Thought Leadership

Consumer-Connected RetailAttracting, winning and keeping profitable customers

BY WAY n e U s i e , s e n i o R v i C e p R e s i d e n t, R e tA i l

C onnected, “always-on” consumers are the driving force in retail today. the information they need to make a buying decision can be found in mere seconds. Blogs, websites, online reviews, video rants — and raves — all provide instant insight that shapes what they buy, when and where they buy it, and at what price. empowered and emboldened, these connected consumers expect personalized relationships and offerings delivered through flexible options. they are driving the next generation of retail, prompting retailers to examine all facets of their businesses as a means of survival.

Retailers need to meet the demands of this new consumer while ensuring a positive, consistent shopping experience across multiple channels. in order to remain competitive, companies must adapt and center their organizations around consumer-

centric processes and organizational alignment. today’s retailers must be able to operate in real time to avoid being left behind.

then and nowtraditional retail processes have been

product focused, based on consumer behavior largely driven by an in-store experience, the opinions of a few friends or family

members, and possibly a mass market advertising campaign. As

such, retailers made strategic business decisions using the answers to these

sequential key questions:

• What should I sell?

• Who is my competition?

• What are my constraints?

• Where should I sell this?

• Who is my customer?

A focus on supply chain efficiencies through the years has helped some retailers keep pace. they have adopted some level of sophistication that allows for better demand forecasting, enabling new efficiencies in planning, promotion, pricing, inventory management and transportation. integrating processes, technology and organizational structures has enabled another level of efficiency, yielding lower costs and quicker cycle times. Yet these traditional, linear processes focus on product — not the consumer — making it harder and harder for retailers to stay relevant.

Thought Leadership

today, retail change is being driven by the consumer who expects instant information, a multitude of choices, and flexible, real-time purchase and delivery options. this new, empowered consumer is driven by six moments of influence that present retailers with opportunities for success — and failure. they are:

Awareness — Consumer awareness happens in both traditional and non-traditional ways, including advertising, store displays, promotional emails, web banners, lifestyle blogs, etc.

Exploration — With access to instant product and service information from hundreds of sources via their home computers or mobile devices, consumers can search for products like never before.

Comparison — Consumers can comparison shop online without ever leaving their homes, or instantly check out competitor pricing at the store shelf using their smartphones, making product and pricing transparency an expectation.

Socialization — the rapid rise of social media such as Facebook, twitter, Youtube, etc. means that consumers have access to thousands of user opinions — both positive and negative — prior to making a purchase decision.

Selection — Multi-channel shopping offers consumers with many options for where and when a product can be purchased and delivered.

Communication — After completing a purchase, customers can return to the social media sites that assisted their search to share their experience and opinions with others, promoting awareness and further influencing the buying decisions of other consumers.

With the customer firmly in the driver’s seat, how can a retailer adapt and succeed? They must:

• Manage their business with a consumer — versus a product — focus

• Adapt their culture to support a seamless, consistent cross-channel experience

• Gain a multi-dimensional view of the customer

• eliminate ineffective and disjointed planning processes

• Quickly respond to consumer demand with an agile and optimized supply chain

this requires a new approach — one that allows retailers to attract, win and keep profitable customers. it requires Consumer-Connected Retail.

the next Generation: Consumer-Connected Retailsuccess in a consumer-connected environment requires decisions based on insight into data, instead of decisions based on a combination of art, intuition and system-provided data. While retail systems were originally built to support activities that planners engage in, they now need to provide the intelligence to do those activities themselves. Automation is a key component in this move from person-specific decision making to process-centric and system-enabled decisions. Retailers still want to “set the dials,” but will rely on their systems to do the heavy lifting and provide recommendations — or better still, execute those recommendations to completion.

Retailers must also shift from sequential to iterative processes, allowing for faster adjustments to market changes and supply chain disruptions in real time. sequential processes can slow things down, often requiring that retailers wait until a cycle is complete before they can make plan changes. For example, a company executes on an assortment in the beginning of a season but then finds it is unable to source a percentage of the assortment, and has to re-plan that portion of the offer.

thus, it is critical to evolve to the next level in continuous integrated planning and execution. the new generation of retail solutions enables retailers to sense challenges or opportunities up front and implement plan changes iteratively mid-cycle. this model makes optimal use of retail systems that automate processes and offer recommended actions based on data calculations without requiring users to know and select appropriate algorithms or other necessary criteria. these systems also gradually “learn” and apply these lessons to help effectively manage the retail enterprise more dynamically and with reduced cycle times.

Building a Foundation on Customer experience, product lifecycle and Channel synchronizationsuccess in a consumer-connected retail environment starts with a strong foundation built on the simultaneous management of customer experiences, product lifecycles and channel synchronizations. these three inter-related pillars support a company’s integrated planning and

Thought Leadership

execution processes. strategy and plan information can then be leveraged in a retailer’s systems to map to each strategic area and process in an iterative — instead of sequential — design that supports automation. the ability to manage the strategic customer, product and channel cycles in a continuous fashion that fosters the natural connection points between these pillars is critical to achieving success in consumer-connected retail.

Customer Experience

Customer experience is the most dynamic of the three strategic pillars and drives activity in the product and channel cycles. in managing the customer experience, companies must identify the consumers interested in their offers, market to those consumers and work to convert them into buying customers. they subsequently manage and nurture those customers to maximize retention and loyalty by catering to them on an ongoing basis with their brand and an offer that is of continuous value to them.

engaging today’s consumer is increasingly centered on a personalized approach and direct relationship. shoppers want to know that a retailer is listening to their input, is aware of their needs and is taking action to customize offerings accordingly. With customer insight and a deep understanding of consumer behavior, retailers can tailor promotions and sales tools to specific shopper preferences based on what motivates particular customers.

Product Lifecycle

in managing the product lifecycle, companies create and introduce a new product; leverage their channels to move it into the marketplace; promote, manage and grow it — and at some point, exit with clearance markdowns. the empowered consumer drives the process, ensuring that this cycle consists of much more than simply determining what assortment to carry each season. offering the right products to the right consumer with the price, channel and delivery options they desire requires a true understanding of consumer demand and a personalized strategy across consumer insights, planning, analysis, promotions and distribution.

Channel Synchronization

Channel synchronization consists of seamlessly managing the details in delivering product to the customer. Channels evolve, ebb and flow — and sometimes retailers need to restructure channels and rearrange product flow. Managing this cycle involves the synchronization of two subcomponents:

• Sales channel: includes stores, mobile, Web, wholesale and catalog

• Delivery channel: Represents the process of moving product from the vendor or manufacturer through the distribution network to the store or directly to the customer as appropriate

Thought Leadership

optimal management of this strategic pillar results in the ability to consistently — and profitably — offer customers the products they want across all channels and with seamless delivery, whether it be buying online with in-store delivery, expedited one-day delivery or other possible scenarios.

the Anchor: Customer engagementRetailers seeking customer-centricity in every interaction have much to consider, including:

• the increasing frequency and scope of demand shifts within planning cycles, which commands intelligence during execution to ensure customer satisfaction and profitability

• How to deliver endless aisles — sourcing and delivering from the broadest network in real time to offer greater assortment flexibility and to cement loyalty

• the need to empower store associates with customer, product and availability information that is equal or superior to that accessible to consumers, allowing for increased customer satisfaction

• inventory allocation flexibility and utilization control to meet growing demands

While much effort has been made to capture customer transactions within business intelligence tools, retailers still struggle to deliver that knowledge in real time to those interacting with customers. JdA® Customer engagement, delivered by JdA® Cloud services, is designed to deliver a customer experience that not only builds loyalty, but is profitable too. A single solution that addresses omni-channel commerce and optimization logic in real time, it helps manage not only how retailers deliver goods to customers, but also the supply chain alignment required to effectively supply those goods.

Customers Won’t Wait. Why Should You?traditional retail processes and systems to support those processes are built around putting the right product on the right shelf at the right time and at the right price. the only problem with this “push” model is that it is built on the premise that if you get your offer right, customers will come to you and buy from you.

today’s consumers — hyper-connected and seeking instant gratification — don’t have the time or patience for this old way of retailing. they comparison shop using their mobile devices. Armed with information, they feel empowered to negotiate with your in-store sales associates. they expect you to give them what they want, where and when they want it. they expect to be able to shop seamlessly at home, in-store, in fact everywhere! they expect you to engage with them, not just put products in front of them.

don’t become a victim of the rapidly changing world of customer engagement. the retail models of the past are dying rapidly and your customers will move on if you don’t revitalize the customer experience now. it is time to be a leader — not a follower — in this retail revolution. Your livelihood depends on it.

www.jda.com | info@jda.com | +1 800 479 7382

Wayne Usie is senior vice president, retail, JDA Software. In this role, he is responsible for strengthening executive-level relationships with JDA’s retail customers and key prospects.