New omnichannel concepts blend machine-generated data and analytics into a centralized scheme that can help retailers get a composite view of their customers.
For most retailers, physical presence still matters. To illustrate, in Q3 2015, US census figures revealed that $87.5 billion was done in e-commerce sales, but that in toto, e-commerce sales represented only 7.4% of total US retail revenue (PDF).
Retailers are aware of this, which is why the concept of an "omnichannel" — that is, the ability to interact effectively with customers through any virtual or physical channel — is important. The goal of the omnichannel is to create total visibility of everything a customer does with the retailer, regardless of the channel of interaction, so that the retailer and the customer are always on the same page.
A critical element of the omnichannel approach is analytics — both at the individual customer level and at broader levels of what customers are buying at certain locales and at certain times of day. If a retailer can get a grasp of the latter, it is in a better position to understand how it can best reach out to customers through e-commerce, and also through the strategic positioning of physical stores that will garner the most trade.
On the analytics front, data about customer behaviors and sales from store and e-commerce points must be able to be easily aggregated so retailers can see a 360-degree picture of what is going on. This feat of remaining omnipresent to a consumer everywhere and on all channels is easier said than done.
In some cases, inventories are distributed and stored differently for the e-commerce and brick-and-mortar phases of the business; in other cases, e-commerce and brick-and-mortar run on different technology platforms and use different business processes. In the most extreme cases, the e-commerce and brick-and-mortar businesses operate as separate, unconnected companies under an overall enterprise structure, and they don't share their data. The good news is innovative approaches continue to emerge.
One innovative approach to retail selling
WIB (warehouse in a box) is an Italian-based company that blended the concept of e-commerce, brick-and-mortar, and big data/analytics into a retail strategy that enables companies to expand physical presence yet minimize operating costs as they engage with consumers via e-commerce and capitalize on analytics and big data.
"Most retailers are not going to exclusively operate over just e-commerce or just brick-and-mortar, so our goal was to create a product where consumers could easily order via their smartphone but also receive their order almost immediately by picking it up within minutes of their order," said Nino Lo Iacono, WIB's CEO.
WIB sells a portable storefront that a retailer can place inside a train or a subway station, a fitness center, a mall, or any other point of contact with the public where certain products are likely to be sold. Saleable items can range from dinners-to-go, sports drinks, clothing, or virtually anything that a consumer might need.
"Let's say that I am leaving the office and I want to order dinner to go," said Iacono. "I know that I am going to pass the WIB machine run by the retailer I patronize on my way home, so I order the dinner while I am still at my office. I might also order some other groceries or sundries that I need. I pay for the order on my smartphone, receive a code for the machine I am going to stop at, input my code to the machine when I arrive there, and the machines delivers my basket of groceries to me that I take home."
The WIB stations come with individual food and durable goods compartments that can be independently adjusted for temperature and other environmental controls, and the status on these individual compartments is monitored back at headquarters, thanks to the insertion of Internet of Things (IoT) environmental sensors that indicate normal functioning or that flash an alert status that a field technician might need to address.
WIB machines also send the retailer data and analytics about sales, inventories levels, and the technical condition of the WIB unit. The machine-generated data can be readily integrated into composite views of customer and retail channel performance.
"This gives merchants the opportunity to use retail strategies like sales promotions or bundling together certain items for a bonus or incentive," said Iacono. "The retailer also has the flexibility of changing pricing, promotions, discounts, and stocking levels in real-time based on the analytics he is receiving in real-time from a management system that tracks all of the WIB units he has in the field."
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