Successful omni-channel retailing strategically incorporates brick-and-mortar to leverage real-time data for the entire organization.
Originally published in October 2014 Integrated Solutions For Retailers
By Nancy Chisholm, president, Tyco Retail Solutions
As retailers invest to attract and retain customers with the perfect shopping experience, the brick-and-mortar retail store has become the most critical component of the retail supply chain. The growth of omni-channel shopping has raised customer expectations for convenience, availability, assortment, and price, and retailers are responding by extending the traditional role of their stores to meet customers’ demands to shop — however, whenever, and wherever they choose. Retailers that have made omni-channel retailing a key operational strategy are securing a long, profitable future for their stores.
To position the store at the center of the shopping experience and maximize the potential of expensive investments, retailers must integrate stores into emerging omni-channel frameworks. They need to offer information, interaction, and services that work smoothly across old boundaries. This is accomplished through a realtime data platform that provides visibility into a single version of the truth. According to Hung LeHong, Gartner analyst, in the Real-Time Store Monitoring Platform report, “Combining real-time signals from the store on a consistent platform can help the retailer better understand consumer and store activity.”
Stores have long collected information on inventory, products, orders, employees, and customers from a variety of systems. By combining and analyzing this information from in-store and online systems into an integrated platform, retailers gain clear visibility into their store operations, merchandise performance, and their customers. More than just a new competitive thrust or operational initiative, visibility across the retail enterprise is key to omni-channel retailing and helps keep physical stores strong.
Many stores already have one or more core systems to build on: POS, store traffic, merchandise control, order management, or LP. In most cases, integrating store data delivers near-term benefits such as measurement of conversion, merchandise availability, real-time shrink, staff optimization, and more. The sources of available realtime data from within the retail store also continue to increase. There is great value and real need for a platform that integrates, manages, and interprets real-time information from the store, presenting the results in a comprehensive dashboard view with all interrelated actionable metrics.
Store Traffic’s Link To Out-Of-Stocks
With accurate and consistent real-time visibility across the retail enterprise, retailers can gain an understanding of why an item sells or not, reasons for out-of-stocks, how customers shop, and what and when they buy. For example, by combing store traffic and POS transactions, retailers gain valuable insight into the percentage of shoppers who actually made a purchase; by studying shopper behavior and inventory, retailers better understand the effect of out-of-stock conditions on shopper conversion and can make an accurate correlation of shopper dwell time to item sales. By revealing this valuable, actionable data, retailers can deliver a more personalized, streamlined shopping experience, leading to increased sales and profitability. In addition, by combining inventory and LP, retailers gain insight into item-level theft patterns of organized retail crime groups and percentages of shrink due to internal versus external theft. With this visibility to multisource blended real-time data, retailers can maximize their LP efforts and potentially alert managers to problems as they happen, not after the fact.
By combining store traffic and POS transactions, retailers gain valuable insight into the percentage of shoppers who actually made a purchase.
Visibility into integrated inventory, shrink, and shopper behaviors will deliver operational efficiencies and store performance benefits, driven by:
- Integrated inventory information across all stores, distribution centers, stocking locations, and supply and delivery nodes helping retailers make good on availability promises without the expense of redundant inventory
- Inventory accuracy and visibility helping stores optimize performance of their most important assets, just as matching staffing to shopper traffic optimizes their most important expense
- Blended data from inventory management, LP, and store traffic systems cutting shrink and the risk of loss to make sure the right merchandise gets — and stays — where it can be sold
By gathering and analyzing valuable store performance data, retailers gain enhanced visibility into what’s happening in their stores — and why — to strengthen operations, improve profitability, and gain competitive advantage. Use of an integrated platform to combine data gathered across the entire retail enterprise will empower retailers to realize the full potential of their brick-andmortar stores while increasing sales, preventing loss, and enhancing the overall customer experience.