Fulfilling the Promise of Multi-Channel Commerce - III
This is the last of my blogs for the videocast discussion with Dan Gilmore, Chief Editor of Supply Chain Digest. The details of the videocast on August 17th are available at http://www.sctvchannel.com/Videocast_Fulfilling_Multi_Channel_Commerce.php.
A critical difference between Multi Channel Operations (MCO) and Multi Channel Commerce (MCC) is in the handling of financial data. Most retailers have established well defined business processes for channel specific financial accounting. For e.g. the online and catalog channels post inventory, sales and payment settlement into systems that inherently recognize the delayed fulfillment of orders i.e. posting occurs when the order is shipped and not when it is created. Store POS transactions however post almost immediately as the customer typically walks out with the product. These processes and systems which are very disparate across channels, work very well in channel isolation. However when these channels cross like when a customer pays for a product in store but it gets fulfilled later from an online DC, a whole bunch of accounting problems arise.
Another related issue is around the potential for conflict amongst channel stakeholders with respect to matters that relate to incentives and metrics. If a customer places an order online, but picks up from the store, which channel gets the credit for this sale and in what proportion? How are the revenues split across the channels involved? Either of these channels may get the credit completely or it could be a model sharing credit in some predetermined proportion. Ground rules to handle such issues need to be a part of the retailer's MCI strategy. MCC is really an organization-wide initiative with all the channels involved having a share and claiming a stake in the investments as well as the outcome.
