Retail Networks

by Jim Frome and Peter Zaballos
SPS Commerce
RetailNetworks
SPS Commerce Special Edition

Retail Networks For Dummies®
, SPS Commerce Special Edition
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Table of Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
About This Book......................................................................... 1
Icons Used in This Book............................................................. 2
Beyond the Book......................................................................... 2
Chapter 1: Understanding the New Era in Retail. . . . . . . 3
Omnichannel: Everybody Wins................................................. 4
They Sure Don’t Shop the Way They Used To........................ 4
The Rise of Omnichannel Customers....................................... 5
Understanding Omnichannel Retail.......................................... 6
Chapter 2: The Demand for Seamless
Shopping Experiences. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Look at the Big Picture............................................................... 8
Understanding the Omnichannel Retail Landscape............... 9
Shopping from the Consumer’s Perspective........................... 9
Sourcing: More Channels, New Decisions............................. 11
Assortment: Driving Sales with Expanded Attributes.......... 12
Fulfillment: Taking a Customer‐Centric Approach............... 14
Analytics: Providing Visibility with Inventory Data............. 14
Building the Backbone of Omnichannel Retail...................... 15
Chapter 3: Discovering the Power
of Collaboration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Navigating Inventory Decisions.............................................. 18
Inventory options to ponder......................................... 18
Balancing inventory demands across channels......... 19
Giving customers the reins........................................... 19
Tapping into the Synergies of Collaboration......................... 19
The Power of Collaboration and Growth............................... 20
Overcoming Data Analytics Complexities............................. 20
Why silos don’t work...................................................... 21
Building inventory intelligence from
trading partner data................................................... 21

Retail Networks For Dummies, SPS Commerce Special Edition ____iv
Chapter 4: Anatomy of Omnichannel
Retail Supply Chains . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Operationalizing Omnichannel Retail.................................... 24
Join a Retail Network................................................................ 25
Relieving retail pressures.............................................. 26
Building blocks of retail networks................................ 26
Cloud Services Speed the Transformation............................ 26
Building an Omnichannel Ecosystem..................................... 27
Build the foundation first.............................................. 28
Share product information efficiently.......................... 28
Break free of the barriers of legacy systems............... 28
Think before expanding assortments.......................... 29
Logistics can lead the way............................................. 29
Chapter 5: Driving Growth with Data
and Intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Trading Partner Connections Made Easy.............................. 32
Simplifying information sharing................................... 32
Streamlining omnichannel integration......................... 33
Commerce Graphs Empower Intelligent Relationships....... 33
The value of modeling trading partner
relationships................................................................ 34
Amazing ways to make new connections.................... 35
A window into rich historical data............................... 35
The Power of Cloud and Multitenant Services...................... 36
Chapter 6: Getting Started. . . . . . . . . . . . . . . . . . . . . . . . . 37
Work in Unison to Satisfy Omnichannel Customers............ 38
Reinvent Your Key Business Processes................................. 38
Make Vendor Onboarding Simple........................................... 39
Chapter 7: Ten Keys to Omnichannel Success . . . . . . . 41
Focus on the Consumer at All Times...................................... 41
Multiple Channels, One Experience........................................ 42
Fulfill Orders Seamlessly.......................................................... 42
Define Assortments Based on Data........................................ 42
Give Consumers, Lots of Details............................................. 43
Share Data with Partners......................................................... 43
Source Items and Suppliers..................................................... 43
Look to the Cloud..................................................................... 43
Show Me the Inventory............................................................ 44
Connect with the Cutting Edge............................................... 44

Introduction
Even young adults can probably still remember a time
when shopping happened mostly at brick‐and‐mortar
stores, and they can recall how revolutionary it was when
shoppers first gained the capability to sit at home and order
merchandise from their computers. The explosion in the
numbers and capabilities of mobile devices is fueling another
revolution — in‐store and online used to be separate buying
processes, but now the brick‐and‐mortar, online, and mobile
worlds are converging.
That revolution is omnichannel retail, a seamless shopping
experience that reaches across every shopping channel. It’s
what more and more buyers demand, and what the most
forward‐thinking retail organizations are making a reality.
With omnichannel retail, a shopper in the store can use his
or her phone to check item information, and if an item isn’t
in stock, a clerk can easily arrange to have it shipped right to
the buyer’s home. With equal ease, an online buyer can return
merchandise at a local store, or buy something online and
pick it up a short time later in town. In these and many other
ways, the shopping experiences across multiple channels are
coordinated, seamless, and simple.
Simple for the shopper, maybe, but for retailers and their
partners up and down the supply chain, it’s a big challenge.
Omnichannel means getting not just all retail channels on the
same page, but also all the various players, from the manufac-
turer to the retailer to the logistics provider. Old principles
and legacy technologies tend to interfere with this journey;
new approaches are clearing the path for creating the agility
required for omnichannel success.
About This Book
This book is your guide to achieving your omnichannel
vision. Flip through the pages for thoughts on the changes

Retail Networks For Dummies, SPS Commerce Special Edition ____2
you’ll need to adopt in sourcing, assortment, fulfillment, and
analytics. You’ll:
✓✓ Find advice on making these processes more agile and
better able to address the demands of the omnichannel
consumer.
✓✓ Learn why your best bet is to reach out to retail partners
to take the journey with you, and how your efforts at
partnership will pay off for everyone.
✓✓ Explore the benefits of joining a retail network — sort
of the omnichannel equivalent of Facebook — with the
power to quickly connect you with like-minded partners,
integrate your operations, and prepare you and your part-
ners to together really deliver what the customer wants.
Icons Used in This Book
Every For Dummies book has small illustrations, called icons,
sprinkled throughout the margins. These tiny images call
attention to text that is worth special attention for one reason
or another. Following are the icons used in this book.
These are the most important points to keep in mind as you
immerse yourself in the world of omnichannel retail.
This information is a bit more detailed than some readers will
find necessary — skip it if you’d like, or dive into the details!
Here’s some right‐on‐target information that will help you
make the most of an investment in a retail network.
It’s just what it sounds like. The words next to this icon help
you avoid common mistakes, misconceptions, myths, and
pitfalls.
Beyond the Book
For more information about omnichannel retail from the SPS
Commerce perspective, please visit www.spscommerce.com/
omnichannel.

UnderstandingtheNew
ErainRetail
In This Chapter
▶▶ Profiting through omnichannel retail
▶▶ Changing the way people shop
▶▶ Understanding today’s consumers
▶▶ Streamlining complexity with a retail network
It’s no secret that the shopping experience has radically
changed through the years. These days, the lines between
the physical store and digital shopping channels — including
e‐commerce, social commerce, and mobile commerce — have
blurred.
Consumers have eagerly embraced the explosion of shop‑
ping options. Those retailers keeping ahead of the trends are
responding with an ever‐stronger focus on omnichannel retail-
ing, which is a seamless approach to the customer experience
reaching across every shopping channel. Today, on nearly
every quarterly earnings call and in every public venue, retail
CEOs regularly address the omnichannel phenomenon and
how it impacts their plans and performance.
This chapter shines the light on omnichannel retail, which
aligns the shopping experience across everything from
brick‑and‐mortar stores, to computers and mobile devices, to
radio and television, and from traditional paper catalogs to
tomorrow’s e‐commerce. This chapter also offers an introduc‑
tion to digital and omnichannel consumers and their habits.
Chapter 1

Retail Networks For Dummies, SPS Commerce Special Edition��4
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Omnichannel: Everybody Wins
No matter how much — or how little — experience you have
with omnichannel retail, it’s probably impacting your business.
Indeed, it’s a phenomenon that has touched every corner of
the retail industry and transformed the supply chain — and it
isn’t going away.
As you pursue effective omnichannel retail strategies, keep in
mind this key perspective: Delivering your products via mul‑
tiple sales channels isn’t just a matter of satisfying demanding
digital consumers. It’ll boost your bottom line, too.
In fact, other than factors related to the economy, the greatest
external force impacting retail businesses across the next five
years will be the rising purchasing expectations of consumers.
Consumers expect a faster and better shopping experience,
and they will be more apt to purchase from retailers that cater
to their needs from any sales channel. That’s according to RSR
Research, which studied omnichannel strategies in 2014 and
reported that 76 percent of retailers find omnichannel shop‑
pers to be more profitable than single‐channel shoppers. And
those numbers are trending upward.
They Sure Don’t Shop the
Way They Used To
Your consumers have changed dramatically in recent years.
Pricing, product information, and competitor options are liter‑
ally at their fingertips, even as they stand in the aisle of your
brick‐and‐mortar locations.
Given this unprecedented shopping access, consumers now
expect limitless options, available at the price they want,
when and where they want to buy. And this behavior is here
to stay — by 2017, more than 78 million shoppers annually
will see and touch a product in‐store, then search for better
deals via mobile devices, according to the market research
firm IDC.
As retailing has innovated, the way consumers make deci‑
sions has evolved. Many consumers are turning to search

�� Chapter 1: Understanding the New Era in Retail 5
engines — IDC says search engines have a high degree of
influence on whether a consumer buys online or goes to a
brick‐and‐mortar store. In fact, search engines now wield
even more influence over the purchasing process than friends
and family. Yes, if consumers get one recommendation from
mom or a best friend and another recommendation from a
search engine, they’re likely to go with what the search engine
recommends.
Also on the rise are online social and mobile sources. From
car buying to clothing purchases and more, it’s abundantly
clear that one channel no longer fits all shoppers. Consumers
are researching and buying the products and services they
need when it’s most convenient, using the channel of their
choice.
The Rise of Omnichannel
Customers
Not all in‐store customers are digital customers, and not all
digital customers are in‐store customers. But the lines are so
blurred that retailers must gain an intimate understanding
of both and how these two groups are converging. If you can
really figure out the extra‐profitable omnichannel customer,
you’ll be positioned to drive a stronger consumer experience
for all customers.
Recent research from Deloitte confirms the profitability of
omnichannel shoppers, finding that they spend far more than
those who shop in stores alone. Buyers who shop a combi‑
nation of store, Internet, and mobile channels plan to spend
a total of $1,643 on holiday purchases — that’s a stunning
76 percent higher than those who shop only in the store.
No wonder retailers continue to seek better ways to engage
their consumers in the new omnichannel world. They’re find‑
ing that mobile applications and technologies pave the way
for deeper engagement with consumers. Among the effective
means for driving sales are loyalty/rewards programs, retailer
apps, and flash sales.

Retail Networks For Dummies, SPS Commerce Special Edition��6
One thing remains constant with consumers, however they
shop: They’re always on the lookout for deals and value.
Making rewards and promotions available via mobile devices
gives customers greater access to those deals, and that
ultimately increases the chances of a purchase.
Understanding Omnichannel
Retail
The omnichannel world clearly requires new thinking, and it
adds new levels of complexity to an already challenging retail
environment. But you don’t have to go it alone. Successful
companies find that it takes a new level of collaboration
and cooperation with trading partners, or within the supply
chain, to satisfy the omnichannel customer. An example is the
concept of the retail network, a new type of online business
community for retail trading partners that enables compa‑
nies’ transformation to omnichannel retail. It’s a great way to
streamline omnichannel complexity.
It has always been the case that the winners in retailing are
those who embrace innovation and successfully navigate
change, but that’s much easier said than done. By working
together as part of a retail network, like-minded companies
lower the barriers for adapting to new omnichannel require‑
ments and capabilities — including changes that are predict‑
able as well as those the market isn’t even imagining today.
Retail networks allow all members access to collective
resources and experiences. As part of an established trading
community, members find it a lot easier to reap the rewards
of omnichannel strategies and overcome the obstacles.

TheDemandforSeamless
ShoppingExperiences
In This Chapter
▶▶ Creating a seamless shopping experience
▶▶ Understanding the omnichannel retail landscape
▶▶ Seeing the customer perspective
▶▶ Sourcing products in an omnichannel world
▶▶ Delivering more item information
▶▶ Fulfilling with the customer in mind
▶▶ Gaining visibility through analytics
▶▶ Building the backbone of omnichannel retailing
If you’re wondering how to compete with Amazon, here’s
your answer: You can’t. At least, not if you plan to compete
head‐to‐head with the e‐commerce giant in the broadest sense
of the word. That said, you can compete effectively if you
bring something better to the shopping experience through
an advanced omnichannel retail strategy focused on the
consumer.
This chapter focuses on the retail landscape and the incredibly
demanding expectations of customers. It also spells out the
four key elements of successful omnichannel retail strategies
that must work in harmony: sourcing, assortment, fulfillment,
and analytics.
Chapter 2

Look at the Big Picture
You need to go to market with a business strategy and
technology architecture designed for today’s retail landscape,
connecting with the customer through every possible
shopping channel. And it’s not just a matter of engaging
customers, but delivering to them. To really build an effective
and competitive shopping experience, your organization must
be faster and more agile than what your competitors can offer.
True omnichannel success means crafting a seamless shop-
ping experience that delivers value whether the customer is
in the store, on a laptop, or on the phone (see Figure 2-1). It’s
not just a matter of retrofitting new omnichannel capabilities
into an existing business using legacy systems — that offers
only a temporary fix.
You’ll just create problems if all you do is take a single‐channel
business process and bolt on additional fulfillment models such
as drop‐shipping, where you arrange direct shipments from the
manufacturer or wholesaler right to the customer. That’s not
going to meet the key challenge of successfully and seamlessly
engaging with customers wherever they shop, unless you’re
also addressing such things as item sourcing, sell‐through, and
assortment.
Figure 2-1: A seamless consumer experience.

�� Chapter 2: The Demand for Seamless Shopping Experiences 9
What you need is a holistic business approach, in which
expanded fulfillment options are closely coupled to your item
management system, your analytics capabilities, and your
item sourcing network. You need to support a breadth of
interrelated requirements giving you the responsiveness you
need to be competitive.
Understanding the Omnichannel
Retail Landscape
As its name suggests, the omnichannel retail landscape
includes multiple channels, but it also includes multiple
devices. Consumers connect with companies at many engage-
ment points every day, and they view their experiences with
retailers and items based on how seamless the transition
is between various channels and devices. From mobile to
social to brick-and-mortar and catalogs — and from in‐person
retailer visits to phone sales to e‐commerce and beyond —
consumers want an easy transaction no matter when, where,
or how they choose to interact with the retailer.
If e‐commerce changed retail, you might say mobile changed
e‐commerce, or at least drastically accelerated its growth.
Indeed, the adoption of mobile devices put shopping in the
palm of the consumer’s hand.
Mobile devices have quickly become both more powerful
and more ubiquitous. Sales of smartphones grew from
139 million units in 2008 to more than a billion in 2014, accord-
ing to market research firm Gartner. What’s more, tablets
were virtually nonexistent just five years ago, but Gartner says
sales surpassed 180 million units in 2013.
Shopping from the Consumer’s
Perspective
In the past, the retailer called the shots — trying to please
the customer, of course, but setting a lot of the terms for how
business was transacted. These days, the consumer is in the
driver’s seat, and that makes things vastly more complicated.

All trading partners must work in harmony to meet customer
demands for:
✓✓ Product information
✓✓ Social validation
✓✓ Inventory information
✓✓ Competitive pricing
✓✓ Convenient fulfillment
✓✓ Convenient returns
For example, traditional stores in the past may have carried
thousands or tens of thousands of items, but in today’s retail
environment, consumers expect far greater choice. Retailers
find themselves competing with what seems like an “endless
aisle” of goods, so many now manage 100,000 items or more,
often making aggressive plans to build that number into the
hundreds of thousands or even millions of items sold through
online channels.
To meet such wild expectations, engage customers, and
create a truly seamless shopping experience, it’s critical to
become very efficient. Four key components — sourcing,
assortment, fulfillment, and analytics — of your business must
work in perfect harmony to fuel the collaboration needed
across trading partners.
It’s no surprise that consumers demand more information than
ever about the items for which they’re shopping. Effectively
managing item data when planning assortments has never
been easy, and in the omnichannel era, it’s all the more
complex — and more important.
In the past, merchandising groups have used item informa-
tion in developing planograms for the brick‐and‐mortar store.
Planning is far more complicated now, because online and
mobile commerce requires all kinds of extra item information,
including a lot more details, digital images, video clips, and
even customer ratings.
Multiply all that information by the ever‐growing list of items
retailers are expected to offer, and planning becomes a daunt-
ing task. It has always been a challenge to plan efficiently and
consistently, especially if suppliers and retailers are relying

on manual processes or legacy catalog services to collect
information from suppliers. Clearly, in the omnichannel world,
a fundamentally different approach and technology architec-
ture are needed to effectively handle item information from
across the entire vendor community.
Sourcing: More Channels,
New Decisions
With consumers choosing and buying items from multiple
channels, you’ve got a bunch of interrelated decisions to
ponder. Which items should be kept in store? Which will only
be sold online? And which merchandise should be sold in
multiple channels?
To answer these questions, you need massive scale in experi-
mentation. You have to enable the right mix of merchandise to
optimize sell‐through, and at the same time ensure that your
valuable in‐store real estate offers a compelling assortment.
The ultimate aim is to meet customers’ needs for varied item
assortment at competitive prices. Your mission is to engage
customers with a vast assortment of goods that’s not con-
strained by the shelves along a traditional brick‐and‐mortar
aisle.
It’s worth noting that it isn’t about offering an unbelievably
broad selection of merchandise — retailers must also adapt
quickly to change, with a capability to source new items more
quickly than ever. If your assortment doesn’t yet have a hot
new product, someone else’s will.
Of course, sourcing new suppliers and items is anything but
a simple process. Finding the right match has always been
a time‐consuming endeavor involving a dedicated team of
buyers. Traditional sourcing is one part art, one part manual
process, and one part long‐term relationship development.
In this traditional process, once a desired item is found, a
lengthy discovery and negotiation process helps determine
whether the supplier can work with the retailer’s merchan-
dising and trading requirements. And even if all the answers

suggest that the supplier would be a good match, there’s still
no guarantee that supplier can deliver on its promises.
Needless to say, given the vastness of items and the need
to respond quickly to changing products and demands, that
time‐honored vendor‐sourcing model won’t cut it in the
omnichannel world. Using the old processes, it could take
weeks or months to find a new item and a reliable vendor. For
that matter, those old ways aren’t always ideal for vendors,
either, because it can be tough for them to get visibility and
establish retailer relationships.
Clearly, today’s sourcing processes can hardly be scalable or
agile enough to keep up with consumers’ demands.
What’s more, online channels are the primary source of new
item discovery for retailers, as well as the proving ground for
new and untested merchandise. Retailers need to onboard
vendors in hours or days, not months. They need to quickly
cycle items through their websites to identify top perform-
ers, and for the same purposes, must carefully manage item
assortments in stores. In today’s retail environment, real‐time
visibility into a supplier’s items and capabilities isn’t just
nice to have, it’s an essential capability for quickly vetting
new suppliers and items. And suppliers need to support this
change by providing the information retailers need to manage
rising consumer expectations for an expanded assortment.
Assortment: Driving Sales with
Expanded Attributes
Beyond the growing complexity of managing more products,
retailers and suppliers also must manage more item attri-
butes — descriptors that define the category or nature of an
item — than ever before. Attributes are used both in‐store
and online, and they describe specific item characteristics
that are absolutely vital to customer acquisition, merchan-
dising, sales, and fulfillment.
More item data isn’t a luxury — it’s the foundation of
omnichannel retail. This is the era of item‐centric retailing.
Industry research, in fact, shows that the more complete
the item content is, the higher the conversions and sales.

Certainly, robust item information helps consumers make
more informed buying decisions, but just as important, it
powers more effective search results. The more visible an item
is in consumer searches, the more likely it is to be purchased.
Online shoppers expect to have more robust information at
their fingertips than if they were shopping in a store. When
you think about it, that makes sense. It’s easier to provide
more details online to help with the purchasing decision,
and it’s essential because there is no salesperson to answer
questions.
That means retailers must support an expanded set of
consumer‐facing attributes, such as item descriptions, detailed
images and videos, warranty information, and customer
reviews. Meanwhile, suppliers need to provide retailers with an
expanded set of attributes to support items sold online, such
as shipping descriptions and accurate inventory information.
For instance, here are some e‐commerce retailing attributes:
✓✓ Retail attributes
•• Care information
•• Customizable
code
•• Warranty
•• Consumer available
date
✓✓ Ordering attributes
•• Quantity on hand
•• Drop shippable
•• Return description
•• Shipping description
•• Consumer package
length
•• Consumer item length
✓✓ Extended retail attributes
•• Item extended
description
•• Image URL
•• Image name
•• Short marketing
message
•• Long marketing
message
•• Features/benefits
•• Keywords
•• Consumer description
•• Condition
•• Water resistant
•• Energy star compliant
Item management has obvious benefits for the sales and mar-
keting departments, but in reality it’s useful across the entire
retail operation. Item data is like the connective tissue of retail.

You can use it to enhance customer acquisition, merchandising,
demand planning, operations, warehousing, and transportation.
Fulfillment: Taking a
Customer‐Centric Approach
Order fulfillment used to have just one central purpose: to ful-
fill orders to stores. Here’s how it worked: Fulfillment followed
an orderly flow in which transactions were simply “pushed”
from one part of the supply chain to the next. Retailers
ordered items from vendors, who shipped to the distribution
center (DC), and the DC shipped the items to stores as inven-
tory was needed. Customers bought their merchandise at the
store, and returned it there, too, if necessary. That system
just doesn’t work in an omnichannel consumer world.
E‐commerce pioneers tried to shift this traditional model by
either setting up web operations under a separate business
organization and fulfillment infrastructure, or outsourcing
these functions to best‐in‐class third‐party providers. By
avoiding complex systems and supply chain integration with
the retailer’s traditional business, the result was simpler ful-
fillment and greater speed to market.
Such approaches have significant downsides, though. They
isolate the customer experience between channels, create
duplicate inventory centers, and prevent retailers from meet-
ing demand from the most appropriate inventory source —
whether that’s the store, the DC, or the supplier. Sometimes
these earlier approaches have backfired, especially during the
holiday shopping season when fulfillment centers were over-
whelmed with orders.
Analytics: Providing Visibility
with Inventory Data
Consumers have certainly raised the bar with regard to their
expectations around an item’s availability. That’s forcing
retailers and suppliers to focus on the visibility and accuracy
of data about quantity and location.

Omnichannel shoppers can easily pull out their smartphones
to comparison shop on another retailer’s website, or even
search available stock at nearby stores. If a retailer doesn’t
carry the precise item the customer wants at the right price,
or if that item is out of stock, customers are likely to take their
business elsewhere with the swipe of a finger.
Traditional item management and fulfillment systems such
as catalogs and EDI were never designed to include item
inventory and location as an essential attribute. The result:
Retailers and suppliers exchanged a finite set of data through
legacy catalogs — but that data lacked visibility into inven-
tory on hand.
In today’s retail marketplace, item location powers fulfillment
and drives profit. After all, why fulfill an order originating in
San Francisco from a warehouse in Florida, if a warehouse in
Los Angeles also has the item?
Sharing item data is at the center of providing more relevant
shopping experiences for consumers, no matter where they
choose to shop. The key to success is to drive item data shar-
ing via automation. That allows retailers to instantly update
and incorporate accurate item information from their suppli-
ers, and suppliers can automatically publish their latest item
information to retailers.
Effective data sharing can help retailers and their trading
communities gain more insight into who customers are and
what they’re purchasing. They must achieve a common view
of item sell‐through and inventory levels. All trading partners
need to collaborate on data about both demand and the fulfill-
ment of orders, across all channels.
Building the Backbone of
Omnichannel Retail
Because more and more customers are demanding a seamless
shopping experience across channels, retailers and their trad-
ing communities must support seamless order fulfillment and
returns across channels. If they don’t, they’ll lose out to com-
petitors that do. Savvy retailers are building the backbone of
omnichannel retailing: seamless order fulfillment.

What do customers really want with regard to fulfillment? In
a nutshell, they want multiple delivery options, flexibility on
timing, and no shipping charges. That makes life a lot more
complicated for retailers and suppliers, because all four of the
primary disciplines of order fulfillment — orders, shipments,
payments, and returns — have become substantially more
complex in the omnichannel world.
Delivering the simplicity the customer demands and expects
creates a substantial “ripple of complexity” in the retailer’s
back‐end systems. There are seemingly endless fulfillment
alternatives, because the technology and behavioral land-
scapes of retailing are changing so rapidly.
Retailers with legacy back‐end system architectures and
business processes will find that they’re less prepared to
support this kind of complexity. As e‐commerce has become
mobile commerce, many retailers are struggling to meet these
needs using legacy systems.
From its initial forays into e‐commerce fulfillment, the
industry has learned not to build isolated processes and
infrastructure that inherently don’t scale to unanticipated
requirements. Instead, retailers are embracing a single
process and infrastructure that supports growing, changing
fulfillment requirements.
Scenarios like these are becoming the new normal.
Consumers will:
✓✓ Buy an item online and pick it up in store.
✓✓ Try an item in store and have it delivered at home if the
exact item is out of stock.
✓✓ Use a mobile device to make sure the item is in stock,
check shipping costs, and pay for the item on a mobile
commerce site.
✓✓ Order online, have an item delivered at home, and return
it to a store if it doesn’t meet their expectations.

DiscoveringthePower
of Collaboration
In This Chapter
▶▶ Navigating fulfillment channels and decisions
▶▶ Tapping into the synergies of collaboration
▶▶ Unlocking the power of collaboration and growth
▶▶ Overcoming data analytics complexities
Executing an omnichannel strategy is a balancing act.
On one side of the table, retailers want to place greater
merchandise assortments online to reduce the need to hold
all the inventory, even as they strive to maintain just the right
amount of stock in the store. On the other side, fulfilling the
order — regardless of where it originated — means weighing
the costs and customer‐service impact of holding inventory in
the store versus fulfilling the order from a distribution center
(DC) or directly from the vendor.
There’s a fine line between missing an order because an item
is out of stock, or holding too much inventory and wind-
ing up with discounted overstocks. Complicating matters
are customers who keep raising the bar regarding shipping,
expecting near‐real‐time delivery to their homes.
What’s the answer? Retailers and their supplier communi-
ties must collaborate. They must master real‐time inventory
visibility linked to robust sources of item information. They
have to align around a common assortment strategy, allowing
retailers and suppliers to market their products more effec-
tively and together sell more items. And they must achieve
seamless order fulfillment across all shopping channels.
Chapter 3

This chapter explores the benefits and challenges of
collaboration.
Navigating Inventory Decisions
Customers’ capability to buy what, where, and when they
want makes it increasingly daunting for retailers and their
vendor communities to capture sales. Multiple channels
deliver more choices and make information available anytime,
anywhere, and on any device. This accessibility has leveled
price points. Retailers must find new ways to meet consumer
demand that can change with the touch of a screen — and
that means navigating fulfillment channels and decisions.
Inventory options to ponder
Even in a relatively simple scenario with a typical omnichan-
nel consumer, retailers must make numerous decisions about
how to fulfill the order:
✓✓ Is there inventory to fulfill this order in the time frame
the customer expects it?
✓✓ If the customer is on a mobile device, does she see the
same inventory level as someone on a laptop or a sales
associate in a physical store?
✓✓ If a customer places an order online to be picked up in
the store, should this order be shipped from the distribu-
tion center or from another store nearby?
✓✓ Should it be shipped directly from the vendor to the
store?
✓✓ How much more inventory of this item should be
ordered? For what location?
There are similar questions if the item is returned:
✓✓ Should the returned item be kept in the store?
✓✓ Should it be shipped back to the warehouse?
✓✓ Should it shipped back to the supplier?

�� Chapter 3: Discovering the Power of Collaboration 19
✓✓ From where should the customer’s replacement item be
sent?
✓✓ How should shipping costs on the return be handled?
Balancing inventory demands
across channels
Retailers may have hundreds or even thousands of vendors —
along with extended supply chain partners that include global
trading partners such as 3PLs, factories, and sourcing com-
panies. Given that, it’s a challenge to achieve seamless order
fulfillment across all shopping channels. Retailers can attain
balance with a holistic view of customer demand and inven-
tory. That’s powered by 360‐degree visibility with all down-
stream supply chain partners covering orders, shipments,
payments, and returns.
Giving customers the reins
With the nearly infinite ways an order can be fulfilled in
today’s market, the individual consumer has taken the lead,
setting the tempo of change. That, in turn, has created a
ripple of complexity for all trading partners. Clearly, neither
the store‐based fulfillment model of the past nor the siloed
approaches to e‐commerce will support true omnichannel
fulfillment. Customers need to be at the center of fulfillment.
Tapping into the Synergies of
Collaboration
Growing up, kids are taught the importance of sharing — not
because of how it benefits just one person, but because of the
good it provides everyone. This lesson also applies to rela-
tionships between retailers and their suppliers.
Using up‐to‐date and historical information — especially point
of sale (POS) — not only empowers suppliers to improve
their performance, but it also allows for greater collaboration
between both retailer and supplier. Such partnership helps to
bring the best assortment to the consumer.

Collaboration, especially sharing point-of-sale (POS) and
inventory data, is the easiest place to begin the partnership.
But here’s the question: When you’re looking to team up with
suppliers on new products or new promotions, how do you
both measure success?
The Power of Collaboration
and Growth
Retailers’ assortment planning used to be relatively straight-
forward and directed internally, focusing mostly on histori-
cal sales and pricing. It’s not so simple anymore, because
putting the customer at the center means assortment plan-
ning requires considering all kinds of things, including trans-
actional information, demographic data, and social media
comments. It requires the best insight of the supplier (who
knows the target customer’s needs) and the retailer (who
understands merchandising in its stores).
Crunch all this data with the right tools and feed the results
to the right people, and you’ll end up with better item sell‐
through and higher profits. Harness big data and you can
grow your operating margins by as much as 60 percent, some
industry experts suggest.
Beyond analyzing big data, retailers must concentrate on the
data that must be shared among trading partners and across
the retailer’s organization.
Overcoming Data Analytics
Complexities
Retailers and their trading communities often struggle to
answer two simple questions:
✓✓ Where are the customers?
✓✓ What are they buying?

�� Chapter 3: Discovering the Power of Collaboration 21
To answer these questions, it requires a common view of
item sell‐through and inventory levels that are shared across
trading partners. And all parties must agree that the data is
the “single version of the truth” that will be used as the gold
standard when making decisions. This common view of inven-
tory includes data about both demand and the fulfillment of
orders, across all shopping channels.
Why silos don’t work
Many merchants in today’s retail environment rely on a siloed
approach that has separate teams and systems manage data
for in‐store sales, mobile commerce, and e‐commerce. These
systems may not even be able to recognize when the same
item is being sold across multiple channels. That makes it
nearly impossible to achieve the goal of a seamless customer
shopping experience.
As if managing data within their own organizations isn’t com-
plicated enough, retailers also must manage the complexity of
exchanging data with their trading partners. These communi-
ties may include hundreds or thousands of vendors, as well as
extended supply chain partners such as third‐party logistics
providers, sourcing companies, and factories. Each has its
own systems and processes for managing data.
This leads to three interrelated challenges:
✓✓ Capturing the right data from all trading partners
✓✓ Normalizing the data across trading partners to
understand aggregate performance
✓✓ Turning the data into actionable information to drive
decision-making by the retailer and supplier
Building inventory intelligence
from trading partner data
Retailers, suppliers, and other trading partners exchange
millions of transactions every single day, spanning the entire
life cycle of trading partner relationships. Such information

covers everything from sourcing and onboarding a new
vendor to provisioning items and fulfilling an order.
This type of shared information offers all kinds of often
untapped potential to gain insights into sales velocity and
inventory trends. Pull together all this intercompany data
from across channels — and from across trading partners —
and you’ll have the foundation for the 360‐degree view of
inventory you need.

AnatomyofOmnichannel
RetailSupplyChains
In This Chapter
▶▶ Operationalizing omnichannel retail
▶▶ Joining a retail network
▶▶ Tapping into cloud services
▶▶ Building an omnichannel ecosystem
What’s the opposite of omnichannel? Unichannel.
That’s the word that describes the business process
and technology architecture guiding most retailers today.
The design assumption behind their infrastructure is that
shoppers will research, select, and pay for an order using a
single shopping channel, and that same channel will then ful-
fill the order. In reality, though, modern consumers may see
an ad on the way home from work, search their mobile device
for the product while sitting at a red light, take a closer look
on their PC when they get home, then pick up the item at the
nearest store.
Most retailers and their suppliers know this, of course,
and don’t really need to be convinced that focusing on the
omnichannel customer is the right move, given the competi-
tive environment. But they may be less clear about how to
organize the supply chain and what technologies are neces-
sary to drive success. As discussed elsewhere in this book,
sourcing, assortment, fulfillment, analytics, and community
are vital to the end game.
Chapter 4

This chapter covers operationalizing omnichannel retailing,
learning how to reinvent retail business processes, and deter-
mining where retail business networks — retail communities
that follow principles similar to popular social networks — fit
into the big picture.
Operationalizing Omnichannel
Retail
There’s no time like the present for retailers and suppliers to
“operationalize” omnichannel within their organizations. The
good news is that the process will drive plenty of efficiencies
and increase profits. The bad news is the transformation will
put enormous pressure on retail trading partners to literally
reinvent the way they do business. But everyone involved will
find that it’s worth it in the end.
Simply stated, if you hope to remain competitive in the
months and years ahead, reinventing business processes
isn’t a choice. It’s an absolute must for staying relevant in a
digital commerce world heavily influenced by such retailers
as Amazon, and gaining the critical advantage required for
success.
Today’s consumers have clear expectations that the items
they want to purchase will be available within hours or days,
and that the items will be competitively priced regardless of
where they’re shopping. What’s more, the consumer expects
that an in‐store experience can deliver value beyond merely
viewing — or even handling — items in person. Omnichannel
consumers expect elements of a digital experience that
complement what happens in the store, ensuring a successful
purchase.
In order for retailers and suppliers to deliver the omnichannel
experience their customers expect — and, yes, demand —
organizations need to reinvent business processes for:
✓✓ Sourcing: The process companies use to discover
new trading partners offering desired products and
services that meet specific fulfillment, item, and other
requirements.

�� Chapter 4: Anatomy of Omnichannel Retail Supply Chains 25
✓✓ Assortment: The means used to enable rapid, new‐item
setups and automate change management of item infor-
mation among trading partners.
✓✓ Fulfillment: The end‐to‐end process of fulfilling the order
to the consumer, including orders, shipments, payments,
and returns.
✓✓ Analytics: Analysis of trading partner data used to
improve sales velocity, balance inventory levels with
demand, and enhance fulfillment performance.
✓✓ Community: The process retailers, suppliers, and other
trading partners use to integrate with each other to
activate usage of the retail business network with a new
company.
You’ll find additional information about these areas in
Chapter 3.
Join a Retail Network
Knowing how much the advent of social media has revolution-
ized the ways people connect and share news and views, it’s
no surprise that there’s a somewhat similar new model for
addressing the omnichannel challenges facing both retail-
ers and their trading partners. Retail networks are inherently
connected communities that follow principles similar to such
popular social networks as Facebook and LinkedIn. Just as
consumer‐based social networks have become ubiquitous
outside of the work environment, these business‐based net-
works will become part of the fabric, reshaping the way retail
companies work together.
Retail networks make it possible for everyone in a particular
trading partner community to share a common language,
exchange information they care about, and measure perfor-
mance against mutually agreed‐on goals. These networks are
open to all companies in a given industry, and they’re imme-
diately integrated with every other member of the community
as long as all parties agree.

Relieving retail pressures
Retail networks are a way to relieve the pressures on retailers
and their trading partners around sourcing, assortment, fulfill-
ment, and analysis in an omnichannel environment.
Because members are preintegrated with each other, sourc-
ing new trading partners becomes as easy as searching for
former colleagues and connecting with them on LinkedIn.
Assortment is streamlined because vendors’ entire prod-
uct lines are uploaded into their profiles on the network.
Fulfillment becomes virtually plug‐and‐play, because trad-
ing partners’ order fulfillment preferences, requirements,
and capabilities are already known and proven to the entire
community.
Building blocks of retail
networks
Retail networks have three key components, which work
together to help retail trading partners execute an omnichan-
nel strategy. These components include:
✓✓ Platform: A retail network includes an engine, the
network, and a graph‐based architecture.
✓✓ Development environment: The network enables
third‐party developers and IT departments to leverage
prebuilt APIs to create applications that integrate with
the platform.
✓✓ Business applications: The network allows trading part-
ners to find, evaluate, and install prebuilt applications
for their business needs.
Cloud Services Speed
the Transformation
Although every retail trading partner has its own way of doing
business, all partners share a need for services that automate
common business‐to‐business transactions. Retail networks

include a prebuilt suite of shared cloud services that are easy
to access and use, regardless of what other systems or pro-
cesses the trading partner has in place.
There are lots of great reasons for tapping into the cloud
as part of the solution. Reputable cloud solution providers
deliver the cleanest and most compliant data, and they ensure
that the experience is consistent across a large swath of the
supply chain. And the suite of capabilities and services they
provide can really make things run a lot more smoothly for
vendors and retailers alike.
These cloud services use a multitenant model, making them
available to all users. That way, trading partners don’t have to
develop their own solutions or buy and maintain on‐premise
software. What’s more, the services are continuously updated
and refined, and because they’re there for everyone, that
means everyone benefits from the latest innovations. These
shared services include:
✓✓ Communications service: Enables a variety of methods
of communications among trading partners, including
AS/2, value‐added networks (VANs), and APIs.
✓✓ Workflow service: Orchestrates the processing of docu-
ments and data through the platform, managing queues,
and order‐of‐operation flows.
✓✓ Transformation service: Translates transaction data into
a standardized format, and manages and tests trading
partner maps.
✓✓ Information service: Delivers information in the form of
reports, analytics, and data in response to both human
and application requests supporting the business
processes of trading partner.
Building an Omnichannel
Ecosystem
Retail networks delivered by cloud service providers can
make a huge difference, but omnichannel still may turn out
to be harder than you expected to get up and running. That
doesn’t mean you should ignore the efficiencies and, most

important, consumer demands for an omnichannel experi-
ence. No matter how challenging omnichannel may be to
bring about, the bottom line is that the ecosystem needs to
move quickly to satisfy today’s consumers — whose choices
are endless but whose patience is slim.
SPS Commerce asked Retail Systems Research (RSR) to con-
duct a survey of retailers, and from the findings distilled five
key recommendations to help retailers navigate challenges.
Read on to tap into the advice.
Build the foundation first
It makes sense to start with the foundation, and in this case
that means getting more clarity on such things as supply
chain visibility and collaboration. You may think you can just
launch into sophisticated capabilities such as drop ship and
an expanded assortment, and that doing so will easily drag
those foundational elements along. In reality, that’s a very
risky strategy.
Share product information
efficiently
Everyone’s accustomed to and comfortable with spread-
sheets, catalogs, and emails, which is why they’re the most
popular tools for sharing product information. They also
happen to be the least efficient. There are far better tools out
there, and it’s incredibly important to use them.
It’s really no longer feasible to just muscle your way to
omnichannel consistency. It’s time, instead, to embrace
newer technologies in order to streamline data exchange in a
timelier manner, and to include such attributes as customer
reviews, which shoppers love.
Break free of the barriers of
legacy systems
RSR does lots of surveys, and just about all the time retailers
report that legacy systems are cramping their style. Does that

mean you need to replace foundational systems? That may be
justifiable, but it’s also a big, time‐consuming ordeal, and in
the ever‐changing omnichannel world, 18 months is a lifetime.
A shorter term option is to integrate so that new applications
can work together more effectively.
You may have trouble getting senior management onboard
with this kind of initiative that may not have an obvious
short‐term value. Educate them on why it’s so important! Get
the execs to mandate the change, and that’ll help get the line
managers onboard, too.
Think before expanding
assortments
Much as everyone wants to be all things to all people, it’s not
a great way to be profitable. Given that, it would be best for
manufacturers and vendors to put on the brakes a bit when
it comes to expanding their assortments. Retailers aren’t
demanding that expansion, and there are studies suggesting
that a more‐curated assortment is more desirable to consum-
ers, especially those shopping in stores. Expanding the port-
folio sure seems like a great idea, but it may not actually lead
to any noticeable gains in profitability. So, don’t just jump into
new product lines — do the math first.
Logistics can lead the way
Logistics providers are in a great position in this new envi-
ronment. Retailers are focusing their attention on satisfying
omnichannel selling needs, while vendors are busily trying
to balance becoming retailers without alienating their retail
partners. Logistics service providers, meanwhile, have a real
opportunity to define their roles in enabling omnichannel.
Whatever that role is, it means doing business differently.
Most likely it’ll entail more of a focus on services and the
technologies that enable them, not just continuing to beef up
warehousing capabilities, which is something vendors and
retailers alike are trying to avoid. Logistics for omnichannel is
exponentially more complex, and experienced logistics com-
panies can alleviate the fulfillment burdens on suppliers and
retailers so they can focus more squarely on the consumer.

There’s a lot to think about in the world of omnichannel, and
it’s easy to get bogged down in all these questions. But it’s
critical to never forget who it is that you’re doing all this for:
the consumer. No one should lose sight of the consumer.

DrivingGrowthwith
Data andIntelligence
In This Chapter
▶▶ Making trading partner connections easier
▶▶ Realizing the power of commerce graphs
▶▶ Tapping into cloud and multitenant services
It’s challenging to succeed in the omnichannel world if
you’re out there on your own. Good thing there are lots of
partners that’ll journey with you. But you won’t get far if your
business systems aren’t speaking the same language so they
can share data and intelligence.
Sounds complicated, but it doesn’t have to be. In fact, once a
trading partner integrates its business system — such as an
accounting, enterprise resource planning (ERP), warehouse
management service (WMS), or transportation management
system (TMS) — to a retail network using what’s known as a
canonical standard, it’s immediately possible to connect to
every trading partner in the network.
And once those connections are made, data sharing is simple
and trading partners are well on their way to serving the
omnichannel consumer’s needs. This chapter explores how to
enable these vital trading partner connections, find and make
powerful new relationships, and use cloud and multitenant
services to further drive growth.
Chapter 5

Trading Partner Connections
Made Easy
The most efficient way to enable powerful, information‐
sharing partner connections is by using prebuilt integrations.
That’s exactly what the retail network sets out to do, using
a standard integration approach to dramatically streamline
omnichannel integration. That makes it a whole lot easier to
exchange data.
Using prebuilt integrations through the retail network can
dramatically streamline order fulfillment. With just one con-
nection to the network, suppliers can instantly comply with
all their retailers’ current and future trading requirements.
Using this single connection eliminates the need for ongoing
updates, as well as the need to retest integrations when retail-
ers change their specifications. The network always incorpo-
rates the latest standard from the retailer, so these kinds of
complications don’t happen.
Simplifying information sharing
A key to making all of this work is the canonical data model.
The standard canonical format makes it possible for trading
partners to exchange data. That, in turn, solves sourcing chal-
lenges for retailers, allowing them to speed time‐to‐market for
provisioning new items.
For those feeling hemmed in by the limitations of legacy data
exchange methods such as EDI, canonical standards can
provide a solution. They can expand the universe of item
attributes that can be included in the exchange while still
complying with the retailer’s item standards. There’s more on
item attributes in Chapter 2.
By providing a standardized and reusable data exchange pro-
tocol for trading partners, a canonical data model is a critical
element of retail networks.

�� Chapter 5: Driving Growth with Data and Intelligence 33
Streamlining omnichannel
integration
Suppliers in the past have always created individual point‐to‐
point integrations, or “maps,” for each retail trading partner.
The problem with this approach is that it required creating
a new map every time the supplier landed a new retail cus-
tomer. What’s more, every time an existing retail customer
changed its requirements, the supplier would have to update
the integration to ensure fulfillment is still in compliance.
In the traditional model, this cycle of creating and updating
point‐to‐point maps would have to be repeated for each new
retail customer and each change required by an existing retail
partner. Not only is that a lot of work, but every specification
change would introduce risk into the supply chain because
a new map must be validated to ensure the integration per-
forms as expected. Because of how complex and fast‐paced
the omnichannel world tends to be, the point‐to‐point integra-
tion model has become untenable.
Racing to the rescue are canonical data standards. They guide
the way for normalizing to a standardized XML structure both
the data output from trading partners and the data input to
trading partners. Doesn’t matter what applications they run —
all trading partners gain an agreed‐upon, consistent method to
exchange information.
Commerce Graphs Empower
Intelligent Relationships
Just as social networks bring individuals together with friends
and colleagues into networks of relationships, retail networks
enable relationships and interactions between retail business
partners. How are the various players connected? The world
of computing relies on a graph architecture to track how
these relationships are mapped and delineated.

Among consumers on the Internet, this network of relation-
ships is known as a social graph. The social graph gathers
details about the personal relationships associated with each
member, which is really useful for identifying highly relevant
new relationships. You’ve probably had LinkedIn or Facebook
suggest new connections and friends, and these potential rela-
tionships that automatically pop up can be pretty astute and
amazing.
Similarly, a commerce graph maps out the network of relation-
ships involving retail supply chain partners. A retail business
network tracks the set of relationships among all global trad-
ing partners on the network, and has insight into their inter-
connected relationships.
A real key to the value here is that the commerce graph
becomes an increasingly rich source of big data. It includes
metrics on all business dimensions, and it associates trading
partners with the items they buy or sell, knows their capabili-
ties, and is aware of the history of each relationship.
The value of modeling trading
partner relationships
The commerce graph looks both upstream and downstream
throughout the retail supply chain as it models relationships.
Its data collection includes retailers and suppliers, and covers
their connections with other trading partners, the transac-
tions they process, the items they sell, the fulfillment models
they use, and a whole lot more.
Stop to think about it, and it’s clear that a graph‐based supply
chain architecture unlocks many powerful capabilities that
are essential to omnichannel retail. Among the most impor-
tant are speed and agility. Plug into this revolution and you
can slash the time required to establish retailing relation-
ships, while amplifying your capability to adapt to changing
customer preferences. In fact, you can’t deliver omnichannel
capabilities without a graph architecture.

�� Chapter 5: Driving Growth with Data and Intelligence 35
Amazing ways to make
new connections
Think again about how easy it is on Facebook to happen
across not just childhood friends you haven’t seen in years,
but also new folks you never knew before — people with a
lot of common interests and values. These new people can
become fast new friends, both on Facebook and in real life.
Now imagine how the commerce graph might be able to do
the same thing, connecting you with trading partners you
didn’t really know before. It’s powerful stuff.
Thanks to the commerce graph, both retailers and suppli-
ers can quickly discover new relationships and connections,
based on the characteristics of their other relationships.
It’s a real game‐changer when it comes to the sourcing
process, and onboarding a new vendor or adding a new item
becomes as easy as adding a friend or updating your status
on Facebook.
The commerce graph can make powerful predictive asso-
ciations between and among trading partners just like on
Facebook and LinkedIn.
For example, the graph is empowered by knowledge that a
particular item being sold by one retailer is highly correlated
to the sell‐through of a related item. That knowledge helps the
retailer identify providers of that new item. Similar predictive
associations are great for a supplier, too, as it tries to identify
new retailers that might be interested in the supplier’s item
assortment.
A window into rich historical data
Order fulfillment becomes simpler with the help of a com-
merce graph, because it has extensive historical data from
every participating company’s transactions on the network.
That allows suppliers to view retailers’ historical fulfillment
requirements, while retailers are able to scan through suppli-
ers’ historical fulfillment performance and capabilities.

With all that rich data out there, applications related to sourc-
ing, assortment, and fulfillment have lots of great intelligence
to work with. Users can then sort through the vast quantities of
information flowing through the network with ease and agility.
The Power of Cloud and
Multitenant Services
Two more technological advances add to the toolbox help-
ing retail businesses position themselves for success in
the omnichannel world: cloud computing and multitenant
services.
On‐premise legacy software can be found across the retail
landscape, just like most every other business environment.
But cloud services are rapidly replacing these legacy applica-
tions, and that revolution is giving companies new flexibility
for adapting to the changing needs of customers.
There are lots of benefits. Cloud applications are often much
more accessible across multiple locations and devices, they
can be much easier to implement, they’re often more scalable,
they’re automatically updated and upgraded, and in many
instances, they’re easier on the budget.
Multitenant services share a lot of the same advantages. And
by bringing trading partners together onto a common, shared
platform, they can ease the path of integration.
Joining a retail network allows organizations to access these
kinds of modern, powerful technologies that will supercharge
their trading relationships, even as they retain their existing
infrastructure. It’s the best of all worlds!

GettingStarted
In This Chapter
▶▶ Working in unison to satisfy omnichannel customers
▶▶ Reinventing key business processes
▶▶ Making vendor onboarding simple
Don’t think of the omnichannel revolution as something
that’s on the way, because the truth is, it’s here already.
As retailers and their trading partners have realized, the term
really just describes the kind of simple, powerful, seamless
shopping experience people want, one that’s consistent wher-
ever and however they encounter the seller. Omnichannel is
an 11‐letter word for a way to give customers exactly what
they want — when and where they want it.
Simple enough, but it has created a transformation in the
speed and flow of retail. What’s simple and seamless on the
customer end has never been more complex for you and your
trading partners, as you work across shopping channels to
be what the customer demands. Fortunately, retail networks
are there to help you build more collaborative trading partner
relationships.
This chapter gets the ball rolling with a look at working with
trading partners on omnichannel retail, reinventing key busi-
ness processes, and simplifying the process of onboarding
new partners.
Chapter 6

Work in Unison to Satisfy
Omnichannel Customers
Where do you need to focus your efforts to satisfy the
demands of omnichannel consumers? Some companies have
offered excellent advice to retailers about reinventing such
front‐office functions as merchandising, marketing, sales, and
customer service. Others suggest streamlining back‐office
functions such as IT, finance, and operations. So is the front
office the place to begin, or the back office?
The answer is “yes” and “yes.” You need all these improve-
ments, and they need to work in unison if you’re going to
deliver what the omnichannel consumer demands.
But it’s not just about you. You also must look beyond your
four walls in order to get to true integration across shopping
channels, including physical and digital commerce. That
means reinventing your relationships with other companies,
too, including your retail customers, suppliers, logistics pro-
viders, and other trading partners.
You’re never going to successfully navigate the complexity
of the omnichannel landscape unless you take a “networked”
approach to the relationships you have with your trading
community. For more on how to make this happen, check out
Chapter 4.
Reinvent Your Key Business
Processes
The omnichannel world demands that retailers and suppliers
reinvent business processes for sourcing, assortment, fulfill-
ment, analytics, and community. (There’s more on that in
Chapters 2 and 4, by the way.)
That reinvention begins with the way you find new trading
partners that align with your very specific requirements, from
fulfillment to inventory visibility and more. You’ll also have
to think differently about how you approach the assortment
challenge — you’re going to come to love automation.

�� Chapter 6: Getting Started 39
In fact, you need to view the entire fulfillment process — from
orders to shipments to payment to returns — through the
lens of omnichannel retail customers and their expectations.
Meanwhile, ongoing analysis will help you drive efficiencies
and boost the bottom line. The common thread weaving
through all of this is community. It’s critical that retailers,
suppliers, logistics firms, and other trading partners work
closely together, because all will benefit.
There’s no time to lose. Consumers have less and less
patience for brands that don’t give them what they want on
the terms they set, and as their patience wanes, so does their
loyalty. That means retailers and suppliers can’t afford to
dawdle. Omnichannel isn’t an easy journey, but it’s an essen-
tial one for retailer organizations that want to be around for
the long haul, and the time to begin that journey is now.
Make Vendor Onboarding Simple
Say you’re a retailer and you’ve found a vendor that fits your
product and technical requirements. Now you need to set up
integration so your business systems can exchange supply
chain data, such as item information, invoices, purchase
orders, and shipping notices.
The supplier usually carries the burden of developing and
maintaining these integrations. The requirements for integra-
tion may span hundreds of pages for each retailer, and they
typically spell out extensive retailer‐specific rules for work-
flow and documentation.
If that sounds complicated, well, it is. Building point‐to‐point
integrations isn’t easy, so it can take many months and a lot of
the supplier’s IT resources to develop a new trading relation-
ship. Trading partner integration using legacy methods can be
especially complex, slowing growth for both the supplier and
the retailer.
That makes it a strategic necessity to streamline the integra-
tion process, because consumers don’t want to wait. They
want new products, and they want them now. Suppliers and
retailers must be able to instantly connect with one another
and provision new items electronically. It just doesn’t work to
have to create a new project for the IT department each time.

That’s where the retail network can come to the rescue. With
prebuilt integrations, the network can dramatically streamline
order fulfillment, reducing the complexity of exchanging data
by using a standard integration approach.
The need to lean on the retail network for this kind of techni-
cal sophistication really underscores just how important it
is to pick the right retail network. You need one with critical
mass, one with lots of members with whom you can connect
in this streamlined manner. Find the biggest appropriate
network, and sign up!

TenKeystoOmnichannel
Success
In This Chapter
▶▶ Connecting with consumers
▶▶ Reinventing fulfillment, assortment, sourcing, and analytics for
omnichannel
▶▶ Participating in the omnichannel community of leaders
To manage an omnichannel transformation, your business
needs to handle all the options customers want across
several channels, while also offering more products and col-
laborating with more partners. How do you keep everything
humming along smoothly? Here are some thoughts.
Focus on the Consumer at
All Times
The customer should always be the top priority and the first
and only focus — there is no second focus. Omnichannel
retail is all about making sure customers can buy:
✓✓ The items they want: As customers’ capability to research
and compare items becomes easier, you increase your
competitive edge by increasing your assortment of items
and the product details of those items.
✓✓ When they want to buy them: Customers want to know
ahead of time how and when you’ll fulfill their order. You
need to update product availability in real time.
Chapter 7

✓✓ Where they want to buy them: Be ready to take orders
from wherever customers may be: their computers, their
mobile devices, or in your stores.
Multiple Channels, One
Experience
You’re not selling products via mobile, e‐commerce, or your
brick‐and‐mortar store. You’re selling on all channels at once,
offering a cohesive shopping experience.
When all retail channels are integrated, you improve your
capability to close the sale. For example, you want customers
to be able to buy an item online and pick it up in the store. Or
if a customer is in the store but an exact item is out of stock,
make sure the consumer can order the item and deliver it to
his home or find it today in another store nearby.
Fulfill Orders Seamlessly
Your customers want options for delivery, timing, shipping
charges, and returns. An omnichannel supply chain is ready
to deliver these options and handle the complexities on the
back end. Fulfillment must match what the customer wants
and demands, not just what you’ve been capable of delivering
in the past.
Define Assortments Based
on Data
Omnichannel retail provides big data on sales trends, giving
you a 360‐degree view of all your retail channels and custom-
ers. You can tap that data for sales trends. Rather than rely
solely on historical sales and pricing, you can also personal-
ize product promotions based on customers’ demographics,
buying trends, and online feedback.

�� Chapter 7: Ten Keys to Omnichannel Success 43
Give Consumers Lots of Details
Always provide more product details than you think the
consumer needs. You won’t be sorry. Customers always want
more, and they’ll buy from the venue offering the most infor-
mation. Combine the item data traditionally available in retail
and online channels, including customer reviews, videos, and
shipping details.
Share Data with Partners
You do this via retail networks. By joining a network, retail
companies agree to exchange the information that’s important
to fulfill orders efficiently while tracking their sales, perfor-
mance, and mutual goals. The network is capable of handling
data about the members’ products, trading requirements,
inventory, and more. With all that data at your fingertips,
you’ll be far better equipped to understand the consumer and
boost your sales.
Source Items and Suppliers
How do you handle the increased demand for products,
delivery options, and timing? Retail networks are the answer
here, too. Because members are already integrated and shar-
ing data, it’s a whole lot easier to find vendors that offer the
products your customers want and that can fulfill orders how
and when your consumers need them.
Look to the Cloud
Your company has its way of doing business, and your supply
chain partners have theirs. The cloud allows you to integrate
with partners easily and with minimal impact on your inter-
nal systems. More important, cloud solutions offer agility,
advanced capabilities, and collaborative communities beyond
those possible with traditional software. The integration that
must happen to make omnichannel work isn’t likely to happen
with on‐premise software — the cloud is the answer.

Show Me the Inventory
Your mission is to enable both customers and partners to see
your inventory across all shopping channels. In doing so, your
company can:
✓✓ Enable customers to find a product when and where
they want it. For example, customers may shop online
to see whether your store carries an item, because they
need it right away and want to pick it up in‐store. When
your supply chain can deliver real‐time data, customers
can find out right away which of your stores has an item
in‐stock or elect to order it online.
✓✓ Improve your agility in the supply chain. For example,
your sales staff can help a customer in your store even if
the item isn’t in stock, because you have real‐time access
to inventory throughout your retail network.
Connect with the Cutting Edge
A retail network connects you with all kinds of advanced
capabilities, from cloud and multitenant services to prebuilt
integration to the capability to source new items and onboard
new partners with lightning speed. That’s the future at work,
here in the present day. And you really need to tap into that
future right now if you’re going to keep up with the never‐
ending changes that consumers are forcing.
But don’t forget the more traditional benefits associated with
business networks. A retail network helps you connect and
engage with peers and leaders in the omnichannel world. You
can plug into the expertise of business and industry analysts
and cloud computing gurus. You can expand your insights at
industry events focused on omnichannel retailing. You can
even multiply your newfound retail network peers by also
connecting with them on social media. Omnichannel retail is
all about networking.

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