be from “the front” of the store through to the ring-out. There was a lot of operational duplication, but it really didn’t matter too much.
But in the mid-2000’s, consumer expectations started to change, and they wanted retailers to support more complex paths to purchase, for example, buying online but returning an item in a store. So retailers had to develop specific inter-connects between the channels to support these new behaviors. This was (and still is) called “Cross Channel retailing” – and for many retailers, this is the state of the art. But note that there’s still a lot of duplication of process and systems. And now, because more and more shoppers want this, the duplication is getting too expensive.
Thank you for attending today’s webinar with RSR and SPS Commerce. We hope you were inspired by your industry’s optimism and filled with ideas on how to bolster your omni-channel in 2014. Have a wonderful day.