Expert Interview with Alexis Lecanuet, Executive Partner and Managing Director of Accenture Seamless Retail Services:
What are the major challenges of today’s retailers?
The main challenge is to survive in a highly competitive market. Their ultimate goal is to increase customer wallet share.
How do retailers tackle this challenge?
Retailers have to continually improve retail effectiveness through technology to know customer needs, and provide high-level interaction and customer service.
What are the essentials of a successful OmniChannel retail strategy?
Retailers must consider the following:
1. Develop the Digital Channels
Retailers must develop all digital channels including e-commerce, social commerce and mobile commerce sites to interact with the new generation of digital consumers.
2. Implement Transversal OmniChannel Capabilities
Since digital consumers use multiple channels to do their shopping, retailers must have transversal OmniChannel capabilities across all channels which involves restructuring major business systems:
- Order Management System (OMS) must be transversal. Any person from any channels must have a global view of the inventory to be able to fulfill customer order requests. The stock could be at a warehouse, distribution center, supplier, or at Store A, the OMS must have the capacity to locate and retrieve the stock across channels in real time.
- Product Content Management System must be transversal. There should only be one product database for all channels. Each product shows the same photos, video, description, and technical specifications across channels.
- Customer Insight and Sales Promotion must be transversal. The retailer must be able to collect and analyse customer information to be able to provide the “right” discount voucher that can be used across channels.
3. Accompany the Digital Shoppers. Retailers must accompany customers at each purchase stage by providing information and encouraging the act of purchase in-store. Service offers could range from store locator, geolocation of products, loyalty cards on smartphone, wish list connected to social media network, shopping list, etc.
What platform do you recommend for the retailer to become OmniChannel?
The main objective of all retailers is sales growth but not to be OmniChannel. OmniChannel is a means to achieve sales growth. Retailers can’t set the “means” before “objective”. Retailers can’t continue to exist without sales growth. Retailers can have sales growth but without profit which is the case of Amazon. In the Middle East or in South Africa, increasing physical stores geographically is more effective than being OmniChannel.
There’s not one platform that can do all omnichannel capabilities. It’s a mixture of different platforms. In-store order management system is a back office platform, which is not handled by the e-commerce platform.
What are those platforms then?
Accenture is knowledgeable of the strengths of each platform. We propose the right platform according to the objectives of the retailer, its business size, type of billing system, and whether it’s for local or international purpose.
We propose retailers to use one of the top four platforms available on the market including Oracle ATG, IBM WebSphere, Hybris, Demandware depending on their needs.
Oracle and SAP have robust merchandising platforms.
Hybris has reliable transversal data management system.
Adobe (formerly Neolane) offers solid crosschannel campaign management.
Maxxing provides real-time OmniChannel customer loyalty and sales promotion system.
What’s the role of Accenture?
The role of Accenture is to integrate different platforms used by our clients. We help them decide which platform to integrate that is complementary to their existing system.
What’s the lead time from conception to deployment?
To set up a merchandising system or an e-commerce site end-to-end is about 2 years. Subsequent platform updates will take years.
We are currently working with a Fashion retailer who’s got only physical stores. We are building their online stores and integrating them with their physical stores in 45 countries. This is a 2-year project.
What would you recommend — Cloud or On-Premise solution?
Demandware is a cloud based e-commerce platform which is the best solution for setting up a standalone e-commerce site. The retailer can expand their business very rapidly at an international level, thanks to their Software as a Service (SaaS) delivery model. However, integrating the online store with the rest of the platforms including order, merchandising, and data management systems takes longer.
On the other hand, setting up international e-commerce sites with Oracle’s on-premise solution takes longer than Demandware. However, Oracle has shorter time-to-market integration with the rest of the back-office platforms.
The business model of Demandware is revenue sharing based on the negotiated percentage of the retailer’s turnover. So, when the retailer’s business explodes, Demandware will also prosper, however it becomes a considerable cost for the retailer in the long run. Revenue sharing must be re-negotiated.
On the contrary, the development and deployment costs with Oracle or Hybris are initially higher. However, annual maintenance and upgrade costs are not proportionate to the retailer’s sales growth, thus long term operating costs are unsubstantial.
We present several solutions indicating the pros and cons to our clients. The retailer will then make their decision according to their ambition and objectives.
What happens if the retailer wants to change the platform?
Retailers can always change from one platform to another (i.e. from Demandware to Oracle or vice versa) but they must consider the significant cost of data migration in addition to the development and integration costs.
Accenture is a global management consulting, technology services and outsourcing company, with approximately 275,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion (€20.7 billion) for the fiscal year ended Aug. 31, 2013.
Part II will be published on the 1st of April 2014:
- How can OmniChannel retailers beat PurePlayers?
- How can retailers deal with showrooming?
- What are the key elements to increase sales?
- How can retailers have Customer Insight?
- Segmentation of shoppers
- Is there a platform that can analyse customer information in real-time?
- How to increase sales in-store?
- What’s the future of retail?