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Retail Customer Order Management Blog Series: Part 1 - An Introduction

This blog got triggered by a series of events that I experienced recently. We were asked recently to analyze a 'simple' retail and online integration for enabling the order management and fulfillment process for kiosk orders which were placed and paid for in the store. Lack of existing documentation forced us to go to the store multiple times to place 'test' orders for elaborating the various scenarios. Some of our experiences have been documented in a previous blog by my colleague Sameer.
This actual 'cross channel' experience combined with a similar large implementation for an earlier client convinced me that I should spend some time providing an introduction to Retail Customer Order Management and its specific nuances and challenges. My focus is not to describe the traditional order management process typically associated with a single channel i.e. the steps required for managing the lifecycle of an online order or a retail replenishment order but instead highlight the cross channel benefits and challenges of managing a customer order from a retail stores perspective. 
Cross channel or multi channel retailing at its most basic consists of retailers & customers interacting over multiple channels to find, decide on and transact products and services. The conventional sales channels include the online channel, ordering over a phone or simply walking into a nearby store to pick up the product. A customer is engaged in a cross channel experience if he browses say for an LCD TV online and goes to a store next door to buy it. He could also be browsing a mail order catalog after which he goes online and orders the product from say a After receiving the TV, he may try it in the privacy of his home and if he does not like the picture or the sound, he may choose to drive to the nearest store to return or exchange it. More and more customers consider this a natural and intuitive process to find, evaluate and buy their products. This ‘natural’ behavior of the consumer is however exposing the chinks within the processes of the traditional store or even pure plays online retailers.
While it is understood by retailers and retail practitioners that online sales are growing at a fast clip, there is a much more limited understanding of the fact that as customers are exposed to a multitude of channels they expect these cross channel experiences to be seamless. Recent consumer behavior studies have shown that more than 50% of consumers researched a product online and purchased it offline thus influencing in-store sales. These cross channel customers tend to be younger, more valuable and sophisticated as compared to their single channel cousins. They conduct more research, sort through multiple information sources while making buying decisions and on the whole lead to greater average order values if the retailers can manage to attract their loyalty. Other reports are predicting that the number of cross channel shoppers will increase significantly in the next few years. It has thus become a business imperative for retailers to do some internal soul searching to assess  their cross channel capabilities, identify gaps and put together plans to enhance or transform them.
The objective of this series of blogs is to share insights and experiences from just such cross channel capabilities analysis and transformation initiatives of some of the leading retailers and retail practitioners.  As the name implies cross channel capabilities analysis is a rather ambitious concept that encapsulates all the functions and capabilities required by a retail organization to enable a seamless experience for customers irrespective of the channel through which they interact. My focus in this blog series though, would be on the challenges and enablers within the context of ordering within a bricks and mortar store - thus retail customer order management.
Let us begin by going back to my example of a customer Joe Shmoe walking into an electronics store to buy a TV. He would try to locate the relevant 'video' section of the store and start browsing there. He would browse through the various TV models and sizes based on various factors such as size of his living room, his perception of the brands available based on recommendations and reviews of friends and experts, the capabilities of the TV, the price range and so on. He probably consults with a knowledgeable sales associate to fill in the gaps of his understanding. This would be classified as the 'Find and Decide' stage of his decision making process.
Based on all these factors, he chooses a TV to buy. He now starts thinking of how he can get such a large TV back to his home and whether he would be able to setup such a complicated piece of equipment on his own. The sales associate reassures him that a delivery truck would deliver it to his home the next day. If required he would be accompanied by somebody who will install the TV and walk Joe through the process of using it.
He then walks to the nearest register with the details of the TV he wants to buy. He asks questions about what kind of warranties and return policies exist for his expensive investment and decides to buy an extra 3 years of protection. He pays for the TV, the delivery & installation the warranty and taxes using a combination of a gift card he got for Christmas and a credit card. He thus completes the 'Buy' phase of his traditional retail store buying experience.
From a retailer's perspective this translates to the following series of steps and processes. To enable easy and intuitive Find and Decide, the store must stock a large variety of TVs. It must provide a large amount of information about these TVs and make sure this information is easily accessible and understandable to their customers. This function is typically provided by an item or merchandise management system. The store must have sufficient quantity of each TV displayed so that when a customer decides to buy one, they can walk out with one. This thus is an availability function managed by the inventory systems.
In order to ensure that a large product gets to a customer's home on time, the store must have a fulfillment and delivery system. This must not only take care of the tangible products bought by the customer but also the scheduling and delivery of intangible services such as installation and warranty support. When the customer wishes to pay, the payment tendering (POS) and accounting systems need to support the many means by which a customer chooses to pay for his purchases. Also if in the future, Joe wants to return his TV, the returns management system must be able to pull up his original sale transaction, return the product and refund Joe the amount he paid for the TV.
The above describes the microcosm of customer and retailer interactions within the traditional store buying environment. Now imagine that the store runs out of the specific TV, Joe has so painstakingly decided to buy. This then is the point where our story of Retail Customer Order Management begins.

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