The State of Multichannel Retail · • Only 25% incentivize cross-channel collaboration at stores...
Transcript of The State of Multichannel Retail · • Only 25% incentivize cross-channel collaboration at stores...
The State of Multichannel Retail
Retail OperationsBenchmarking and Excellence Survey 2014
ROBES 2014- The State of Multichannel RetailTCS Public
Benchmarking and Excellence Survey 2014Agenda
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• Context
• Scope & Methodology
• Key Insights
• Call to Action
ROBES 2014- The State of Multichannel RetailTCS Public
ContextWhy Multichannel?
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Reduce store SizeIncrease ReachReduce stores Dependency
Reinvent your Operations
Delight your Customers differently
Multichannel offers opportunities to reorient the business radically !
ROBES 2014- The State of Multichannel RetailTCS Public- 3 -
ContextWhy Multichannel?
ROBES 2014- The State of Multichannel RetailTCS Public
Multichannel Offerings Today
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TransactionsCOD, Mobile, Credit, Debit
EngagementComparative sites, SEO, Social sharing, Info kiosk
DeliveryNext day delivery,
Click & Collect,Delivery tracking, Service at delivery
After Sales Service
Multi-channel returns, complaint resolution,
troubleshoot on social
Multi-channel OptionsWeb, Contact centre, Marketplace, Mobile,
Catalogue
ROBES 2014- The State of Multichannel RetailTCS Public
Survey PreviewGood News
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70%
>15%
6371
For majority, e-commerce has seen
healthy growth
have online business reporting directly to CEO or COO
ATV on website
ROBES 2014- The State of Multichannel RetailTCS Public- 6 -
Survey PreviewReality & Challenges
Are retailers ready to do justice to the potential? Are these tactical or strategic issues?
• Only 30% have a single view of customer orders
• 38% pursue uniform pricing across channels
• Only 17% have a unified marketing calendar
• Only 25% incentivize cross-channel collaboration at stores
• Only 17% have a unified CRM program
ROBES 2014- The State of Multichannel RetailTCS Public
Key PerformanceIndicators (KPIs)
Strategic FocusAreas
Scope & MethodologyParameters & Processes
The first-ever comprehensive multichannel retail benchmarking study covers the following parameters:
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Customer Experience
Marketing
Operations
Organization
Technology
Financial management
Process Maturity
1 2 3
ROBES 2014- The State of Multichannel RetailTCS Public
Participating Brands
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*The logos are property of their respective corporations
ROBES 2014- The State of Multichannel RetailTCS Public
Methodology Used for This Study
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LEVEL 2
LEVEL 3
LEVEL 4Unified Customer Marketing & Relationship Program
Over-lapping programs (common promotions)
Channel specific programs
LEVEL 1 Store-based CRM program
25%
50%
75%
100%
Example: Customer Experience
TCS Process Maturity FrameworkTCS’ Process Maturity Framework was used to:
• Define process maturity from Level 1 (Low Maturity) to Level 4 (High Maturity)
• Allocate scores to each level of maturity, which ranged from 25 to 100 percent
• One-to-one, in-depth interactions with CXOs captured data and insights.
• 1,200 data points were gathered across six process areas.
ROBES 2014- The State of Multichannel RetailTCS Public
Key Insights
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ROBES 2014- The State of Multichannel RetailTCS Public
Industry Level KPIs
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Contribution of revenue from non-store channels
Less than 1% 43%1% to 3% 21%3% to 5% 7%5 to 10% 21%
>10% 7%
What is the sales growth of the non-store channels (e-commerce)?
0-5% 8%5-10% 8%10-15% 0%15-20% 28%>20% 56%What is your average transaction
value (ATV) in the channels that you operate (Rs.)?
Store 5737
Website 6371
Marketplace 3967
Mobile Channel 4300
What is the proportion of repeat/loyalty customers for non-
store channels (e-commerce)?
< 30% 58%
30-40% 11%
40-50% 32%
50-60% 0%
> 60% 0%
What is the percentage of customer returns for your non-store channels
(e-commerce)?
0-3% 65%
3-5% 9%
5%-10% 13%
10%-15% 9%
>15% 4%
Loyal customers are driving your non store sales. The ATV on the website is higher than the physical store !
ROBES 2014- The State of Multichannel RetailTCS Public
Primary Objective of Multichannel
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Improving Customer Experience and Geographical Expansion high on retailers’ multichannel strategy for FY2014-15
21%Geographical
Expansion
Improve customer experience
Revenue Enhancement
Customer Loyalty
Inventory Optimization
Profitability
21%
18%
17%13%
10%
Prime objective of multi-channel strategy (FY2014-15)(% of retailers for whom this item is a top priority
ROBES 2014- The State of Multichannel RetailTCS Public
Overall Process Maturity – Cross Segment
Industry Maturity
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Overall low process maturity
• Overall industry maturity is “low”
• Organizational structures are evolving to meet the dynamic requirements
• The industry still faces challenges on “one version of truth”
– Customer, product, and inventory information across channels
57%
53%
75%
70%
50%
63%
0%
20%
40%
60%
80%
100%Marketing
Operations
Customer Experience
Organization
Technology
Financial
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Overall Multichannel Process Maturity Is Low
A lot to learn from each other on good practices
Marketing Operations Customer Experience
TechnologyFinance Organization
57%
Leaders
Laggards
43%
37%Industry benchmark
53%
Leaders
Laggards
40%
30%Industry benchmark
75%
Leaders
Laggards
33%
57%Industry benchmark
70%
Leaders
Laggards
57%
40%Industry benchmark
63%
Leaders
Laggards
17%
20%Industry benchmark
50%
Leaders
Laggards
33%
40%Industry benchmark
Scope to share best practice: High High Medium
Scope to share best practice: High HighMedium
ROBES 2014- The State of Multichannel RetailTCS Public
P&LSingle or Separate for different Channels ?
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10%
7%
66%
17%
Stores P&L only
Stores + Non-store (owner of multi-channel) P&L
Separate P&L for each individual channel (Intra Channel Decision Making)
Single P&L for all channels
Trade-off between collaboration and speed
Low Maturity
High Maturity
ROBES 2014- The State of Multichannel RetailTCS Public
Delivery options offered- Cross Segment
Multichannel Operations
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61%
18%
4%
18%
Buy on limited Channels (say, only Store or Online) &
Deliver to Home
Buy on any Channel & Deliver to Home
Buy on any Channel & Pick-In-Store in specific locations
Buy on any Channel & Pick-In-Store in any location
% respondents
• 18% have store pick up of orders made from any channel
• 52% have channel specific supply chain network but share inventory
• 71% have “one view” of their inventory
There is some way to go in terms of integrated multichannel operations
Low Maturity
High Maturity
ROBES 2014- The State of Multichannel RetailTCS Public
IT System Landscape- Cross Segment
Multichannel Technology
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28%
28%
34%
10%
Independent
Low integration
Marginal integration
Complete integration
% respondents
• Only 10% have complete integration of their systems
• Only 10% of retailers have one view of customers
• 65% of respondents spend <10%of IT budget on non store channel
Technology is the least matured function
Low Maturity
High Maturity
ROBES 2014- The State of Multichannel RetailTCS Public
Cross Channel Incentives- Cross Segment
Multichannel Organization
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No79%
Yes21%
% respondents
• Only 21% provide cross channel incentives
• Only 34% share the same customer and product view across channels
• 70% of the retailers have multi-channel sponsorship from the CXO’s office
Need to build synergies between the store and non store channels
ROBES 2014- The State of Multichannel RetailTCS Public
Best & Next Practices
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A combination of mindset, policy changes and technology intervention can create value
Marketing
• Cross-channel unified view of customer and order data
• Cross-channel unified marketing and promotion calendar
Operations
• Continuous, cross-channel assortment planning
• Cross-channel order fulfillment
• ‘One view’ of inventory cross-channel
Customer Experience
• Unified CRM program across all channels
• Multiple options for order pick-up and delivery
• Multiple return options to customer for non-store purchases
Technology
• Integrated cross-channel technology platform
• Real-time, cross-channel update of data, promos and pricing
Finance
• Channel-optimized annual operating plans
• Unified P&L across channels for combined decision making
Organization
• Single cross-channel view of customer
• Intense oversight by CEO/COO
• Reporting for collaboration
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Process, Policy TechnologyTP
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ROBES 2014- The State of Multichannel RetailTCS Public
Summary
The first ever Multichannel Operations Benchmarking & Excellence Survey reveals that:
• FY14 is a mixed bag in terms of performance
• True multichannel “integration” is not visible
• Overall maturity is low, though retailers are putting in place the organization structures and processes for a multichannel play
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ROBES 2014- The State of Multichannel RetailTCS Public
Call to Action…
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There is a great opportunity in the making to personalize, reach out and transform customer experience
1. Re-evaluate and reboot your multichannel strategy ; Go back to the drawing board and create roadmaps for all areas
2. Get your organization structure and people aspects right; Collaborate and Innovate both
3. Unlock value of your “loyal customers” and leverage your assets(stores) ; Build synergies between the store and non store channels
4. Technology is the least evolved area ; Need to invest ; Have a long term view and do not settle for “chalta hai solution”
5. Continued CEO involvement
Thank YouAnil RajpalHead Practice – Retail, CPG & E-Commerce, Emerging Markets Global Consulting PracticeTata Consultancy [email protected]