The conversation around unified commerce is sweeping across every sector of the retail industry. It has moved beyond the cutting-edge concept first posed a few years back, to rapid adoption by mainstream players, who seek to understand shoppers more completely and create consistent, high-value customer experiences across all touchpoints.
In a 2016 survey of executives, Boston Retail Partners said “81% of retailers plan to have unified commerce within three years.” That means now.
IHL Group, a retail tech consultancy that tracks tech investment in retail, reports that
Not long ago, the inward-looking concept known as omnichannel had retailers of all kinds “gazing at their operational navels” as they made efforts to align data and internal systems across their physical and digital storefronts. The work was hard, and a relentless focus on inventory and pricing practices too often left the shopper’s side of the equation wanting attention.
Unified commerce goes further to put customers first, by ensuring a consistent, satisfying brand and service experience across all touchpoints and any path to purchase. This is sometimes called a 360-degree view of the customer, because it enables the retailer to collate each shopper’s interactions into a coherent picture, from every vantage.
While it still depends on capable, reliable back-office and transactional systems that have been the backbone of omnichannel retail, unified commerce looks outward too, to meld shopper interactions into an intuitive continuum of experiences that will often flow from screen to store to screen and back, sometimes with social media stops along the way. The time is ripe for retailers to confront and master unified commerce. Your business needs these capabilities to effectively compete. Shoppers – especially your mobile-savvy smartphone owners – demand the high-quality experiences it makes possible.
Unified commerce in retail comes down to three core strategies:
- First, bring all the relevant data from your functional business areas together within a single repository.
- Second, mine that data for consumer insights and business opportunities using advanced analytics.
- Third, present the right items, offers and services to each customer at each interaction moment.
Unified Commerce: Another Name for Omnichannel? Not Quite.
Omnichannel initiatives made strides toward connecting processes and data on the back end to assure better inventory and operational competencies that could support both physical and digital touchpoints.
Unified commerce leverages this single version of the truth in both directions, to move a retail business beyond operational competency and support elevated experiences from the shoppers’ perspective.
While there are many thoughtful definitions that reflect the bi-directional nature of unified commerce, we think this one from Justin Guinn of Softwareadvice.com pretty much nails it:
Unified commerce is a business design that leverages a harmonious integration of retail processes/systems to provide full transparency of consumers on the back end and seamless customer experiences on the front end, regardless of the journey taken to make a purchase.
The central pillar of unified commerce is a blending of transitions between interactions and channels, enabling a consistently seamless customer experience.
In a unified commerce retail ecology, a purchase sequence initiated anywhere can be advanced and completed anywhere. That’s the essence from the customer’s point of view. In this context, anywhere may mean social media, e-commerce, mobile or a physical store, in any sequence or combination.
It’s about presenting a seamless face to customers across all points of contact, enabled by a seamless core technology platform behind the scenes.
It’s also about sustaining a comprehensive, continuous view of the customer, a “360-degree view” of their interactions along the consideration and purchase journey. The same systems that enable consistency of experience also collect data about those interactions which can be mined for insights and used to further perfect operations.
Retailers that adopt unified commerce may anticipate measurable benefits in several areas, including: higher conversion rates; better assortment and order management; improved customer loyalty and satisfaction scores. A few other important considerations:
Consistency of customer experience is essential.
This is not just branding. When the mobile screen and website are treated not just as extensions of the storefront but as its naturally-integrated facets, shoppers can gain confidence from being recognized at each contact. They experience continuity in their shopping process even as they proceed from touchpoint to touchpoint. They benefit from the absolute consistency of information such as item details, availability, policies and prices.
Value of data accumulated will be significant.
Unified commerce also presents very important and valuable “sensing” opportunities at each touchpoint which can enable a much more comprehensive view of the customer journey and how decisions are formed at each moment of truth. When every “moment of truth” is captured and available for data analytics, the resultant insights can be invaluable to drive personalization and shape your business approach.
Mapping the Evolution from Single-Channel to Multichannel to Omnichannel to Unified Commerce
Unified commerce is the natural next stage in an innovation sequence or progression that began with “multichannel” retailing in the late 1990’s. At that time, many brick-and-mortar retailers reacted to the disruption of pure-play dot-com retailers by introducing their first stand-alone e-commerce sites. While their motives were defensive, early brick-and-click models drew praise for their efforts to leverage an existing customer base that already had a relationship with the retail brand.
Traditional retailers who adopted e-commerce channels were freighted with inertia of legacy systems that were built with only physical stores in mind. Most created online retail outlets as if they were separate stores that offered most of the same merchandise under a shared brand identity. Getting those early web stores to function dependably was a feat in itself, and integrating them tightly with brick-and-mortar operations was hardly considered.
The pitfalls of the multichannel approach were recognized almost as soon as the they were launched. Pioneers like Eddie Bauer and JCPenney quickly confronted the complexities of their experiments, as separate inventories and assortments, separate POS, separate policies, and inconsistent prices frustrated shoppers and added managerial complexity. Store manager compensation was a pain point, as they rightly regarded online sales to be competitive with their job goals, and viewed accepting returns in-store as a punishment.
The discomfort caused by these issues led to important insights about the multichannel model: Separate accounting and inventory systems created unanticipated conflicts. Solutions were needed to connect the businesses together at the back end. Policies were needed to take the frustration out of customer facing jobs that had suddenly become far more complex and technically challenging.
Chain retailers embarked on a concerted effort to address and correct the major operational and employee issues that challenged brick-and-click retailers. Inventory management was a huge focus, as retailers aspired to offer “long-tail” assortments that let them compete more effectively with pure online retailers. Buy-anywhere-return-anywhere service standards were reinforced by compensation policies that took away the sting for store employees. In-store order fulfillment (ship from store and click and carry) became areas of experimentation and investment that meant changes in store configuration and employee training.
These areas of innovation were pursued at great cost while the shopping experience often lagged behind. Legacy back-office systems were a key part of the challenge, as they were designed for operating stores and relied upon data structures that were not aligned with newer digital commerce requirements. Integration did not come easily, and the work-arounds could make life frustrating for associates.
The widespread adoption of mobile consumer technology helped stimulate a more universal viewpoint for retailers. Aligning store commerce and web commerce is necessary but not sufficient. Reimagining a retail business as a single merchandising, servicing and selling platform with multiple faces or touchpoints finally begins to shift the thought process. Some retailers and analysts persist in using the legacy omnichannel terminology, but unified commerce goes several steps further, to ensure that the shopper experiences the retail enterprise as a coherent whole.
A Unified Platform is Essential for Unified Commerce to Succeed
A key lesson of the omnichannel era is that patched together point solutions cannot deliver the seamless experience that shoppers require. Retailers have exerted themselves to integrate various back-of-the-house applications, but the task grows far more challenging when those systems need to power the shopping experience across all of a customer’s preferred touchpoints and deliver on ever-rising service expectations. Critical capabilities include:
- Mobile-optimized e-commerce storefront technology
- Enterprise-class order management
- Assortment and inventory management
- Drop ship order fulfillment and warehouse management with connectivity to vendors
- Customer relationship management (CRM)
- Point of Sale and ways to pay
- Data analytics to drive intelligent business decisions
A purpose-built unified commerce platform is a critical step forward for organizations who are reaching the limitations of their legacy systems. Technical architecture is key. Unified commerce is not well served by an assembly of integrated point solutions with separate data nodes. A common backbone is needed, with all applications working from a common pool of data. Sometimes this is called a “single version of the truth,” and the advantages are clear.
Unified commerce presents a consistent brand experience to customers at every touchpoint.
Compared with omnichannel, unified commerce is more outward-looking, about providing that single face to the customer every time, at every touchpoint. It supports any sequence of touchpoints on any occasion to attract, sell and keep customers engaged.
Shoppers care about interacting with one brand with one set of norms, regardless of the purchase occasion, channel of interaction or the path they took to get there. Expectations are shaped by their experiences in other retail channels, notably Walmart, Best Buy, Target, Macy’s and Home Depot, all of which have tried to engineer experiences to help shoppers find and obtain the products and product information they need.
Regardless of where they begin, the shopper sees one retail establishment that lets them research digitally for the item they want, confirm its cost and availability, and either have it shipped or held for pick-up in store. This behavior is becoming quite frequent and is sometimes called BOPIS, for “buy-online-pickup-in-store”. Chain retailers Target and Walmart are among the retailers that have re-configured pickup areas within their stores to accommodate this process smoothly.
When visiting the store, the shopper can access in-store touchscreens or their personal mobile devices to access detailed product information (including competitive prices) and other items in the assortment that may not be on your shelves but are available for order. Retailers who once fretted about “showrooming” behavior siphoning transactions away have learned to embrace and encourage these shopper visits as opportunities to engage.
The inverse of this interaction, known as “web-rooming” happens when a shopper researches a high-consideration product on several retailers’ sites – or even the product search engine of first resort, Amazon.com – then visits your store to obtain it rapidly. Mobile dealers will want to be prepared with definitive item availability data so that these sales opportunities can be converted.
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