Description
The Integrated Multi-channel Retailing (IMCR) Model, we presented as a sustainable retail
business model of the future at Massmerize 2012, has been well received by a number of
retailers who agree with the merits of the business case. Over the last year, several
companies approached us for a detailed view of the approach, the imperatives and best
practices in this area, the credible industry examples and, finally, tracking of the progress of
their initiatives. This knowledge report will address the requirement and help achieve a truly
integrated multi-channel retail business model.
TCS-FICCI – Massmerize 2013
Adapting to the Multi-channel Customer
A Roadmap for Integrated Multi-channel Retailing
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Foreword
Dear Friends,
It gives me great pleasure to welcome you to Massmerize 2013.
Taking the dialogue ahead from last year’s consumption theme, this year we look at
how consumerism in the digital era is reshaping the traditional consumer businesses
of FMCG and Retail. And to their credit, they have made some interesting moves
already.
Consumer behavior is changing in sync with fast emerging consumer technologies
and in the process, giving rise to new business opportunities as well as challenges to
existing models. Organizations which are moving in pace with these rapid changes
will succeed immensely in the coming future. I am hopeful that this event will trigger
insights, dialogue, thoughts and actions towards achieving that success.
I take this opportunity to wish Massmerize all the very best and I am hoping that it will
be an insightful learning experience for all those who attend it.
Regards,
Kurush Grant
Chairman – FICCI FMCG Committee
1
2
Foreword
Dear Friends,
It gives me great pleasure to welcome you to Massmerize 2013.
Taking the dialogue ahead from last year’s consumption theme, this year we look at
how consumerism in the digital era is reshaping the traditional consumer businesses
of FMCG and Retail. And to their credit, they have made some interesting moves
already.
Consumer behavior is changing in sync with fast emerging consumer technologies
and in the process, giving rise to new business opportunities as well as challenges to
existing models. Organizations which are moving in pace with these rapid changes
will succeed immensely in the coming future. I am hopeful that this event will trigger
insights, dialogue, thoughts and actions towards achieving that success.
I take this opportunity to wish Massmerize all the very best and I am hoping that it will
be an insightful learning experience for all those who attend it.
Regards,
Kurush Grant
Chairman – FICCI FMCG Committee
1
2
Dear Friends,
Welcome to Massmerize 2013.
From consumption opportunities to consumerism in the digital era, we have come a
long way from last year.
Technology has enabled consumers to engage directly with their favorite brands – be
it products or stores. Multiple channels of communication like social media and
digital channels, which go beyond conventional media, have permitted marketers to
reach out to new consumer segments, especially the youth. While conventional
retail channels like stores continue to expand and flourish, new technologies in
hosting products, communicating to consumers, and allowing them to transact
securely have enabled multiple channels such as e-commerce, m-commerce and
television shopping to proliferate. Marketers and retailers who have embraced these
technologies and channels remain at the forefront of change.
With this event, we are positive about creating a business strategy that is focused on
the multichannel consumer. I hope that you will find the insights, interactions and
best practices shared at the event to be of immense value to you. I also believe that
they will help shape your organization’s efforts to stay relevant in the digital era.
Regards,
Bijou Kurien
Chairman – FICCI Retail Committee
3
4
Dear Friends,
Welcome to Massmerize 2013.
From consumption opportunities to consumerism in the digital era, we have come a
long way from last year.
Technology has enabled consumers to engage directly with their favorite brands – be
it products or stores. Multiple channels of communication like social media and
digital channels, which go beyond conventional media, have permitted marketers to
reach out to new consumer segments, especially the youth. While conventional
retail channels like stores continue to expand and flourish, new technologies in
hosting products, communicating to consumers, and allowing them to transact
securely have enabled multiple channels such as e-commerce, m-commerce and
television shopping to proliferate. Marketers and retailers who have embraced these
technologies and channels remain at the forefront of change.
With this event, we are positive about creating a business strategy that is focused on
the multichannel consumer. I hope that you will find the insights, interactions and
best practices shared at the event to be of immense value to you. I also believe that
they will help shape your organization’s efforts to stay relevant in the digital era.
Regards,
Bijou Kurien
Chairman – FICCI Retail Committee
3
4
Contents
1. Executive Summary
Current State of Multi-Channel Retailing
5
Roadmap for IMCR
8
2. About The Authors
10
3. Multi-Channel Retailing Today
12
Global Benchmarking – IMCR Evolution
14
Asian Initiatives – IMCR Evolution
15
4. Inspiration from Retailers – FMCG Players innovating in Multi-Channel
20
5. Multi-channel Value Chain – Customer Buying and Consumption Journey
22
6. Approach for Integrated Multi-Channel Retailing
25
Initiatives, Roadmap, and Best Practices for Integrated Multi-channel Retailing
5
1
28
7. Key Takeaway: Integrated Multi-channel Customer Engagement Model
30
8. Key Takeaway: 21 Multi-channel Retail KPIs to Chase and Achieve
35
9. Conclusion
40
10. References
45
6
Contents
1. Executive Summary
Current State of Multi-Channel Retailing
5
Roadmap for IMCR
8
2. About The Authors
10
3. Multi-Channel Retailing Today
12
Global Benchmarking – IMCR Evolution
14
Asian Initiatives – IMCR Evolution
15
4. Inspiration from Retailers – FMCG Players innovating in Multi-Channel
20
5. Multi-channel Value Chain – Customer Buying and Consumption Journey
22
6. Approach for Integrated Multi-Channel Retailing
25
Initiatives, Roadmap, and Best Practices for Integrated Multi-channel Retailing
5
1
28
7. Key Takeaway: Integrated Multi-channel Customer Engagement Model
30
8. Key Takeaway: 21 Multi-channel Retail KPIs to Chase and Achieve
35
9. Conclusion
40
10. References
45
6
EXECUTIVE SUMMARY
The Integrated Multi-channel Retailing (IMCR) Model, we presented as a sustainable retail
business model of the future at Massmerize 2012, has been well received by a number of
retailers who agree with the merits of the business case. Over the last year, several
companies approached us for a detailed view of the approach, the imperatives and best
practices in this area, the credible industry examples and, finally, tracking of the progress of
their initiatives. This knowledge report will address the requirement and help achieve a truly
integrated multi-channel retail business model.
Current State of Multi-Channel Retailing
Before we get down to outlining the roadmap for IMCR, let us take a quick look at the
current state of multi-channel retail – globally as well as in India.
Global consumer indicators reveal that multi-channel consumers (consumers who shop
across multiple channels, including web, mobile, offline store), spend more on brands than
single channel shoppers. It is interesting to note that 54% of multi-channel customers shop
with only five retailers or less. This indicates that only a few retailers have been successful in
adapting their business models, while others are lagging behind.
To explain further, a prominent retail group in the United Kingdom made inspiring strides in
multi-channel retail between 2009 and 2013. Their online business now contributes nearly
12% of total sales, an increase from 5.6% in 2009. They also registered a healthy growth rate
of 27% per year. Additionally, they have been able to measure multi-channel retail revenues
accurately, and it is estimated to be at nearly 25% of total revenues in 2013.
To represent the APAC region, we also evaluated a leading Indian departmental store chain
with a credible online presence. In the absence of complete IMCR metrics in this market, we
compared their online performance to a pure online fashion retailer to evaluate their multichannel model. Theirs was a mix of online and physical stores. We evaluated the
opportunities they were missing in comparison to available potential. Our analysis revealed
that the company could have an IMCR revenue component of 17% in 2013. The number of
visitors to their online channel had grown 1.57 times, whereas there was only a 9% increase
in store footfalls. We estimate that by 2018, the number of visitors to the retail brands’ online
channel will far exceed the number of its store visitors. It is therefore important that retailers
focus on becoming a truly integrated multi-channel retail entity.
Another interesting trend we witnessed is that FMCG players are not only partnering with
retailers in their multi-channel retailing efforts, but are also experimenting with initiatives of
their own in this space. Coca-Cola has recently piloted online and mobile initiatives in India,
so that they can reach customers directly at their homes. There is hence a good business
case to review existing business models and explore the possibilities available through
integrated multi-channel retailing.
7
Following the positives from the leaders in this space, let us get down to the basics of the
entire journey. We have mapped the multichannel consumer buying journey and observed
that they have become increasingly channel agnostic. For this reason it is becoming
important for retailers to shape their business to reach the customers wherever they are –
store, mobile, web, TV, phone, airport, magazine or at home. And this can be achieved only
by pursuing the end state of integrated multi-channel retailing. There are a number of issues
that need to be considered as this model increases in popularity. Customers will need
adequate regulatory support and protection. For example, the issue regarding ambiguity
with respect to jurisdiction as a result of the online retailer’s business structure and model. It
is possible that the retailer’s registered office, warehouse location, and service outlet are in
three different places. In this scenario, who is responsible for customer grievances arising
from a multi-channel model? There is still some ground to be covered on this front.
Meanwhile, ITC Limited Chairman Kurush Grant interacted with us on this topic and
highlighted key imperatives towards building a robust IMCR roadmap covering the use of
shopper insights, managing channel conflict and enabling organizational structures, which
have been integrated in our approach on the same.
The integrated multi-channel retail journey involved four phases – Individual to
Independent to Interconnected to Integrated. We now focus on what it takes to reach the
Integrated phase and to keep evolving.
Roadmap for IMCR
For a retailer to become a successful integrated multi-channel retailer, it is imperative to
address multiple issues holistically. These issues pan across strategy, operations,
organization, processes and systems:
?
?
?
Defining operating strategy and model: leading to right governance and cross
channel collaboration
?
Business and channel strategy
?
Assortment strategy
?
Organization structure, Key Performance Indicators (KPIs)
Shaping customer experience: leading to seamless shopping behavior across channels
?
Pricing
?
Service
?
Customer order fulfillment
Deploying processes and systems: leading to one view of the customer, inventory and
orders across channels
8
EXECUTIVE SUMMARY
The Integrated Multi-channel Retailing (IMCR) Model, we presented as a sustainable retail
business model of the future at Massmerize 2012, has been well received by a number of
retailers who agree with the merits of the business case. Over the last year, several
companies approached us for a detailed view of the approach, the imperatives and best
practices in this area, the credible industry examples and, finally, tracking of the progress of
their initiatives. This knowledge report will address the requirement and help achieve a truly
integrated multi-channel retail business model.
Current State of Multi-Channel Retailing
Before we get down to outlining the roadmap for IMCR, let us take a quick look at the
current state of multi-channel retail – globally as well as in India.
Global consumer indicators reveal that multi-channel consumers (consumers who shop
across multiple channels, including web, mobile, offline store), spend more on brands than
single channel shoppers. It is interesting to note that 54% of multi-channel customers shop
with only five retailers or less. This indicates that only a few retailers have been successful in
adapting their business models, while others are lagging behind.
To explain further, a prominent retail group in the United Kingdom made inspiring strides in
multi-channel retail between 2009 and 2013. Their online business now contributes nearly
12% of total sales, an increase from 5.6% in 2009. They also registered a healthy growth rate
of 27% per year. Additionally, they have been able to measure multi-channel retail revenues
accurately, and it is estimated to be at nearly 25% of total revenues in 2013.
To represent the APAC region, we also evaluated a leading Indian departmental store chain
with a credible online presence. In the absence of complete IMCR metrics in this market, we
compared their online performance to a pure online fashion retailer to evaluate their multichannel model. Theirs was a mix of online and physical stores. We evaluated the
opportunities they were missing in comparison to available potential. Our analysis revealed
that the company could have an IMCR revenue component of 17% in 2013. The number of
visitors to their online channel had grown 1.57 times, whereas there was only a 9% increase
in store footfalls. We estimate that by 2018, the number of visitors to the retail brands’ online
channel will far exceed the number of its store visitors. It is therefore important that retailers
focus on becoming a truly integrated multi-channel retail entity.
Another interesting trend we witnessed is that FMCG players are not only partnering with
retailers in their multi-channel retailing efforts, but are also experimenting with initiatives of
their own in this space. Coca-Cola has recently piloted online and mobile initiatives in India,
so that they can reach customers directly at their homes. There is hence a good business
case to review existing business models and explore the possibilities available through
integrated multi-channel retailing.
7
Following the positives from the leaders in this space, let us get down to the basics of the
entire journey. We have mapped the multichannel consumer buying journey and observed
that they have become increasingly channel agnostic. For this reason it is becoming
important for retailers to shape their business to reach the customers wherever they are –
store, mobile, web, TV, phone, airport, magazine or at home. And this can be achieved only
by pursuing the end state of integrated multi-channel retailing. There are a number of issues
that need to be considered as this model increases in popularity. Customers will need
adequate regulatory support and protection. For example, the issue regarding ambiguity
with respect to jurisdiction as a result of the online retailer’s business structure and model. It
is possible that the retailer’s registered office, warehouse location, and service outlet are in
three different places. In this scenario, who is responsible for customer grievances arising
from a multi-channel model? There is still some ground to be covered on this front.
Meanwhile, ITC Limited Chairman Kurush Grant interacted with us on this topic and
highlighted key imperatives towards building a robust IMCR roadmap covering the use of
shopper insights, managing channel conflict and enabling organizational structures, which
have been integrated in our approach on the same.
The integrated multi-channel retail journey involved four phases – Individual to
Independent to Interconnected to Integrated. We now focus on what it takes to reach the
Integrated phase and to keep evolving.
Roadmap for IMCR
For a retailer to become a successful integrated multi-channel retailer, it is imperative to
address multiple issues holistically. These issues pan across strategy, operations,
organization, processes and systems:
?
?
?
Defining operating strategy and model: leading to right governance and cross
channel collaboration
?
Business and channel strategy
?
Assortment strategy
?
Organization structure, Key Performance Indicators (KPIs)
Shaping customer experience: leading to seamless shopping behavior across channels
?
Pricing
?
Service
?
Customer order fulfillment
Deploying processes and systems: leading to one view of the customer, inventory and
orders across channels
8
This paper covers best practices on these three critical aspects and proposes, what we call, a
pragmatic roadmap for attaining an integrated multi-channel state.
These steps must be repeated on a regular and consistent basis to adapt to a truly holistic
integrated multi-channel way of retailing. New operating models will emerge, competitors
will catch up, consumer expectations will change – what’s superior service today is common
tomorrow, with new tools and system enablers coming in. It is important to observe here
that this is the new way of doing business. Best practices highlighted from the likes of Home
Depot, Tesco, Best Buy and Macy’s reiterate this.
Let us take a look at the journey of a marquee specialty retailer in the USA, in the integrated
multi-channel retail program. The strategy was to increase sales by adopting and enhancing
different consumer channels. The retailer commenced multi-channel retail initiatives with
the objective of enabling its customers to ’buy anywhere’ and to ‘fulfill orders anywhere’.
Anticipating business challenges like a reduction in customer base because of increased
shipping costs, the retailer refined the business processes, set up new channels like mobile
and social media, and integrated independent systems. The retailer also reviewed processes
for Point of Sale (POS), Data Warehouse (DW), e-commerce, and Enterprise Resource
Planning (ERP) for seamless processes and uniform customer experience. This resulted in
enhanced customer satisfaction and increased store sales when customers came in to
collect their online orders.
The example above not only strengthens the business case for pursuing an integrated multichannel retail model but also highlights key metrics that an organization needs to track to
measure success. We have outlined a list of 21 key metrics, the important ones include:
incremental channel sales, sales per customer, share of multi-channel customers to total
number of customers, total brand traffic, and customer satisfaction.
In conclusion, the advent of IMCR is imminent as the multi-channel consumer has already
emerged and the best way to make the most of this opportunity is by having an integrated
approach that binds together an organization’s proposition to its customers in a seamless
manner. The journey is arduous as new types of behavior, innovations and opportunities
emerge. However, having an integrated multi-channel retail view of the organization will
help meet these new developments every time. The time to realign and redo the traditional
channel-silo model is now. IMCR is the new normal.
About the Authors
Anil Rajpal – Practice Head, Global Consulting Practice – Retail and CPG
Anil has over 17 years of experience in management consulting and operations and
currently heads the Retail and Consumer Products Group for TCS’ Global Consulting Practice
in India. In this role, he has been instrumental in establishing and developing the consulting
practice in India. Prior to TCS, Anil worked with Kurt Salmon Associates, India.
As a management consultant, Anil has been passionately involved in formulating business
strategies and setting up operations of several leading Indian and international retail,
e-commerce, and consumer product companies.
He is also actively involved with leading industry associations for which he spearheads
strategic initiatives. Most recently, Anil showcased the India retail opportunity to
international retailers, and conceptualized and executed India’s first ‘Operations
Benchmarking’ study.
Kedar Mehta – Engagement Lead, Global Consulting Practice – Retail and CPG
Kedar is an Engagement Lead with TCS’ Global Consulting Practice – Retail and Consumer
Products Group - and consults with retailers in their strategy, marketing, and operations
improvement initiatives. He has nearly 10 years of work experience in retail, e-business, and
management consulting and has worked with international as well as Indian players, across
multiple categories, formats, and markets. In his current role, he has led a number of
thought leadership initiatives, such as developing a go-to-market framework for integrated
multi-channel retailing and conducting India's first-ever Retail Operations Benchmarking
and Excellence Survey (ROBES) with FICCI and the Retailers Association of India (RAI)
respectively.
Abhishek Pangaria – Engagement Lead, Global Consulting Practice – Retail and CPG
Abhishek has over 13 years of international experience in management and technology
consulting. Currently, as an Engagement Manager with TCS’ Global Consulting Practice,
Abhishek works with leading organizations on diverse areas like business planning, supply
chain improvement, technology change and adoption, development of e-commerce, and
multi-channel operations. Abhishek is passionate about helping young entrepreneurs set up
businesses and has been an entrepreneur himself.
Deepali Malhotra – Consultant, Global Consulting Practice – Retail and CPG
9
Deepali is a Consultant with TCS’ Global Consulting Practice – Retail and Consumer Products
Group and has around 6 years of experience in operations improvement and IT functional
consulting in retail and e-commerce. She has worked for global retail clients across three
continents - North America, Europe, and Asia, and across multiple categories and formats.
She has also published whitepapers and articles in academic journals, and has helped to
execute India’s first TCS-led Retail Operations Benchmarking and Excellence Survey (ROBES)
with the Retailers Association of India (RAI).
10
This paper covers best practices on these three critical aspects and proposes, what we call, a
pragmatic roadmap for attaining an integrated multi-channel state.
These steps must be repeated on a regular and consistent basis to adapt to a truly holistic
integrated multi-channel way of retailing. New operating models will emerge, competitors
will catch up, consumer expectations will change – what’s superior service today is common
tomorrow, with new tools and system enablers coming in. It is important to observe here
that this is the new way of doing business. Best practices highlighted from the likes of Home
Depot, Tesco, Best Buy and Macy’s reiterate this.
Let us take a look at the journey of a marquee specialty retailer in the USA, in the integrated
multi-channel retail program. The strategy was to increase sales by adopting and enhancing
different consumer channels. The retailer commenced multi-channel retail initiatives with
the objective of enabling its customers to ’buy anywhere’ and to ‘fulfill orders anywhere’.
Anticipating business challenges like a reduction in customer base because of increased
shipping costs, the retailer refined the business processes, set up new channels like mobile
and social media, and integrated independent systems. The retailer also reviewed processes
for Point of Sale (POS), Data Warehouse (DW), e-commerce, and Enterprise Resource
Planning (ERP) for seamless processes and uniform customer experience. This resulted in
enhanced customer satisfaction and increased store sales when customers came in to
collect their online orders.
The example above not only strengthens the business case for pursuing an integrated multichannel retail model but also highlights key metrics that an organization needs to track to
measure success. We have outlined a list of 21 key metrics, the important ones include:
incremental channel sales, sales per customer, share of multi-channel customers to total
number of customers, total brand traffic, and customer satisfaction.
In conclusion, the advent of IMCR is imminent as the multi-channel consumer has already
emerged and the best way to make the most of this opportunity is by having an integrated
approach that binds together an organization’s proposition to its customers in a seamless
manner. The journey is arduous as new types of behavior, innovations and opportunities
emerge. However, having an integrated multi-channel retail view of the organization will
help meet these new developments every time. The time to realign and redo the traditional
channel-silo model is now. IMCR is the new normal.
About the Authors
Anil Rajpal – Practice Head, Global Consulting Practice – Retail and CPG
Anil has over 17 years of experience in management consulting and operations and
currently heads the Retail and Consumer Products Group for TCS’ Global Consulting Practice
in India. In this role, he has been instrumental in establishing and developing the consulting
practice in India. Prior to TCS, Anil worked with Kurt Salmon Associates, India.
As a management consultant, Anil has been passionately involved in formulating business
strategies and setting up operations of several leading Indian and international retail,
e-commerce, and consumer product companies.
He is also actively involved with leading industry associations for which he spearheads
strategic initiatives. Most recently, Anil showcased the India retail opportunity to
international retailers, and conceptualized and executed India’s first ‘Operations
Benchmarking’ study.
Kedar Mehta – Engagement Lead, Global Consulting Practice – Retail and CPG
Kedar is an Engagement Lead with TCS’ Global Consulting Practice – Retail and Consumer
Products Group - and consults with retailers in their strategy, marketing, and operations
improvement initiatives. He has nearly 10 years of work experience in retail, e-business, and
management consulting and has worked with international as well as Indian players, across
multiple categories, formats, and markets. In his current role, he has led a number of
thought leadership initiatives, such as developing a go-to-market framework for integrated
multi-channel retailing and conducting India's first-ever Retail Operations Benchmarking
and Excellence Survey (ROBES) with FICCI and the Retailers Association of India (RAI)
respectively.
Abhishek Pangaria – Engagement Lead, Global Consulting Practice – Retail and CPG
Abhishek has over 13 years of international experience in management and technology
consulting. Currently, as an Engagement Manager with TCS’ Global Consulting Practice,
Abhishek works with leading organizations on diverse areas like business planning, supply
chain improvement, technology change and adoption, development of e-commerce, and
multi-channel operations. Abhishek is passionate about helping young entrepreneurs set up
businesses and has been an entrepreneur himself.
Deepali Malhotra – Consultant, Global Consulting Practice – Retail and CPG
9
Deepali is a Consultant with TCS’ Global Consulting Practice – Retail and Consumer Products
Group and has around 6 years of experience in operations improvement and IT functional
consulting in retail and e-commerce. She has worked for global retail clients across three
continents - North America, Europe, and Asia, and across multiple categories and formats.
She has also published whitepapers and articles in academic journals, and has helped to
execute India’s first TCS-led Retail Operations Benchmarking and Excellence Survey (ROBES)
with the Retailers Association of India (RAI).
10
Multi-Channel Retailing Today
In a FICCI-TCS paper released at Massmerize 2012, the idea of pursuing IMCR to address a
trillion-dollar retail consumption opportunity was presented. The IMCR model that was
envisaged not only had an impact on reaching more consumers and meeting retail demand
quickly across multiple geographies, but also had the potential to directly impact a retailer’s
operating margins and profitability.
Before outlining how retailers can adapt well to a multi-channel consumer and build a multichannel retail roadmap, let’s first take a look at where things stand today. Examples of the
multi-channel retail evolution between developed markets – Europe – and emerging
markets – Asia are highlighted in the following section. We have taken an example of a
leading UK retail group and an Indian department store chain to represent each market.
Global Benchmarking – IMCR Evolution
Illustration from a leading UK retail group
First up is a leading UK retail group that runs a leading department store chain and a
premium food retail supermarket in the country, besides a host of other smaller retail
formats. We have reviewed their IMCR numbers from 2009 to 2012 and projections for end
2013 in figure 1.
Leading UK Retail Group - Multi Channel Retail (MCR) Evolution
Sales
£ Million
2009
2010
Total
7000
7400
Of All Online Orders
Online
393
503
Online Proportion
5.6
6.8
Click & Collect Order
16%
17%
This group has seen that 9 out 10 online customers are still buying at stores and added
incremental sales of £7.6 million in 2009 alone, when they visited the store to collect their
‘click and collect’ orders. While these numbers are encouraging enough to build a retailer’s
case for IMCR initiatives, it is interesting to note that they are yet to target the requirements
of ‘store’ consumers who are buying online. Currently, only 1 out 10 store customers is
buying online. If they are able to increase this trend and proportion of sales online, the
growth opportunity for overall sales is immense.
It will be interesting to compare the IMCR evolution in developed markets like the UK and
the emerging Asian retail markets.
Asian Initiatives – IMCR Evolution
Illustration from a leading department store chain with an online channel, compared to a pure
online fashion store in India
Multi-channel retail is still a relatively new phenomenon in Asia; there are no clear IMCR
numbers of any single retailer as yet. At this point in time, both the store and online retailers
seem to be emerging as independent models. There is no evidence of store retailers being
strong online or online retailers interested in store retailing. This makes it difficult to evaluate
the evolution and potential of IMCR in Asia. We therefore compare a retailer with store and
online channels, with one that only has an online presence. Relevant data of a leading
department store chain with credible online initiatives was compared with the data from a
market leading pure online fashion store, in India, in figure 2.
1. Online channel growth faster and bigger than store
MCR Proportion
Department Store Chain
Store
Footfalls - Mn
Visitors - Mn
ATS - INR
ATS - INR
2012
37
7
2300
1250
20
2013
41
11
2500
1600
100
Growth
1.11
1.57
1.09
1.28
5
13%
8200
685
8.4
22%
16%
2012
8730
877
10.04
26%
20%
2013*
9540
1122
11.76
31%
25%
The share of its IMCR has grown from 7% of its total sales to 20% in 2012 and is projected to
be 25% at the end of 2013, having grown at 27% every year since 2009. Boosting this trend
is the fact that ‘click and collect orders’ are becoming popular among consumers,
constituting nearly 26% of all online orders in 2012 and the number is expected to be 31%
for current year.
Visitors - Mn
Figure 2: A leading department store chain vs. a pure online fashion retailer in India
– IMCR evolution
Figure 1: A leading UK retail group’s IMCR evolution
The share of its online business has grown steadily from £393 million in 2009 to an
estimated £1,122 million in 2013, growing at a healthy 27%. Online business share as a
proportion of the group’s total sales is projected to be 11.76% at the end of 2013.
Online
Source: TCS Internal
Source: TCS Internal
11
Online
7%
2011
Pure Online Fashion Retailer
Stores
Takeaways:
?
The number of visitors for the online fashion retailer increased fivefold – from 20 million
to 100 million, between 2012 and 2013. In comparison, the footfalls and online visitors to
the department store chain only grew by 1.11 and 1.57 times respectively. This means
that department store chains can gain immensely if they focus on online customers, a
number growing faster than its own store traffic, to benchmark and reach the potential
numbers of an online fashion retailer.
?
The Average Transaction Size (ATS) for the department store chain grew by 9% only,
whereas for the pure online fashion retailer, it grew by an impressive 28% between 2012
and 2013. We can infer that consumers are increasingly shopping online and the
department store chain is not utilizing its full growth potential.
12
Multi-Channel Retailing Today
In a FICCI-TCS paper released at Massmerize 2012, the idea of pursuing IMCR to address a
trillion-dollar retail consumption opportunity was presented. The IMCR model that was
envisaged not only had an impact on reaching more consumers and meeting retail demand
quickly across multiple geographies, but also had the potential to directly impact a retailer’s
operating margins and profitability.
Before outlining how retailers can adapt well to a multi-channel consumer and build a multichannel retail roadmap, let’s first take a look at where things stand today. Examples of the
multi-channel retail evolution between developed markets – Europe – and emerging
markets – Asia are highlighted in the following section. We have taken an example of a
leading UK retail group and an Indian department store chain to represent each market.
Global Benchmarking – IMCR Evolution
Illustration from a leading UK retail group
First up is a leading UK retail group that runs a leading department store chain and a
premium food retail supermarket in the country, besides a host of other smaller retail
formats. We have reviewed their IMCR numbers from 2009 to 2012 and projections for end
2013 in figure 1.
Leading UK Retail Group - Multi Channel Retail (MCR) Evolution
Sales
£ Million
2009
2010
Total
7000
7400
Of All Online Orders
Online
393
503
Online Proportion
5.6
6.8
Click & Collect Order
16%
17%
This group has seen that 9 out 10 online customers are still buying at stores and added
incremental sales of £7.6 million in 2009 alone, when they visited the store to collect their
‘click and collect’ orders. While these numbers are encouraging enough to build a retailer’s
case for IMCR initiatives, it is interesting to note that they are yet to target the requirements
of ‘store’ consumers who are buying online. Currently, only 1 out 10 store customers is
buying online. If they are able to increase this trend and proportion of sales online, the
growth opportunity for overall sales is immense.
It will be interesting to compare the IMCR evolution in developed markets like the UK and
the emerging Asian retail markets.
Asian Initiatives – IMCR Evolution
Illustration from a leading department store chain with an online channel, compared to a pure
online fashion store in India
Multi-channel retail is still a relatively new phenomenon in Asia; there are no clear IMCR
numbers of any single retailer as yet. At this point in time, both the store and online retailers
seem to be emerging as independent models. There is no evidence of store retailers being
strong online or online retailers interested in store retailing. This makes it difficult to evaluate
the evolution and potential of IMCR in Asia. We therefore compare a retailer with store and
online channels, with one that only has an online presence. Relevant data of a leading
department store chain with credible online initiatives was compared with the data from a
market leading pure online fashion store, in India, in figure 2.
1. Online channel growth faster and bigger than store
MCR Proportion
Department Store Chain
Store
Footfalls - Mn
Visitors - Mn
ATS - INR
ATS - INR
2012
37
7
2300
1250
20
2013
41
11
2500
1600
100
Growth
1.11
1.57
1.09
1.28
5
13%
8200
685
8.4
22%
16%
2012
8730
877
10.04
26%
20%
2013*
9540
1122
11.76
31%
25%
The share of its IMCR has grown from 7% of its total sales to 20% in 2012 and is projected to
be 25% at the end of 2013, having grown at 27% every year since 2009. Boosting this trend
is the fact that ‘click and collect orders’ are becoming popular among consumers,
constituting nearly 26% of all online orders in 2012 and the number is expected to be 31%
for current year.
Visitors - Mn
Figure 2: A leading department store chain vs. a pure online fashion retailer in India
– IMCR evolution
Figure 1: A leading UK retail group’s IMCR evolution
The share of its online business has grown steadily from £393 million in 2009 to an
estimated £1,122 million in 2013, growing at a healthy 27%. Online business share as a
proportion of the group’s total sales is projected to be 11.76% at the end of 2013.
Online
Source: TCS Internal
Source: TCS Internal
11
Online
7%
2011
Pure Online Fashion Retailer
Stores
Takeaways:
?
The number of visitors for the online fashion retailer increased fivefold – from 20 million
to 100 million, between 2012 and 2013. In comparison, the footfalls and online visitors to
the department store chain only grew by 1.11 and 1.57 times respectively. This means
that department store chains can gain immensely if they focus on online customers, a
number growing faster than its own store traffic, to benchmark and reach the potential
numbers of an online fashion retailer.
?
The Average Transaction Size (ATS) for the department store chain grew by 9% only,
whereas for the pure online fashion retailer, it grew by an impressive 28% between 2012
and 2013. We can infer that consumers are increasingly shopping online and the
department store chain is not utilizing its full growth potential.
12
3. Potential loss of IMCR revenue in 2013 – illustration
2. Potential IMCR revenue proportion in 2013 – illustration
Department Store MCR Revenue Proportion – An Illustration
Department Store Chain – Potential Lost Revenue 2013 - Illustration
Store Visitors – Mn
41
Online Growth
Store Transactions Mn – 10%
4.1
Online Visitors – Mn
11
Online Transactions – 10% in Mn
1.1
Store ATS – INR
2,500
Online ATS – INR
1,600
27
Online Revenue – INR Mn
1,760
Online Visitors – Mn
11
Online Fashion Retailer Growth
Multi-channel Visitors – Mn
11
Potential Online Visitors (2012 to 2013 Growth) – Mn
35
MCR Transactions Mn – 10%
1.1
Potential Online Transaction – 10% in Mn
3.5
Store Revenue – INR Mn
10,250
Online /Store Visitors %
5
MCR ATS = Online Fashion Retailer ATS - INR
1,600
Potential Online ATS – INR
1,600
MCR Revenue – INR Mn
1,760
Potential Online Revenue – INR Mn
5,600
MCR/Total Revenue %
Potential Loss in Revenue – INR Mn
17
Source: TCS Internal
Assumptions:
(3,840)
Source: TCS Internal
Figure 4: Leading department store chain – IMCR revenue proportion
– Illustration – IMCR evolution
Figure 3: A leading department store chain – IMCR revenue proportion
– illustration - IMCR evolution
Takeaways:
?
Online visitors are a subset of store visitors and not unique visitors and hence IMCR
visitors = online visitors constituting 27% of store consumers. This conservative number
is in line with the Asian Hong Kong number of shoppers who shop in more than one
channel of 45% and thereby can be considered a safe assumption
?
We have seen in figure 2 that the online channel of the department store chain grew
faster than its own stores at 1.57 times versus 1.09 times. However, during the same
period the pure online fashion retailer had a fivefold higher growth rate. This potential
loss of revenue for the department store chain translates to INR 3,840 million
?
Number of transactions = number of conversions, for online as well as store have been
estimated at 10%, indicative of the store brand characteristic
?
This is based on a simple hypothesis and the actual numbers could be significantly
different from that in figure 4. The fact is that the trend noted here is true – that,
traditional store retailers, even with credible online initiatives, are still losing out on
potential revenues to pure online players
Takeaways:
13
1.57
?
For 2013, it is assumed that the number of online visitors for the department store chain
is equal to the total multi-channel visitors i.e. 11 million. We see that 10% of the total
multi-channel visitors have transacted at an ATS of INR 1,600, which is equal to that of
the pure online fashion retailer. We can compute the department store chain’s IMCR
revenue to be INR 1,760 million i.e. 17% of total store as sales from multi-channel
consumers
?
This number is interesting as it is potentially in line with the global benchmark number
of the UK retail group, while highlighting the potential of IMCR which probably lies
unutilized today, even by the department store chain in figure 3
14
3. Potential loss of IMCR revenue in 2013 – illustration
2. Potential IMCR revenue proportion in 2013 – illustration
Department Store MCR Revenue Proportion – An Illustration
Department Store Chain – Potential Lost Revenue 2013 - Illustration
Store Visitors – Mn
41
Online Growth
Store Transactions Mn – 10%
4.1
Online Visitors – Mn
11
Online Transactions – 10% in Mn
1.1
Store ATS – INR
2,500
Online ATS – INR
1,600
27
Online Revenue – INR Mn
1,760
Online Visitors – Mn
11
Online Fashion Retailer Growth
Multi-channel Visitors – Mn
11
Potential Online Visitors (2012 to 2013 Growth) – Mn
35
MCR Transactions Mn – 10%
1.1
Potential Online Transaction – 10% in Mn
3.5
Store Revenue – INR Mn
10,250
Online /Store Visitors %
5
MCR ATS = Online Fashion Retailer ATS - INR
1,600
Potential Online ATS – INR
1,600
MCR Revenue – INR Mn
1,760
Potential Online Revenue – INR Mn
5,600
MCR/Total Revenue %
Potential Loss in Revenue – INR Mn
17
Source: TCS Internal
Assumptions:
(3,840)
Source: TCS Internal
Figure 4: Leading department store chain – IMCR revenue proportion
– Illustration – IMCR evolution
Figure 3: A leading department store chain – IMCR revenue proportion
– illustration - IMCR evolution
Takeaways:
?
Online visitors are a subset of store visitors and not unique visitors and hence IMCR
visitors = online visitors constituting 27% of store consumers. This conservative number
is in line with the Asian Hong Kong number of shoppers who shop in more than one
channel of 45% and thereby can be considered a safe assumption
?
We have seen in figure 2 that the online channel of the department store chain grew
faster than its own stores at 1.57 times versus 1.09 times. However, during the same
period the pure online fashion retailer had a fivefold higher growth rate. This potential
loss of revenue for the department store chain translates to INR 3,840 million
?
Number of transactions = number of conversions, for online as well as store have been
estimated at 10%, indicative of the store brand characteristic
?
This is based on a simple hypothesis and the actual numbers could be significantly
different from that in figure 4. The fact is that the trend noted here is true – that,
traditional store retailers, even with credible online initiatives, are still losing out on
potential revenues to pure online players
Takeaways:
13
1.57
?
For 2013, it is assumed that the number of online visitors for the department store chain
is equal to the total multi-channel visitors i.e. 11 million. We see that 10% of the total
multi-channel visitors have transacted at an ATS of INR 1,600, which is equal to that of
the pure online fashion retailer. We can compute the department store chain’s IMCR
revenue to be INR 1,760 million i.e. 17% of total store as sales from multi-channel
consumers
?
This number is interesting as it is potentially in line with the global benchmark number
of the UK retail group, while highlighting the potential of IMCR which probably lies
unutilized today, even by the department store chain in figure 3
14
4. Online brand traffic for a department store is going to outpace its store traffic by 2018
Department Store Chain
Retail
Stores
Online
Footfalls - Mn
Visitors - Mn
37
7
2013
41
11
Growth
1.11
1.57
2014
45
17
Bisleri Shoppe – Retail Outlets
2015
50
27
2016
56
43
2017
62
67
2018 - Online Brand Traffic
69
105
In 2012, Bisleri International set up ‘Bisleri Shoppe’, an exclusive retail format to sell bottled
water. The company believes that the move will boost the brand visibility and counter
competition. Bisleri Shoppe, typically a 20 feet by 10 feet store, was to be set up with an
estimated investment of INR 0.3 Million per store. Post the review of the response to these
outlets, the company intended to work on deployment strategies to take the initiative
pan-India.
Figure 5: Store vs. online brand traffic – department store chain,
in 2018– IMCR evolution
Takeaways:
As figure 5 shows, the drivers for growth of future sales are the online channels, as per
global trends today. This is based on the number of visitors who will first visit the
department store chain’s website to evaluate and identify their purchases, before going
to the physical store
We can hence conclude that multi-channel retailing in India (and APAC) as a whole still has
some way to go. Though a few retailers have begun to realize and reap the benefits of online
sales as well as improved productivity from the multi-channel retailing model, such
examples are few and far between. This is especially highlighted by the fact that these
numbers are not available for most traditional retailers, even with those who have credible
online initiatives.
As consumers have already embraced multiple channels to complete the shopping
experience, it is time retailers took note of this behavior and gained from the operational
efficiencies.
15
We have seen retailers taking a cue from their global counterparts and experimenting with
multi-channel retailing and the growing potential of online retailing in India and in Asia
Pacific (APAC). FMCG players are also launching innovative multi-channel initiatives of their
own. We will provide a few examples, which will not only highlight the effectiveness of the
IMCR model but also highlight the importance of being available to the consumer anytime,
anywhere.
2012
Source: TCS Internal
?
Inspiration from Retailers –
FMCG Players innovating in Multi-Channel
Dabur establishes a Marketplace on Snapdeal.com
Dabur claims that they are the first FMCG in India to have their online portal
(www.daburuveda.com). In 2011, Dabur India established its online trading platform in
collaboration with the leading Indian e-commerce player snapdeal.com. It retailed 52
products across three categories of health foods, ayurveda and organic, and combination
packs. Customers could pay online or opt for cash on delivery via the trading portal.
Coca-Cola Online Goes Online and Mobile
On the web: Coca-Cola India recently piloted an online store in Ahmedabad (India) –
Coke2home.com – for home delivery of all its products in an attempt to tap the burgeoning
e-commerce market. This is a first-of-its-kind move by an FMCG company. The site offers
products such as energy drinks, juice drinks, mixers, soda, and packaged drinking water and
home delivery on orders above INR 300. The portal facilitates individual, bulk, and monthlybased orders.
There is a registration process on the site for regular orders, whereas for a bulk order, a form
has to be filled to connect with the company representative. We were not able to study the
service as it is available only in Ahmedabad. However, it appears that once a user places an
order, the company provides them with an order number that can be tracked on the
website. It claims that orders placed before 12 noon will be delivered the same day.
16
4. Online brand traffic for a department store is going to outpace its store traffic by 2018
Department Store Chain
Retail
Stores
Online
Footfalls - Mn
Visitors - Mn
37
7
2013
41
11
Growth
1.11
1.57
2014
45
17
Bisleri Shoppe – Retail Outlets
2015
50
27
2016
56
43
2017
62
67
2018 - Online Brand Traffic
69
105
In 2012, Bisleri International set up ‘Bisleri Shoppe’, an exclusive retail format to sell bottled
water. The company believes that the move will boost the brand visibility and counter
competition. Bisleri Shoppe, typically a 20 feet by 10 feet store, was to be set up with an
estimated investment of INR 0.3 Million per store. Post the review of the response to these
outlets, the company intended to work on deployment strategies to take the initiative
pan-India.
Figure 5: Store vs. online brand traffic – department store chain,
in 2018– IMCR evolution
Takeaways:
As figure 5 shows, the drivers for growth of future sales are the online channels, as per
global trends today. This is based on the number of visitors who will first visit the
department store chain’s website to evaluate and identify their purchases, before going
to the physical store
We can hence conclude that multi-channel retailing in India (and APAC) as a whole still has
some way to go. Though a few retailers have begun to realize and reap the benefits of online
sales as well as improved productivity from the multi-channel retailing model, such
examples are few and far between. This is especially highlighted by the fact that these
numbers are not available for most traditional retailers, even with those who have credible
online initiatives.
As consumers have already embraced multiple channels to complete the shopping
experience, it is time retailers took note of this behavior and gained from the operational
efficiencies.
15
We have seen retailers taking a cue from their global counterparts and experimenting with
multi-channel retailing and the growing potential of online retailing in India and in Asia
Pacific (APAC). FMCG players are also launching innovative multi-channel initiatives of their
own. We will provide a few examples, which will not only highlight the effectiveness of the
IMCR model but also highlight the importance of being available to the consumer anytime,
anywhere.
2012
Source: TCS Internal
?
Inspiration from Retailers –
FMCG Players innovating in Multi-Channel
Dabur establishes a Marketplace on Snapdeal.com
Dabur claims that they are the first FMCG in India to have their online portal
(www.daburuveda.com). In 2011, Dabur India established its online trading platform in
collaboration with the leading Indian e-commerce player snapdeal.com. It retailed 52
products across three categories of health foods, ayurveda and organic, and combination
packs. Customers could pay online or opt for cash on delivery via the trading portal.
Coca-Cola Online Goes Online and Mobile
On the web: Coca-Cola India recently piloted an online store in Ahmedabad (India) –
Coke2home.com – for home delivery of all its products in an attempt to tap the burgeoning
e-commerce market. This is a first-of-its-kind move by an FMCG company. The site offers
products such as energy drinks, juice drinks, mixers, soda, and packaged drinking water and
home delivery on orders above INR 300. The portal facilitates individual, bulk, and monthlybased orders.
There is a registration process on the site for regular orders, whereas for a bulk order, a form
has to be filled to connect with the company representative. We were not able to study the
service as it is available only in Ahmedabad. However, it appears that once a user places an
order, the company provides them with an order number that can be tracked on the
website. It claims that orders placed before 12 noon will be delivered the same day.
16
On mobile: Coca Cola also launched a mobile version of the site accessible at –
m.coke2home.com. The site provides a QR code, which once scanned, leads a user to the
mobile version of the site on their mobile browser.
Proctor and Gamble (P&G) Samples with Pampers Sales on Walmart.com
Multi-channel Value Chain –
Customer Buying and Consumption Journey
We are witnessing changes in consumers’ buying and consumption patterns. These changes
underscore the importance of a robust IMCR model. We will highlight two examples of how
organizations have adapted to meet the requirements of the multi-channel consumer, by
developing a flexible multi-channel value chain.
P&G tied-up with Walmart.com and offered to give away product samples with purchase of
any Pampers product. Consumers could choose to buy Pampers swaddlers, Pampers baby
dry, cruisers, or training pants from Walmart.com and the product samples would be
shipped for free on purchases over $45.
Coca-Cola India engagement across the Value Chain
Non-store ‘FMCG Retailer’ HomeShop18 opens a ‘Virtual’ Store in India
We have already seen the example of Coca-Cola India’s multi-channel retail initiative; now let
us look at the traditional FMCG value chain.
In 2012, Network18-owned Homeshop18 launched a virtual wall named ‘Scan N Shop’ at the
Terminal 3 (T3) domestic terminal of New Delhi’s-IGI Airport (IGIA). The virtual wall offered
consumers the ability to order by scanning the QR code displayed against each item or over
the phone at the call center. To do so, consumers had to download and install a QR code
scanner built-in within the Homeshop18’s iOS app on their phone. For Blackberry, the BBM
QR code scanner could be used. Once the scanner was installed on the phone, consumers
scanned the QR Code displayed against each product, and were shown product details on
the Homeshop18 mobile website through their mobile browser. Users then clicked on the
‘buy now’ link and followed the checkout process to complete the order.
Product
Idea
Product
Idea
Test
Market
Test
Market
Production
Production
Ahmedabad
Distribution
Retail
Distribution
Online
Consumer
Demand
Fulfilment
Sales &
Promotion
FMCG, Retailer
Sales &
Promotion
FMCG
Retailer
Consumer
Demand
Fulfilment
Home Delivery
Source: TCS Internal
Figure 6: Consumer touch-points impacting the FMCG value chain –
Coca-Cola India
Traditionally, an FMCG company did not connect with the end customer directly; it was the
retailer or distributor who did. We have seen this change with Coca-Cola’s online initiative
where an FMCG company distributes its products through its online channel and takes
responsibility for consumer demand fulfillment by direct home delivery, as shown in figure 6.
If this initiative is successful, it could become the template for FMCG companies to reach out
to the multi-channel consumer through any channel the consumer chooses to engage with.
Tesco – Wine Co-buy Concept – Retail IMCR
With Tesco launching a wine co-buy initiative recently, we take a look at the traditional retail
chain, where the customer is not directly linked to the buying activity – which is derived
purely from demand planning data of past behavior. Figure 7 shows the customer touch
points impacting the retail value chain.
Demand
Planning
Demand
Planning
Buying
Buying
Store, Online
Warehousing
Warehousing
Sales Channel
Distribution
Marketing &
Promotion
Sales &
Service
Store
Store
Store
Sales Channel
Distribution
Marketing &
Promotion
Sales &
Service
Store, Online
Store, Online
Store, Online
Source: TCS Internal
17
Figure 7: Consumer touch-points impacting the retail value chain - Tesco
18
On mobile: Coca Cola also launched a mobile version of the site accessible at –
m.coke2home.com. The site provides a QR code, which once scanned, leads a user to the
mobile version of the site on their mobile browser.
Proctor and Gamble (P&G) Samples with Pampers Sales on Walmart.com
Multi-channel Value Chain –
Customer Buying and Consumption Journey
We are witnessing changes in consumers’ buying and consumption patterns. These changes
underscore the importance of a robust IMCR model. We will highlight two examples of how
organizations have adapted to meet the requirements of the multi-channel consumer, by
developing a flexible multi-channel value chain.
P&G tied-up with Walmart.com and offered to give away product samples with purchase of
any Pampers product. Consumers could choose to buy Pampers swaddlers, Pampers baby
dry, cruisers, or training pants from Walmart.com and the product samples would be
shipped for free on purchases over $45.
Coca-Cola India engagement across the Value Chain
Non-store ‘FMCG Retailer’ HomeShop18 opens a ‘Virtual’ Store in India
We have already seen the example of Coca-Cola India’s multi-channel retail initiative; now let
us look at the traditional FMCG value chain.
In 2012, Network18-owned Homeshop18 launched a virtual wall named ‘Scan N Shop’ at the
Terminal 3 (T3) domestic terminal of New Delhi’s-IGI Airport (IGIA). The virtual wall offered
consumers the ability to order by scanning the QR code displayed against each item or over
the phone at the call center. To do so, consumers had to download and install a QR code
scanner built-in within the Homeshop18’s iOS app on their phone. For Blackberry, the BBM
QR code scanner could be used. Once the scanner was installed on the phone, consumers
scanned the QR Code displayed against each product, and were shown product details on
the Homeshop18 mobile website through their mobile browser. Users then clicked on the
‘buy now’ link and followed the checkout process to complete the order.
Product
Idea
Product
Idea
Test
Market
Test
Market
Production
Production
Ahmedabad
Distribution
Retail
Distribution
Online
Consumer
Demand
Fulfilment
Sales &
Promotion
FMCG, Retailer
Sales &
Promotion
FMCG
Retailer
Consumer
Demand
Fulfilment
Home Delivery
Source: TCS Internal
Figure 6: Consumer touch-points impacting the FMCG value chain –
Coca-Cola India
Traditionally, an FMCG company did not connect with the end customer directly; it was the
retailer or distributor who did. We have seen this change with Coca-Cola’s online initiative
where an FMCG company distributes its products through its online channel and takes
responsibility for consumer demand fulfillment by direct home delivery, as shown in figure 6.
If this initiative is successful, it could become the template for FMCG companies to reach out
to the multi-channel consumer through any channel the consumer chooses to engage with.
Tesco – Wine Co-buy Concept – Retail IMCR
With Tesco launching a wine co-buy initiative recently, we take a look at the traditional retail
chain, where the customer is not directly linked to the buying activity – which is derived
purely from demand planning data of past behavior. Figure 7 shows the customer touch
points impacting the retail value chain.
Demand
Planning
Demand
Planning
Buying
Buying
Store, Online
Warehousing
Warehousing
Sales Channel
Distribution
Marketing &
Promotion
Sales &
Service
Store
Store
Store
Sales Channel
Distribution
Marketing &
Promotion
Sales &
Service
Store, Online
Store, Online
Store, Online
Source: TCS Internal
17
Figure 7: Consumer touch-points impacting the retail value chain - Tesco
18
Tesco has partnered with ‘buyapowa’ to launch wine co-buys since May 2013. This is a groupbuying program, which enables people to refer friends to buy cases of wine at better prices.
The model relies on the power of people’s networks and Tesco’s commitment to deliver
genuine value.
Through the wine co-buys, Tesco is shifting some power to its customers, giving them more
control over the product pricing and a say in which products should be included in the next
co-buy. Tesco may be on a winning proposition given that online sale values are likely to be
high and customers are driving what they want to buy.
Multi-channel Customer Enablement and Regulatory Support –
Example of Jurisdiction
It is very important that in this multi-channel journey, customer interests are protected
through adequate government regulatory support, to minimize conflicts between the
stakeholders. Current regulations are not yet geared up to meet the requirements of this
emerging model.
There are many cases of consumer grievances relating to transactions on online retailer
websites and service delivery, which doesn’t match retailer promise. Consumer forums have
refused to admit these complaints, citing a lack of clarity on jurisdiction. The confusion then
arises as to where the complaint has to be booked – the retailer’s office address, the
warehouse address, or the customer’s address. One such prominent case is related to an
Indian online player – Timtara – where hundreds of complaints were registered with a
consumer forum called Akosha[1]. Most of the complaints were related to delivery failures
and refund order delays. In a multi-channel world, powered primarily by e-commerce and
mobile channels, similar customer issues will increase, if not addressed immediately.
The Indian government has taken initial steps to address this matter. They have tried to
balance the onus on both the company and the consumer when the legislature drafted the
jurisdiction clause in the Consumer Protection Act. It would be impractical for a company to
represent itself everywhere – thereby justifying the customer having to file the complaint in
the place where the company conducts its business. According to Akosha, the Consumer
Protection Amendment Bill could have proposed an amendment to Section 11 of the Act
that deals with jurisdiction and would have incorporated a separate jurisdiction clause
directed at the e-commerce sector. Such a clause would have clearly laid down that in ecommerce cases, a complaint should be filed where the cause of action arises, irrespective of
the company’s physical location. This could have been a perfect, even though overly
legislative, redressal of an issue that is already a major problem for consumers making online
purchases. Another way out could be to have the National Consumer Disputes Redressal
Commission lay down clear directives in this regard, clarifying that ‘cause of action’ be given
precedence when dealing with jurisdiction issues specific to e-commerce complaints.
Using Consumer Shopper Insights, managing Channel Conflict and enabling
Organizational Structures for Integrated Multichannel Retailingy
We had detailed interactions with Kurush Grant, Chairman, ITC Limited (a leading Indian
FMCG company). Here are the highlights of the key organizational imperatives for shaping
the contours of a robust IMCR roadmap. These have been synchronized with our approach in
the following section:
A. Shopper Insight: Consumers want more
How IMCR can leverage this Insight
Consumers want to research a product or
service and buy from a channel with the best
perceived benefit
Decision making and purchase behavior
demonstrated are different and hence role of each
channel can be defined to deliver an 'integrated
buying experience'
Consumers expect to see consistent product
range, promotions, and customer service across
channels
?
?
An integrated 'channel assortment strategy'
must be defined to set consumer expectation
Out of Stock (OOS) leads to channel dissonance
Consumers want a personalized shopping
experience
An integrated back end data management system
to capture 'trending purchase behavior' across
channels to generate shopper analytics
Consumers expect to participate in designing
and marketing of products or services
A 'three way communication' between consumers,
retailers, and marketers must be established
Consumers seek convenience on repetitive
purchases
An integrated system which captures the history
of all purchases for ease of re-use (e.g. while
purchasing e-tickets, most airlines prompt the
passenger details stored in their memory thus
reducing the purchase cycle time)
B. Channels operating in Silos
How IMCR can leverage this Insight
A new channel is often seen as competition to
existing channels leading to cannibalization
Short term channel conflict will continue to play till
such time retailers identify 'new hook' for
consumers outside of price discounting (Q Ratio[2])
Organizations have a separate metric of
evaluating each channel
An 'integrated channel Profit and Loss (P&L)' must
be created
May lead to complexity or increase in cost if
processes are not synchronized
Investment in technology to ensure 'no overlap of
processes' between channels
Conflict in retailing with the increased presence
of cash and carry
A segmented approach of partnership can be
driven for:
? Distribution: By geography, identified portfolio
? In-store sales: Targeting individual shoppers
? Targeting new channels: Institutions
This example illustrates how many similar initiatives need to be taken at national level and
old consumer protection norms need to be reviewed to enable this multi-channel retail
business model to succeed.
19
[1] Akosha.com is an online consumer complaints forum, founded by Ankur Singla, in India
[2] It is the ratio of a company’s market cap to value of its tangible asset. If > 1, it means that markets believe that part of
company’s value comes from its non-tangible assets such as brand equity, differentiation, innovation, customer
experience, market dominance, customer loyalty and skillful execution. International retailers are regularly
20
Tesco has partnered with ‘buyapowa’ to launch wine co-buys since May 2013. This is a groupbuying program, which enables people to refer friends to buy cases of wine at better prices.
The model relies on the power of people’s networks and Tesco’s commitment to deliver
genuine value.
Through the wine co-buys, Tesco is shifting some power to its customers, giving them more
control over the product pricing and a say in which products should be included in the next
co-buy. Tesco may be on a winning proposition given that online sale values are likely to be
high and customers are driving what they want to buy.
Multi-channel Customer Enablement and Regulatory Support –
Example of Jurisdiction
It is very important that in this multi-channel journey, customer interests are protected
through adequate government regulatory support, to minimize conflicts between the
stakeholders. Current regulations are not yet geared up to meet the requirements of this
emerging model.
There are many cases of consumer grievances relating to transactions on online retailer
websites and service delivery, which doesn’t match retailer promise. Consumer forums have
refused to admit these complaints, citing a lack of clarity on jurisdiction. The confusion then
arises as to where the complaint has to be booked – the retailer’s office address, the
warehouse address, or the customer’s address. One such prominent case is related to an
Indian online player – Timtara – where hundreds of complaints were registered with a
consumer forum called Akosha[1]. Most of the complaints were related to delivery failures
and refund order delays. In a multi-channel world, powered primarily by e-commerce and
mobile channels, similar customer issues will increase, if not addressed immediately.
The Indian government has taken initial steps to address this matter. They have tried to
balance the onus on both the company and the consumer when the legislature drafted the
jurisdiction clause in the Consumer Protection Act. It would be impractical for a company to
represent itself everywhere – thereby justifying the customer having to file the complaint in
the place where the company conducts its business. According to Akosha, the Consumer
Protection Amendment Bill could have proposed an amendment to Section 11 of the Act
that deals with jurisdiction and would have incorporated a separate jurisdiction clause
directed at the e-commerce sector. Such a clause would have clearly laid down that in ecommerce cases, a complaint should be filed where the cause of action arises, irrespective of
the company’s physical location. This could have been a perfect, even though overly
legislative, redressal of an issue that is already a major problem for consumers making online
purchases. Another way out could be to have the National Consumer Disputes Redressal
Commission lay down clear directives in this regard, clarifying that ‘cause of action’ be given
precedence when dealing with jurisdiction issues specific to e-commerce complaints.
Using Consumer Shopper Insights, managing Channel Conflict and enabling
Organizational Structures for Integrated Multichannel Retailingy
We had detailed interactions with Kurush Grant, Chairman, ITC Limited (a leading Indian
FMCG company). Here are the highlights of the key organizational imperatives for shaping
the contours of a robust IMCR roadmap. These have been synchronized with our approach in
the following section:
A. Shopper Insight: Consumers want more
How IMCR can leverage this Insight
Consumers want to research a product or
service and buy from a channel with the best
perceived benefit
Decision making and purchase behavior
demonstrated are different and hence role of each
channel can be defined to deliver an 'integrated
buying experience'
Consumers expect to see consistent product
range, promotions, and customer service across
channels
?
?
An integrated 'channel assortment strategy'
must be defined to set consumer expectation
Out of Stock (OOS) leads to channel dissonance
Consumers want a personalized shopping
experience
An integrated back end data management system
to capture 'trending purchase behavior' across
channels to generate shopper analytics
Consumers expect to participate in designing
and marketing of products or services
A 'three way communication' between consumers,
retailers, and marketers must be established
Consumers seek convenience on repetitive
purchases
An integrated system which captures the history
of all purchases for ease of re-use (e.g. while
purchasing e-tickets, most airlines prompt the
passenger details stored in their memory thus
reducing the purchase cycle time)
B. Channels operating in Silos
How IMCR can leverage this Insight
A new channel is often seen as competition to
existing channels leading to cannibalization
Short term channel conflict will continue to play till
such time retailers identify 'new hook' for
consumers outside of price discounting (Q Ratio[2])
Organizations have a separate metric of
evaluating each channel
An 'integrated channel Profit and Loss (P&L)' must
be created
May lead to complexity or increase in cost if
processes are not synchronized
Investment in technology to ensure 'no overlap of
processes' between channels
Conflict in retailing with the increased presence
of cash and carry
A segmented approach of partnership can be
driven for:
? Distribution: By geography, identified portfolio
? In-store sales: Targeting individual shoppers
? Targeting new channels: Institutions
This example illustrates how many similar initiatives need to be taken at national level and
old consumer protection norms need to be reviewed to enable this multi-channel retail
business model to succeed.
19
[1] Akosha.com is an online consumer complaints forum, founded by Ankur Singla, in India
[2] It is the ratio of a company’s market cap to value of its tangible asset. If > 1, it means that markets believe that part of
company’s value comes from its non-tangible assets such as brand equity, differentiation, innovation, customer
experience, market dominance, customer loyalty and skillful execution. International retailers are regularly
20
C. Organizational Structures and Processes
Creating common goals (no individual channel
goals must be set)
Diminishing role of 'sales push' with
'replenishment' and 'rate of sell out' being
driven by marketing and automated or
integrated supply chain systems
How IMCR can leverage this Insight
?
Head of a channel must 'create and integrate'
all channel strategies to deliver a 'common
goal'
?
With technology investment across channels,
stock loading through sell-in will be replaced
by 'replenishment' orders
Need to impact rate of sell out (and in turn
stock loading) will determine organization's
structures
Vendor managed inventory (VMI) will play a
significant role
?
?
We have examined the positive results of multi-channel retailing; now let us take a look at
the basic building blocks of this model. We have mapped the multi-channel consumer
buying patterns and observed that they have become increasingly channel agnostic. This
makes it vital that retailers reach out to customers wherever they are - stores, mobiles,
Internet, TV, phones, airports, magazines, or their homes. The only viable way to achieve this
is by adopting the integrated multi-channel retailing model.
Approach for Integrated Multi-Channel Retailing
There are some key questions that crop up when companies look to reorient their business
model to become a truly integrated multi-channel retail organization. These questions
include:
?
Where do we begin our multi-channel journey?
?
What are the resources needed to undertake multi-channel initiatives?
?
How do we assimilate our multi-channel initiatives?
?
How do we measure effectiveness of our efforts?
?
How do we sustain the benefits that we may accrue?
In our view, the retailers must adopt a holistic approach encompassing the following
aspects, which need to be aligned with each other to maximize multi-channel presence:
I
Defining operating strategy and model: leading to right governance and cross channel
collaboration
1. Business and channel strategy
2. Assortment strategy
3. Organization structure, KPIs
II
Shaping customer experience: leading to seamless shopping behavior across channels
4. Pricing
5. Service
6. Customer order fulfilment
III Deploying processes and systems: leading to one view of the customer, inventory and
orders across channels
Defining
Operating
Strategy &
Model
Shaping
Customer
Experience
Deploying
Processes &
Systems
Figure 8: Approach for integrated market retailing
21
22
C. Organizational Structures and Processes
Creating common goals (no individual channel
goals must be set)
Diminishing role of 'sales push' with
'replenishment' and 'rate of sell out' being
driven by marketing and automated or
integrated supply chain systems
How IMCR can leverage this Insight
?
Head of a channel must 'create and integrate'
all channel strategies to deliver a 'common
goal'
?
With technology investment across channels,
stock loading through sell-in will be replaced
by 'replenishment' orders
Need to impact rate of sell out (and in turn
stock loading) will determine organization's
structures
Vendor managed inventory (VMI) will play a
significant role
?
?
We have examined the positive results of multi-channel retailing; now let us take a look at
the basic building blocks of this model. We have mapped the multi-channel consumer
buying patterns and observed that they have become increasingly channel agnostic. This
makes it vital that retailers reach out to customers wherever they are - stores, mobiles,
Internet, TV, phones, airports, magazines, or their homes. The only viable way to achieve this
is by adopting the integrated multi-channel retailing model.
Approach for Integrated Multi-Channel Retailing
There are some key questions that crop up when companies look to reorient their business
model to become a truly integrated multi-channel retail organization. These questions
include:
?
Where do we begin our multi-channel journey?
?
What are the resources needed to undertake multi-channel initiatives?
?
How do we assimilate our multi-channel initiatives?
?
How do we measure effectiveness of our efforts?
?
How do we sustain the benefits that we may accrue?
In our view, the retailers must adopt a holistic approach encompassing the following
aspects, which need to be aligned with each other to maximize multi-channel presence:
I
Defining operating strategy and model: leading to right governance and cross channel
collaboration
1. Business and channel strategy
2. Assortment strategy
3. Organization structure, KPIs
II
Shaping customer experience: leading to seamless shopping behavior across channels
4. Pricing
5. Service
6. Customer order fulfilment
III Deploying processes and systems: leading to one view of the customer, inventory and
orders across channels
Defining
Operating
Strategy &
Model
Shaping
Customer
Experience
Deploying
Processes &
Systems
Figure 8: Approach for integrated market retailing
21
22
The following section covers the key initiatives and best practices, and proposes a pragmatic
roadmap of attaining the integrated state.
Initiatives, Roadmap, and Best Practices for Integrated
Multi-channel Retailing
I
Defining Operating Strategy and Model
2. Assortment strategy
1. Operating strategy and multi-channel model
Retailers tend to look at their channels in isolation when they are drawing up their longterm or medium term business strategies. They tend to draw up different strategies for the
store, online, catalog, and mobile channels. Often, these strategies are not in line with the
individual objectives and the resulting multi-channel model is unable to achieve sales
impact, improve operational efficiencies, and enhance customer experience.
For example, the objective of a multi-channel model is to increase a retailer’s sales, yet the
store rollout plan gets 100 stores, while critical functionalities such as Buy Online, Pick InStore (BOPIS) are not enabled on the e-commerce platform. A single cohesive business
strategy that encompasses all the channels and draws up a suitable multi-channel model to
meet the strategic objectives has to be developed.
Additionally, companies need to identify key objectives for pursuing an integrated multichannel retail model and strategic elements that drive the organization. Once a retailer has
identified one (or more) of these strategies, the next step is to shape the multi-channel
model – spanning the multi-channel environment the retailer operates in. Here are a few
illustrations that highlight the approach and provide a glimpse of how this activity needs to
be taken at an organizational level. Typically, there are four broad areas of strategic intent
that can be identified for the IMCR approach:
1.
23
both the store and online channels. Alternatively, an organization could have two separate
category managers for store and online, and store operations (on the floor) decides to ‘price
match’ the online store pricing using a store manager discount option in the POS system.
How does an organization decide which option to adopt? The retailer needs to address all the
multi-channel model elements comprehensively to become a multi-channel organization
across all markets, not limited by geography – for example, Tesco and Sears.
?
Determine assortment roles – Convenient, sporadic, regular, exclusive
?
Determine assortment plans– Sales driver, buzz creator, competition match, margin
driver
Following this, the assortment processes – procurement, distribution, marketing, and
customer order fulfillment – are then synchronized with this framework and enabled out at
a channel level. Pricing and profitability variables are relatively simple linear computations,
while allocations and transfers depend upon the importance quotient of the stores for
selling a particular product, as shown in figure 9.
Assortment Roles
Convenient
Sporadic
Regular
Product 1
#
Product 2
#
Product 3
#
Product 4
#
Product 5
Exclusive
#
Business Strategy
Multi-channel Model
Establish a new
'sales post'
Establish a digital channel as an extension of the store.
Online, catalog, and mobile customer orders to be
fulfilled from the nearest physical store
Tesco
JC Penney
Figure 9: Assortment Roles
Macy's
There is a need to introduce a third pillar in shaping the assortment strategy. This includes
the ‘multiple channels’ that a retailer operates in today and factors in the ones they plan to
operate in the future.
2.
Capture customer's
'share of wallet'
profitably
Re-visit existing store sizes on locations, in lieu of new
digital channels, and increase transactions from
expensive stores to cheap online channels
3.
Optimized customer
order fulfillment
Establish regional stores only, which will act as
regional retail brand hubs. All channel orders to be
fulfilled by regional stores
4.
Improved 'customer
experience'
One unique ID of the customer, single product pricing,
and integrated customer service – across all channels
for seamless brand experience
Best Practices
Deciding the retail assortment for a standalone channel – be it a physical store or online or
mobile – the typical assortment planning activity needs to be carried out on two broad
pillars of assortment strategy:
Assortment Plans
Sales Driver
Buzz Creator
Competition
Match
Margin Driver
Source: TCS Internal
Best Buy
This illustration highlights one scenario against each of the four strategy objectives. However,
it will become more complex when the retailer has multiple strategies and multiple tactical
options available to achieve the same model. For example, single product pricing could be
achieved through having a common item master and a single category manager managing
?
Channels – Store, online, mobile, catalog (taking the four main ones)
24
The following section covers the key initiatives and best practices, and proposes a pragmatic
roadmap of attaining the integrated state.
Initiatives, Roadmap, and Best Practices for Integrated
Multi-channel Retailing
I
Defining Operating Strategy and Model
2. Assortment strategy
1. Operating strategy and multi-channel model
Retailers tend to look at their channels in isolation when they are drawing up their longterm or medium term business strategies. They tend to draw up different strategies for the
store, online, catalog, and mobile channels. Often, these strategies are not in line with the
individual objectives and the resulting multi-channel model is unable to achieve sales
impact, improve operational efficiencies, and enhance customer experience.
For example, the objective of a multi-channel model is to increase a retailer’s sales, yet the
store rollout plan gets 100 stores, while critical functionalities such as Buy Online, Pick InStore (BOPIS) are not enabled on the e-commerce platform. A single cohesive business
strategy that encompasses all the channels and draws up a suitable multi-channel model to
meet the strategic objectives has to be developed.
Additionally, companies need to identify key objectives for pursuing an integrated multichannel retail model and strategic elements that drive the organization. Once a retailer has
identified one (or more) of these strategies, the next step is to shape the multi-channel
model – spanning the multi-channel environment the retailer operates in. Here are a few
illustrations that highlight the approach and provide a glimpse of how this activity needs to
be taken at an organizational level. Typically, there are four broad areas of strategic intent
that can be identified for the IMCR approach:
1.
23
both the store and online channels. Alternatively, an organization could have two separate
category managers for store and online, and store operations (on the floor) decides to ‘price
match’ the online store pricing using a store manager discount option in the POS system.
How does an organization decide which option to adopt? The retailer needs to address all the
multi-channel model elements comprehensively to become a multi-channel organization
across all markets, not limited by geography – for example, Tesco and Sears.
?
Determine assortment roles – Convenient, sporadic, regular, exclusive
?
Determine assortment plans– Sales driver, buzz creator, competition match, margin
driver
Following this, the assortment processes – procurement, distribution, marketing, and
customer order fulfillment – are then synchronized with this framework and enabled out at
a channel level. Pricing and profitability variables are relatively simple linear computations,
while allocations and transfers depend upon the importance quotient of the stores for
selling a particular product, as shown in figure 9.
Assortment Roles
Convenient
Sporadic
Regular
Product 1
#
Product 2
#
Product 3
#
Product 4
#
Product 5
Exclusive
#
Business Strategy
Multi-channel Model
Establish a new
'sales post'
Establish a digital channel as an extension of the store.
Online, catalog, and mobile customer orders to be
fulfilled from the nearest physical store
Tesco
JC Penney
Figure 9: Assortment Roles
Macy's
There is a need to introduce a third pillar in shaping the assortment strategy. This includes
the ‘multiple channels’ that a retailer operates in today and factors in the ones they plan to
operate in the future.
2.
Capture customer's
'share of wallet'
profitably
Re-visit existing store sizes on locations, in lieu of new
digital channels, and increase transactions from
expensive stores to cheap online channels
3.
Optimized customer
order fulfillment
Establish regional stores only, which will act as
regional retail brand hubs. All channel orders to be
fulfilled by regional stores
4.
Improved 'customer
experience'
One unique ID of the customer, single product pricing,
and integrated customer service – across all channels
for seamless brand experience
Best Practices
Deciding the retail assortment for a standalone channel – be it a physical store or online or
mobile – the typical assortment planning activity needs to be carried out on two broad
pillars of assortment strategy:
Assortment Plans
Sales Driver
Buzz Creator
Competition
Match
Margin Driver
Source: TCS Internal
Best Buy
This illustration highlights one scenario against each of the four strategy objectives. However,
it will become more complex when the retailer has multiple strategies and multiple tactical
options available to achieve the same model. For example, single product pricing could be
achieved through having a common item master and a single category manager managing
?
Channels – Store, online, mobile, catalog (taking the four main ones)
24
As a result of this addition, IMCR assortment strategy actually now needs to work in three
dimensions: roles, plans, and channels, as shown in figure 10.
Assortment Roles
Sporadic
Convenient
Regular
Exclusive
Channel
#
Store,
Catalog
Product 1
Product 2
Online,
Mobile
#
Product 3
Product 4
Product 5
#
Online,
Mobile
#
Online,
Mobile
Store,
Online,
Mobile,
Catalog
#
Assortment Plans
Competition
Match
Buzz
Creator
Sales Driver
Margin
Driver
Channel
After this is done, the assortment processes – procurement, distribution, marketing, and
customer order fulfillment, need to be realigned with the channel’s characteristic processes
and designated channel roles.
Pricing and profitability variables are now multi-linear computations since different channels
have different cost and service structures and yet the organization, must come up with a
consistent pricing across all channels. Allocations and transfers will need to be devised
depending upon the ‘affinity’ quotient of a ‘channel’ for selling a particular product.
The dynamics of an IMCR environment mandates that retailers need to move towards an
integrated continuous assortment planning approach. The integrated multi-channel
assortment plan must take in account the demands of all channels as an aggregate and
provide the correct allocation to each selling medium.
One of the main challenges in achieving this is the ability to accurately estimate demand in
each channel. Retailers find it difficult to keep up with the latest customer requirements,
irrespective of the channels they shop in. Retailers need to get an insight into which products
are the most and least successful, in the assortment mix that they have chosen for a
particular period. They need to develop an organization-wide quick response time for
changing trends and customer expectations, as mastered by Zara.
Source: TCS Internal
3. Organization Structure, KPIs
Figure 10: Assortment Roles with Channel Mix
To further refine the assortment plan, each channel will play a unique role in delivering the
strategy:
?
Channel role – Aggregate (all products), select (fast selling items), complement
(attachments and accessories), and differentiate (limited items)
An approach towards IMCR assortment strategy is highlighted in figure 11.
Assortment
Roles
Convenient
Sporadic
Regular
Product 1
#
Product 2
#
Product 3
#
Product 4
Product 5
Assortment
Plans
Exclusive
#
#
Sales
Driver
Buzz
Creator
Competition
Match
Margin
Driver
Channel
Channel Role
Store
Differentiate
Catalog
Complement
Online
Differentiate
Mobile
Differentiate
Online
Aggregate
Mobile
Select
Online
Aggregate
Mobile
Select
Store
Aggregate
Online
Aggregate
Mobile
Complement
Catalog
Complement
Channel
Channel Role
A multi-channel retailer can align the organizational structure in two ways:
?
A fully coordinated organization with a single P&L and joint decision-making that
optimizes total firm profits
?
A decentralized structure in which each channel has a separate P&L. Decisions for each
channel may be taken within the channel itself or there could be limited inter-channel
decision-making during the annual planning exercise
At the early stage of e-commerce development, some retailers intentionally gave a great
deal of independence to their online channel to attract executive talent and to encourage its
growth. For example, even though Walmart is known for its centralized organizational
structure, Walmart.com was established as a subsidiary with a fresh management team and
chose to locate its headquarters near Silicon Valley rather than at Bentonville, Arkansas.
Consistency across channels in terms of merchandising, service, and promotion — remains a
challenge for most retailers. In brick and mortar stores, the most well accepted performance
metrics are same-store sales, sales, and gross margin per square foot (GMROF). However,
these metrics do not apply to the online or mobile channels. A multi-channel retailer needs
to determine how to measure the impact of marketing actions in one channel on consumer
awareness, brand preference, sales, profit, and customer satisfaction in the retailer’s other
channels.
Most retailers manage their channels in a decentralized fashion (as shown in figure 12) and
maintain separate teams of inventory management, merchandising, marketing, finance,
analytics, and product development within each channel. Generally, the head of online
Source: TCS Internal
25
Figure 11: Assortment Roles with channel mix and specific channel roles
26
As a result of this addition, IMCR assortment strategy actually now needs to work in three
dimensions: roles, plans, and channels, as shown in figure 10.
Assortment Roles
Sporadic
Convenient
Regular
Exclusive
Channel
#
Store,
Catalog
Product 1
Product 2
Online,
Mobile
#
Product 3
Product 4
Product 5
#
Online,
Mobile
#
Online,
Mobile
Store,
Online,
Mobile,
Catalog
#
Assortment Plans
Competition
Match
Buzz
Creator
Sales Driver
Margin
Driver
Channel
After this is done, the assortment processes – procurement, distribution, marketing, and
customer order fulfillment, need to be realigned with the channel’s characteristic processes
and designated channel roles.
Pricing and profitability variables are now multi-linear computations since different channels
have different cost and service structures and yet the organization, must come up with a
consistent pricing across all channels. Allocations and transfers will need to be devised
depending upon the ‘affinity’ quotient of a ‘channel’ for selling a particular product.
The dynamics of an IMCR environment mandates that retailers need to move towards an
integrated continuous assortment planning approach. The integrated multi-channel
assortment plan must take in account the demands of all channels as an aggregate and
provide the correct allocation to each selling medium.
One of the main challenges in achieving this is the ability to accurately estimate demand in
each channel. Retailers find it difficult to keep up with the latest customer requirements,
irrespective of the channels they shop in. Retailers need to get an insight into which products
are the most and least successful, in the assortment mix that they have chosen for a
particular period. They need to develop an organization-wide quick response time for
changing trends and customer expectations, as mastered by Zara.
Source: TCS Internal
3. Organization Structure, KPIs
Figure 10: Assortment Roles with Channel Mix
To further refine the assortment plan, each channel will play a unique role in delivering the
strategy:
?
Channel role – Aggregate (all products), select (fast selling items), complement
(attachments and accessories), and differentiate (limited items)
An approach towards IMCR assortment strategy is highlighted in figure 11.
Assortment
Roles
Convenient
Sporadic
Regular
Product 1
#
Product 2
#
Product 3
#
Product 4
Product 5
Assortment
Plans
Exclusive
#
#
Sales
Driver
Buzz
Creator
Competition
Match
Margin
Driver
Channel
Channel Role
Store
Differentiate
Catalog
Complement
Online
Differentiate
Mobile
Differentiate
Online
Aggregate
Mobile
Select
Online
Aggregate
Mobile
Select
Store
Aggregate
Online
Aggregate
Mobile
Complement
Catalog
Complement
Channel
Channel Role
A multi-channel retailer can align the organizational structure in two ways:
?
A fully coordinated organization with a single P&L and joint decision-making that
optimizes total firm profits
?
A decentralized structure in which each channel has a separate P&L. Decisions for each
channel may be taken within the channel itself or there could be limited inter-channel
decision-making during the annual planning exercise
At the early stage of e-commerce development, some retailers intentionally gave a great
deal of independence to their online channel to attract executive talent and to encourage its
growth. For example, even though Walmart is known for its centralized organizational
structure, Walmart.com was established as a subsidiary with a fresh management team and
chose to locate its headquarters near Silicon Valley rather than at Bentonville, Arkansas.
Consistency across channels in terms of merchandising, service, and promotion — remains a
challenge for most retailers. In brick and mortar stores, the most well accepted performance
metrics are same-store sales, sales, and gross margin per square foot (GMROF). However,
these metrics do not apply to the online or mobile channels. A multi-channel retailer needs
to determine how to measure the impact of marketing actions in one channel on consumer
awareness, brand preference, sales, profit, and customer satisfaction in the retailer’s other
channels.
Most retailers manage their channels in a decentralized fashion (as shown in figure 12) and
maintain separate teams of inventory management, merchandising, marketing, finance,
analytics, and product development within each channel. Generally, the head of online
Source: TCS Internal
25
Figure 11: Assortment Roles with channel mix and specific channel roles
26
channels reported directly to the CEO of the company. Such retailers have seen tremendous
growth and profitable returns initially. However, if we look at a longer time horizon, the
decentralized structure has caused issues such as:
?
Inefficiency of business processes due to the creation of duplicate teams
?
Internal conflicts across channels
?
Inconsistent customer experiences due to lack of coordination in merchandising activities
across channels
CEO
CFO
COO
Marketing
Merchandising
Control
Human
Resources
Head-Online
Merchandising
Marketing
Product
Management
Systems
Fulfillment
Source: TCS Internal
Figure 12: Decentralized Organization Structure
If the online channel brings additional sales to stores, how should it be given the credit as
the additional sales do not reflect in their accounting books? How can retailers reward store
staff who do an excellent job cross-selling merchandise that are only available online? How
can they motivate store staff to provide flawless service to customers who come to stores to
pick their online orders or to return merchandise bought online? Retailers need to answer
these questions and design an effective compensation system to minimize conflicts and
encourage and reward collaboration across channels. Here are some recommendations:
1. Create a structure with single P&L: An IMCR needs to integrate the organization
structure so that channels do not operate in silos. This will provide an integrated
approach to decision-making in marketing, merchandising, inventory management and
visual merchandising.
This will also enable multi-channel retailers to create cross-channel synergies and
seamless customer experience. Other advantages of an integrated structure are that a
capability or asset from one channel is systematically available to the other channels,
and that the overall resources devoted by the enterprise to similar activities can be
appropriately adjusted. For example, if the online channel can drive store traffic, then
the mass media budget of the retailer could be reduced or redirected elsewhere.
27
2. Assign clear executive leadership: IMCR should assign senior management to oversee the
coordination of all channels and ensure that multi-channel initiatives remain a priority. At
US-based outdoor gear and apparel retailer, Recreational Equipment Inc. (REI), this position
is held by the CEO and at Circuit City, there is a dedicated position created for this role.
As a pre-requisite, executives heading the functions need not be just retailers but also
have a sound strategic vision and experience of e-commerce to know how to operate in
a multi-channel environment. For example, the CMO needs to be fluent in traditional
marketing areas - mass media (radio, TV, newspapers); direct marketing (marketing
databases, control groups, testing, ROI, modelling) and newer areas like e-commerce
(SEO, navigation, e-mail, opt in/opt out, privacy) and social media (Facebook, Twitter).
This will enable the Marketing function to develop a 360-degree view of the customer
and respond to their needs and channel preferences.
3. Provide incentives for cross: channel collaboration - Unlike in physical retail stores,
marketers in online retail have the ability to measure and track almost every customer
interaction. Retailers need to shift their focus to total product and category sales across
all channels. Category gross margin is the number that needs to grow and is a good
indicator of whether or not the channels are working effectively together to drive sales.
An integrated organization structure may create synergies of sharing overall resources;
however, only a few executives would relinquish control of critical resources like advertising
budgets in the belief that the alternative online or mobile marketing will drive store traffic
and sales.
Additionally, if we consider the research shopper phenomenon, one channel may function
mostly as an information source for customers, while another channel may serve as the
transaction channel. In that case, it is very difficult to determine which channel manager
should be rewarded for a sale.
REI’s efforts to build a multi-channel culture are best practices for other firms to adopt. The
retailer developed a focus on the customer, that cuts across channels — with a combination
of organizational restructuring, new incentives, training, and flexibility to enable the success
of the model, detailed in figure 13.
CEO
SVP, Marketing &
Merchandising
Merchandising
Private
Lable
Marketing
Online
Public affairs
SVP, Sales, Store
Development and Logistics
CFO
Finance
Store
IS
Logistics
Call center
Source: Forrester Research
Figure 13: Organization Structure at REI Outdoor apparel: for multi-channel success
Macy’s, on the other hand, introduced incentives for sales staff to fulfill needs regardless of
channel in its initiative called Magic Selling.
28
channels reported directly to the CEO of the company. Such retailers have seen tremendous
growth and profitable returns initially. However, if we look at a longer time horizon, the
decentralized structure has caused issues such as:
?
Inefficiency of business processes due to the creation of duplicate teams
?
Internal conflicts across channels
?
Inconsistent customer experiences due to lack of coordination in merchandising activities
across channels
CEO
CFO
COO
Marketing
Merchandising
Control
Human
Resources
Head-Online
Merchandising
Marketing
Product
Management
Systems
Fulfillment
Source: TCS Internal
Figure 12: Decentralized Organization Structure
If the online channel brings additional sales to stores, how should it be given the credit as
the additional sales do not reflect in their accounting books? How can retailers reward store
staff who do an excellent job cross-selling merchandise that are only available online? How
can they motivate store staff to provide flawless service to customers who come to stores to
pick their online orders or to return merchandise bought online? Retailers need to answer
these questions and design an effective compensation system to minimize conflicts and
encourage and reward collaboration across channels. Here are some recommendations:
1. Create a structure with single P&L: An IMCR needs to integrate the organization
structure so that channels do not operate in silos. This will provide an integrated
approach to decision-making in marketing, merchandising, inventory management and
visual merchandising.
This will also enable multi-channel retailers to create cross-channel synergies and
seamless customer experience. Other advantages of an integrated structure are that a
capability or asset from one channel is systematically available to the other channels,
and that the overall resources devoted by the enterprise to similar activities can be
appropriately adjusted. For example, if the online channel can drive store traffic, then
the mass media budget of the retailer could be reduced or redirected elsewhere.
27
2. Assign clear executive leadership: IMCR should assign senior management to oversee the
coordination of all channels and ensure that multi-channel initiatives remain a priority. At
US-based outdoor gear and apparel retailer, Recreational Equipment Inc. (REI), this position
is held by the CEO and at Circuit City, there is a dedicated position created for this role.
As a pre-requisite, executives heading the functions need not be just retailers but also
have a sound strategic vision and experience of e-commerce to know how to operate in
a multi-channel environment. For example, the CMO needs to be fluent in traditional
marketing areas - mass media (radio, TV, newspapers); direct marketing (marketing
databases, control groups, testing, ROI, modelling) and newer areas like e-commerce
(SEO, navigation, e-mail, opt in/opt out, privacy) and social media (Facebook, Twitter).
This will enable the Marketing function to develop a 360-degree view of the customer
and respond to their needs and channel preferences.
3. Provide incentives for cross: channel collaboration - Unlike in physical retail stores,
marketers in online retail have the ability to measure and track almost every customer
interaction. Retailers need to shift their focus to total product and category sales across
all channels. Category gross margin is the number that needs to grow and is a good
indicator of whether or not the channels are working effectively together to drive sales.
An integrated organization structure may create synergies of sharing overall resources;
however, only a few executives would relinquish control of critical resources like advertising
budgets in the belief that the alternative online or mobile marketing will drive store traffic
and sales.
Additionally, if we consider the research shopper phenomenon, one channel may function
mostly as an information source for customers, while another channel may serve as the
transaction channel. In that case, it is very difficult to determine which channel manager
should be rewarded for a sale.
REI’s efforts to build a multi-channel culture are best practices for other firms to adopt. The
retailer developed a focus on the customer, that cuts across channels — with a combination
of organizational restructuring, new incentives, training, and flexibility to enable the success
of the model, detailed in figure 13.
CEO
SVP, Marketing &
Merchandising
Merchandising
Private
Lable
Marketing
Online
Public affairs
SVP, Sales, Store
Development and Logistics
CFO
Finance
Store
IS
Logistics
Call center
Source: Forrester Research
Figure 13: Organization Structure at REI Outdoor apparel: for multi-channel success
Macy’s, on the other hand, introduced incentives for sales staff to fulfill needs regardless of
channel in its initiative called Magic Selling.
28
II Shaping Customer Experience
Discount products
across channels
(based on online
cost savings)
4. Pricing
Customers of each channel of an IMCR have different needs and the cost of serving these
channels vary. The question is whether pricing of merchandise should vary by channel or
not. It is a strong indicator of a retailer’s web strategy, if focused on aggressive e-commerce
sales growth or on delivering a consistent multi-channel customer experience.
To derive growth in an e-commerce channel, an IMCR would pass on the savings in
operational costs (such as rentals, staff expenses), while selling online to the customer in the
form of discounts. However, the stores would continue selling the same merchandise at fullprice. According to a CrossView multi-channel retailing study, 58% of top US multi-channel
retailers offered different prices across channels on the same item in 2010. On the contrary,
to deliver a seamless customer experience to a channel agnostic, retailers need to have
consistent pricing across channels. This is also relevant in countries like India where the
customer is not familiar with differential pricing based on retail format, as pricing is based
on Maximum Retail Price (MRP), where the manufacturer recommends the price at which
the retailer should sell the product. Retailers though sell slightly below MRP to attract more
customers to their stores.
Ensuring a consistent pricing across channels however is imperative for a multi-channel
retailer. Retailers like Tesco and Zara pursue consistent pricing across online and brick and
mortar stores. In case of a price differential across channels, an IMCR should match its online
and offline prices just as it matches prices with competitor stores. Best Buy is a good
example of an IMCR that offers price matches with leading online stores like Amazon. In case
price discrepancies exist between channels, some retailers effectively communicate this to
the store shopper, as in the case of Mountain Equipment Co-op (Canada), Sears (US) and
B&Q (UK).
If a price differential has to be introduced for additional services offered by the retailer,
customers need to be offered a transparent choice of channel and service options, and
differing prices that reflect cost to serve, e.g. Amazon offers the reliable comfort of its own
shop-front, or else a range of sellers on its marketplace with varying ratings and delivery
promises. Shoppers place different values on trust, speed, and certainty, and can choose and
pay accordingly.
While we advocate consistent pricing across channels, we need to understand that the cost
structure associated with each channel is different. The advantage gained by an IMCR from
the low operating cost of online channels must be balanced with the high operating costs of
physical retail, thus, offering the customer a consistent lower price across channels. This may
or may not be the lowest price offered across pure-play online retailers but will certainly
help retain customer trust.
29
Price-match
for price
discrepancies
Consistent Pricing across channels
Seamless
Customer
experience
Communicate
Channel-specific
promotions
Source: TCS Internal
Figure 14: Consistent Pricing for Seamless Customer Experience
In addition to pricing, assortment can be varied by an IMCR to create differentiation in
comparison to pure-play online retailers. The IMCR can sell exclusive products online or
focus more on large assortment categories that they may avoid in the store.
Manufacturers may also need to intervene to avoid excessive discounting of their products
by online retailers. This can be done by identifying the customer segments they want to
focus on, and then direct their trade discounts towards these channels. They can opt to use a
pay-for-performance mechanism to reward a retailer for the support they provide in
representing the brand and in acquiring new customers in the target group. This way the
performing retailer is in-sync with the manufacturer and earns higher margins. On the other
hand, retailers who do not support the brand and provide indiscriminate discounts will
suffer lower margins, forcing them to cut down on the discounts to the end customer.
Further, pricing of merchandise across channels may eventually evolve into dynamic pricing
similar to that adopted by airline companies. The retailers may enable the automatic rollout
of price based on the time of the day and even personalize pricing for customers, similar to
personalized promotions prevalent today.
The leading IMCR adopt the following best practices to ensure consistent pricing across
channels:
?
Changes in organization structure - One category manager for both online and store
businesses is recommended. This means having a single P&L for the entire organization
and not treating online business as a separate entity
?
Using Master Data Management (MDM) for better price management across items
?
Using pricing intelligence software that monitors prices across channels and
competitors to enable better pricing
There could be a few challenges while ensuring pricing consistency in multichannel retail.
For example, pricing differentiation may sometimes be required for seasonal products
offered to customers in different regions. Alternatively, different prices are offered at
differing times of the day to drive footfalls. This may cause confusion for the consumer and
potentially damage brand reputation.
30
II Shaping Customer Experience
Discount products
across channels
(based on online
cost savings)
4. Pricing
Customers of each channel of an IMCR have different needs and the cost of serving these
channels vary. The question is whether pricing of merchandise should vary by channel or
not. It is a strong indicator of a retailer’s web strategy, if focused on aggressive e-commerce
sales growth or on delivering a consistent multi-channel customer experience.
To derive growth in an e-commerce channel, an IMCR would pass on the savings in
operational costs (such as rentals, staff expenses), while selling online to the customer in the
form of discounts. However, the stores would continue selling the same merchandise at fullprice. According to a CrossView multi-channel retailing study, 58% of top US multi-channel
retailers offered different prices across channels on the same item in 2010. On the contrary,
to deliver a seamless customer experience to a channel agnostic, retailers need to have
consistent pricing across channels. This is also relevant in countries like India where the
customer is not familiar with differential pricing based on retail format, as pricing is based
on Maximum Retail Price (MRP), where the manufacturer recommends the price at which
the retailer should sell the product. Retailers though sell slightly below MRP to attract more
customers to their stores.
Ensuring a consistent pricing across channels however is imperative for a multi-channel
retailer. Retailers like Tesco and Zara pursue consistent pricing across online and brick and
mortar stores. In case of a price differential across channels, an IMCR should match its online
and offline prices just as it matches prices with competitor stores. Best Buy is a good
example of an IMCR that offers price matches with leading online stores like Amazon. In case
price discrepancies exist between channels, some retailers effectively communicate this to
the store shopper, as in the case of Mountain Equipment Co-op (Canada), Sears (US) and
B&Q (UK).
If a price differential has to be introduced for additional services offered by the retailer,
customers need to be offered a transparent choice of channel and service options, and
differing prices that reflect cost to serve, e.g. Amazon offers the reliable comfort of its own
shop-front, or else a range of sellers on its marketplace with varying ratings and delivery
promises. Shoppers place different values on trust, speed, and certainty, and can choose and
pay accordingly.
While we advocate consistent pricing across channels, we need to understand that the cost
structure associated with each channel is different. The advantage gained by an IMCR from
the low operating cost of online channels must be balanced with the high operating costs of
physical retail, thus, offering the customer a consistent lower price across channels. This may
or may not be the lowest price offered across pure-play online retailers but will certainly
help retain customer trust.
29
Price-match
for price
discrepancies
Consistent Pricing across channels
Seamless
Customer
experience
Communicate
Channel-specific
promotions
Source: TCS Internal
Figure 14: Consistent Pricing for Seamless Customer Experience
In addition to pricing, assortment can be varied by an IMCR to create differentiation in
comparison to pure-play online retailers. The IMCR can sell exclusive products online or
focus more on large assortment categories that they may avoid in the store.
Manufacturers may also need to intervene to avoid excessive discounting of their products
by online retailers. This can be done by identifying the customer segments they want to
focus on, and then direct their trade discounts towards these channels. They can opt to use a
pay-for-performance mechanism to reward a retailer for the support they provide in
representing the brand and in acquiring new customers in the target group. This way the
performing retailer is in-sync with the manufacturer and earns higher margins. On the other
hand, retailers who do not support the brand and provide indiscriminate discounts will
suffer lower margins, forcing them to cut down on the discounts to the end customer.
Further, pricing of merchandise across channels may eventually evolve into dynamic pricing
similar to that adopted by airline companies. The retailers may enable the automatic rollout
of price based on the time of the day and even personalize pricing for customers, similar to
personalized promotions prevalent today.
The leading IMCR adopt the following best practices to ensure consistent pricing across
channels:
?
Changes in organization structure - One category manager for both online and store
businesses is recommended. This means having a single P&L for the entire organization
and not treating online business as a separate entity
?
Using Master Data Management (MDM) for better price management across items
?
Using pricing intelligence software that monitors prices across channels and
competitors to enable better pricing
There could be a few challenges while ensuring pricing consistency in multichannel retail.
For example, pricing differentiation may sometimes be required for seasonal products
offered to customers in different regions. Alternatively, different prices are offered at
differing times of the day to drive footfalls. This may cause confusion for the consumer and
potentially damage brand reputation.
30
In addition to pricing, promotions need to be consistent across all channels, regions and
countries. Problems can arise when multi-channel retailers are running online-only or storeonly promotions. This needs to be communicated properly to the customer. For example,
Sears does not do in-store price-match items under online-only promotions.
Best Buy is a popular example of multi-channel pricing. It does a price match for all local
retail competitors and 19 major online competitors in all product categories, whenever a
customer requests for it. There are exclusions like promotions run by competitors,
BestBuy.com Clearance and Marketplace items. Additionally, the price match is limited to
one price match per identical item. This is also an important move in combating
‘showrooming’ (where customers experience the product in-store and buy it online at a
discounted price).
Alternatively, Walmart doesn’t lose much due to showrooming because it sells products in a
lot of other categories to customers who come in to browse electronics. Here, we may need
to remember that price is just one aspect of a compelling multi-channel experience, and
some retailers will be more comfortable in finding a profitable balance than others.
channel, like the internet. Many cross-channel shoppers are tech savvy and prefer to control
their experience, so retailers like PETCO, American Eagle Outfitters, and Famous Footwear
ensure that online and offline order and account information as well as applicable coupons
are easily accessible online.
Percentage of service requests handled
Others,
16%
Telephone,
36%
Live Chat/Web,
12%
5. Customer Services and Marketing
In brick and mortar retail, customer service is largely people-oriented and performed at
touch-points in stores such as interaction with sales staff, the customer service desk, and in a
limited manner, on the telephone. As the customer service function is localized to the store,
it is easier to control the quality of service.
Online channels today offer customers the convenience of tapping into the buying cycle at
any stage and have given rise to additional touch-points such as email, live chat, and social
media, with customer service now having both human and technology aspects. It is crucial
when prices and products are very similar between competitors and customer experience is
one way to differentiate a retailer from its rivals. Brands like Zappos have built up a
reputation of excellent customer service.
Advertising using search engines and social media plays a key role during the early stages of
the buying cycle when a customer has certain keywords or products in mind. Multi-channel
retailers need to align their promotions and loyalty programs to provide a seamless
customer experience across channels.
CSD @ store,
15%
Email, 21%
Source: Aberdeen Group Research
Figure 15: Mode of Customer Service Requests
Specific customer service channels are often managed by separate teams - one team may
deal with telephone queries, another with emails, or social media, or live chat. This kind of
A multi-channel retailer has the following major touch points where customers can
communicate with customer service staff.
?
Telephone
?
Email
?
Customer service desk at store
?
Live chat or web
?
Others like social media
According to research conducted by the Aberdeen Group (figure 15), the telephone channel
has the most incoming service requests at 36%. At each of these touch points; retailers have
the opportunity to create a positive impression. Self-service is also an important service
31
32
In addition to pricing, promotions need to be consistent across all channels, regions and
countries. Problems can arise when multi-channel retailers are running online-only or storeonly promotions. This needs to be communicated properly to the customer. For example,
Sears does not do in-store price-match items under online-only promotions.
Best Buy is a popular example of multi-channel pricing. It does a price match for all local
retail competitors and 19 major online competitors in all product categories, whenever a
customer requests for it. There are exclusions like promotions run by competitors,
BestBuy.com Clearance and Marketplace items. Additionally, the price match is limited to
one price match per identical item. This is also an important move in combating
‘showrooming’ (where customers experience the product in-store and buy it online at a
discounted price).
Alternatively, Walmart doesn’t lose much due to showrooming because it sells products in a
lot of other categories to customers who come in to browse electronics. Here, we may need
to remember that price is just one aspect of a compelling multi-channel experience, and
some retailers will be more comfortable in finding a profitable balance than others.
channel, like the internet. Many cross-channel shoppers are tech savvy and prefer to control
their experience, so retailers like PETCO, American Eagle Outfitters, and Famous Footwear
ensure that online and offline order and account information as well as applicable coupons
are easily accessible online.
Percentage of service requests handled
Others,
16%
Telephone,
36%
Live Chat/Web,
12%
5. Customer Services and Marketing
In brick and mortar retail, customer service is largely people-oriented and performed at
touch-points in stores such as interaction with sales staff, the customer service desk, and in a
limited manner, on the telephone. As the customer service function is localized to the store,
it is easier to control the quality of service.
Online channels today offer customers the convenience of tapping into the buying cycle at
any stage and have given rise to additional touch-points such as email, live chat, and social
media, with customer service now having both human and technology aspects. It is crucial
when prices and products are very similar between competitors and customer experience is
one way to differentiate a retailer from its rivals. Brands like Zappos have built up a
reputation of excellent customer service.
Advertising using search engines and social media plays a key role during the early stages of
the buying cycle when a customer has certain keywords or products in mind. Multi-channel
retailers need to align their promotions and loyalty programs to provide a seamless
customer experience across channels.
CSD @ store,
15%
Email, 21%
Source: Aberdeen Group Research
Figure 15: Mode of Customer Service Requests
Specific customer service channels are often managed by separate teams - one team may
deal with telephone queries, another with emails, or social media, or live chat. This kind of
A multi-channel retailer has the following major touch points where customers can
communicate with customer service staff.
?
Telephone
?
Email
?
Customer service desk at store
?
Live chat or web
?
Others like social media
According to research conducted by the Aberdeen Group (figure 15), the telephone channel
has the most incoming service requests at 36%. At each of these touch points; retailers have
the opportunity to create a positive impression. Self-service is also an important service
31
32
The benefit of integrating customer service functions for retailers is that they would be able
to provide services to individual customers far more efficiently, as well as generate insights
to improve the targeting of marketing communications. The customer can be provided with
a higher level of service, and this can lead to an increase in customer satisfaction and greater
loyalty.
IMCR also has a relevant case for cross-channel promotions. An inter-channel cross-selling
promotion might entail a coupon offered to internet users for purchasing an item in a retail
store. The objective of such a promotion could be to increase store traffic. Alternatively, a
store may offer a customer at the checkout counter a coupon that can be used for online
purchases.
Marks & Spencer estimates that: Spending of multi-channel (in-store, online, and mobile)
customer = 8 x spending of store-only customer
Here are some best practices to improve customer service:
?
Service options - Retailers should offer click-to-chat or click-to-call options and
experiment with in-store kiosks that link to live customer service representatives.
?
Consistent communication - Retailers should avoid frustrating consumers with their
inability to service them because information is unavailable or by making them repeat
information
?
Differential services - In the future, retailers will need to optimize the interactions across
channels for a combination of cost and satisfaction, thereby providing valuable
customers with different service options than other customers
Best Buy and Macy’s offer live chat and click-to-call options, and their customer service
representatives have visibility into both customer and order data.
The major challenges customers face while resolving a service request are:
?
Being forced to repeat themselves as customer service staff lack information regarding
the customer’s history and value
?
Long waiting times and being trapped in automated self-service lines
?
Not being able to switch between communication channels easily
From an IMCR standpoint, retailers should look out for policies that discourage employees
from not delivering good multi-channel service. For example, if stores make it difficult for
customers to return online products at the store, they risk losing future online sales because
of a frustrating returns process.
33
6. Customer Order Fulfillment
The ultimate aim of the multi-channel business is to deliver goods or services anywhere,
anytime and provide a great customer experience. Most retailers today have relatively
strong independent channel fulfillment processes; be it the availability of merchandise in
store or the capability to deliver within 24 hours. The RSR Omni Channel 2013 Benchmarking
Report has indicated that 64% of multi-channel retailers have little or no synchronization in
fulfillment. The single view of inventory and customer are fundamental enablers and
integration across channels for fulfillment is the key to customer satisfaction. More than 75%
companies consider seamless integrated multi-channel experience as a top business
challenge for their fulfillment strategy.
Retailers looking at multi-channel as a true enabler of their business must also look at
creating uniform experience of fulfillment across channels. Some of the key aspects of
fulfillment that need to be addressed are:
?
Enabling customers to purchase on any sales channel – store, e-commerce, mcommerce, kiosks and social commerce.
?
Allowing customers to take delivery through any mechanism possible like self-pickup,
express, or regular delivery.
?
Allowing customers to return products through a channel of their choice like dropping it
off at the store or predefined location, getting it picked up from home, or the customers’
location of choice.
These functionalities are the primary drivers for customer satisfaction.
The obvious key enablers for achieving excellence in fulfillment are having a unified sales
platform, single view of the inventory, robust order management, ability to allocate inventory to
demand in real-time, and cohesive view of the customer across channels. The growing
customer expectations mean that improvements are necessary in speed and quality of delivery.
Globally, several companies are setting up new benchmarks in fulfilment every day. Store
pick-up and home delivery options are provided across channels by the likes of Home Depot
and Callaway. Companies like Best Buy and Circuit City provide for a dedicated pickup area
in stores for online orders. In India, Flipkart, Jabong, and several others have setup their own
fleet for deliveries in metro cities. Jabong (through JaVAS) has diversified and is now
providing a fulfilment service to other e-commerce companies in India. The fledging ecommerce business has customers largely across metros and companies are using third
party vendors for last mile delivery services to further improve their delivery footprint. In our
view, companies may look at a three step approach to improve their fulfillment capabilities:
?
Leverage: Utilize existing infrastructure or develop only a basic set up while establishing
multi-channel business. This includes both a logistics network as well as technology solutions.
?
Optimize: Improve current state of fulfillment operations across processes, infrastructure,
and technology. This should enable the company to reduce overheads and improve
utilization levels.
?
Integrate: Once operations are optimized across all distinct fulfillment channels,
companies can enable integration across channels. It should include processes around
sales, delivery and returns, and be achieved through suitable technology interventions.
34
The benefit of integrating customer service functions for retailers is that they would be able
to provide services to individual customers far more efficiently, as well as generate insights
to improve the targeting of marketing communications. The customer can be provided with
a higher level of service, and this can lead to an increase in customer satisfaction and greater
loyalty.
IMCR also has a relevant case for cross-channel promotions. An inter-channel cross-selling
promotion might entail a coupon offered to internet users for purchasing an item in a retail
store. The objective of such a promotion could be to increase store traffic. Alternatively, a
store may offer a customer at the checkout counter a coupon that can be used for online
purchases.
Marks & Spencer estimates that: Spending of multi-channel (in-store, online, and mobile)
customer = 8 x spending of store-only customer
Here are some best practices to improve customer service:
?
Service options - Retailers should offer click-to-chat or click-to-call options and
experiment with in-store kiosks that link to live customer service representatives.
?
Consistent communication - Retailers should avoid frustrating consumers with their
inability to service them because information is unavailable or by making them repeat
information
?
Differential services - In the future, retailers will need to optimize the interactions across
channels for a combination of cost and satisfaction, thereby providing valuable
customers with different service options than other customers
Best Buy and Macy’s offer live chat and click-to-call options, and their customer service
representatives have visibility into both customer and order data.
The major challenges customers face while resolving a service request are:
?
Being forced to repeat themselves as customer service staff lack information regarding
the customer’s history and value
?
Long waiting times and being trapped in automated self-service lines
?
Not being able to switch between communication channels easily
From an IMCR standpoint, retailers should look out for policies that discourage employees
from not delivering good multi-channel service. For example, if stores make it difficult for
customers to return online products at the store, they risk losing future online sales because
of a frustrating returns process.
33
6. Customer Order Fulfillment
The ultimate aim of the multi-channel business is to deliver goods or services anywhere,
anytime and provide a great customer experience. Most retailers today have relatively
strong independent channel fulfillment processes; be it the availability of merchandise in
store or the capability to deliver within 24 hours. The RSR Omni Channel 2013 Benchmarking
Report has indicated that 64% of multi-channel retailers have little or no synchronization in
fulfillment. The single view of inventory and customer are fundamental enablers and
integration across channels for fulfillment is the key to customer satisfaction. More than 75%
companies consider seamless integrated multi-channel experience as a top business
challenge for their fulfillment strategy.
Retailers looking at multi-channel as a true enabler of their business must also look at
creating uniform experience of fulfillment across channels. Some of the key aspects of
fulfillment that need to be addressed are:
?
Enabling customers to purchase on any sales channel – store, e-commerce, mcommerce, kiosks and social commerce.
?
Allowing customers to take delivery through any mechanism possible like self-pickup,
express, or regular delivery.
?
Allowing customers to return products through a channel of their choice like dropping it
off at the store or predefined location, getting it picked up from home, or the customers’
location of choice.
These functionalities are the primary drivers for customer satisfaction.
The obvious key enablers for achieving excellence in fulfillment are having a unified sales
platform, single view of the inventory, robust order management, ability to allocate inventory to
demand in real-time, and cohesive view of the customer across channels. The growing
customer expectations mean that improvements are necessary in speed and quality of delivery.
Globally, several companies are setting up new benchmarks in fulfilment every day. Store
pick-up and home delivery options are provided across channels by the likes of Home Depot
and Callaway. Companies like Best Buy and Circuit City provide for a dedicated pickup area
in stores for online orders. In India, Flipkart, Jabong, and several others have setup their own
fleet for deliveries in metro cities. Jabong (through JaVAS) has diversified and is now
providing a fulfilment service to other e-commerce companies in India. The fledging ecommerce business has customers largely across metros and companies are using third
party vendors for last mile delivery services to further improve their delivery footprint. In our
view, companies may look at a three step approach to improve their fulfillment capabilities:
?
Leverage: Utilize existing infrastructure or develop only a basic set up while establishing
multi-channel business. This includes both a logistics network as well as technology solutions.
?
Optimize: Improve current state of fulfillment operations across processes, infrastructure,
and technology. This should enable the company to reduce overheads and improve
utilization levels.
?
Integrate: Once operations are optimized across all distinct fulfillment channels,
companies can enable integration across channels. It should include processes around
sales, delivery and returns, and be achieved through suitable technology interventions.
34
While companies proceed through their respective charters, it is important that they
maintain the brand salience.
III Deploying Processes and Systems
After the organization strategy for IMCR operations is finalized and the role of individual
channels is delineated, we should look at how to achieve the goals and execute the strategy.
Reviewing the processes and systems are the key drivers of a successful IMCR business.
One Product
Traditionally, retailers have been using a basic master data management (MDM) system
(generally a part of core ERP system) to capture only the essential elements of product
information. Physical attributes or technical specifications are not included as the customer
can see all information while buying the product in a physical store. As we move to channels
which disconnect the customer from the physical product, it becomes essential to
communicate all information that would generally be available to the customer when
viewing the product in-hand.
Companies started using the e-commerce platform’s MDM to capture additional information,
when they adopted internet as a retail channel. This meant that organizations now have two
or more systems where basic item information is being captured and these had little or no
synchronization between them. However, in an integrated multi-channel environment, it
becomes essential to have a single view of the product across channels (figure 16).
Internally
Integrated
Backward
Integrated
Disparate Product
Information
People
Large data
management team
Large content
management team
Large technology
support team
Mid-sized data
management team
Large content
management team
Mid-sized technology
support team
Small datamanagement team
Mid-sized content
management team
Mid-sized technology
support team
Process
Strong manual
processes around
content creation
and validation
Efficient systemic
controls
Strong vendor
collaboration
processes
Technology
Disparate MDM
systems
Robust MDM solution
with integrations
across all channels
Strong integration
with external
systems and data
control
Retailers need to use robust MDM solutions like Initiate or InfoSphere or develop a barebones MDM solution in-house, to achieve a unified view of the product across channels. The
basic data about the products are best adopted from the vendors. Retailers must therefore
look at extending the MDM solution to vendors or develop interfaces with the vendor’s
Product Lifecycle Management (PLM) tool or MDM systems.
Implementing a simple bespoke system can be a quick fix, as other options may take longer
to implement and have higher cost implications. Our view is that retailers should analyze
and identify what solution works best for them from medium to long term. According to
Aberdeen Group research, 50% of the best-in-class multi-channel companies are sharing
product information across channels.
Integrated Supply Chain
A decade ago, achieving collaborations with vendors at a strategic level was a rare
occurrence. Implementing the Collaborative Planning Forecasting Replenishment (CPFR)
model in the true sense may still be a challenge for most organizations, but there is a need
to collaborate at an operational level. Some of the supply chain aspects critical for a strong
multi-channel business are highlighted below:
1. Vendor information: It’s no longer about having the vendor’s data in place. It’s about
gaining access to information about vendors such as their production capabilities, lead
time on upcoming orders, and insights into their available production slots. A company
keen on multi-channel business should also focus on integrating with their vendors like
never before.
Companies must have real-time access to vendor information so that they can accurately
predict and promise delivery to customers across channels and locations. It also enables
them to plan their logistics efficiently. According to Aberdeen Group research, 54% of
the leaders and 34% of followers in multi-channel business are working on initiatives
that support such collaboration.
2. One inventory: Imagine if you have an inventory earmarked for stores but are not able to
fulfill online orders. A choice between an unhappy online customer, a lost order, or
incurring additional cost to fulfill an order are all undesirable solutions in today’s high
demand and customer-centric businesses. One of the main themes we speak of in the
multi-channel retail business is having a single and real-time view of inventory across
the organization. Ideally, it is best to have a single source of information for on-hand or
on-order inventory; however we know that companies operate in various ways. The
traditional retailers segregate and allocate inventory for various channels, when they
adopt multi-channel operations. This may be beneficial to ensure stock availability at
stores or at e-commerce order fulfillment centers. Multi-channel business though is
unpredictable and companies would still benefit by having an aggregated view of
inventory to respond to fluctuating demands across channels while at the same time
optimally utilizing their investment in goods. According to the RSR Research conducted
in June 2012, 61% of the multi-channel retailers consider cross-channel inventory
visibility to be a critical process while 37% have already completed synchronization or
are in the process of doing so.
Source: TCS Internal
35
Figure 16: Single View of Product
36
While companies proceed through their respective charters, it is important that they
maintain the brand salience.
III Deploying Processes and Systems
After the organization strategy for IMCR operations is finalized and the role of individual
channels is delineated, we should look at how to achieve the goals and execute the strategy.
Reviewing the processes and systems are the key drivers of a successful IMCR business.
One Product
Traditionally, retailers have been using a basic master data management (MDM) system
(generally a part of core ERP system) to capture only the essential elements of product
information. Physical attributes or technical specifications are not included as the customer
can see all information while buying the product in a physical store. As we move to channels
which disconnect the customer from the physical product, it becomes essential to
communicate all information that would generally be available to the customer when
viewing the product in-hand.
Companies started using the e-commerce platform’s MDM to capture additional information,
when they adopted internet as a retail channel. This meant that organizations now have two
or more systems where basic item information is being captured and these had little or no
synchronization between them. However, in an integrated multi-channel environment, it
becomes essential to have a single view of the product across channels (figure 16).
Internally
Integrated
Backward
Integrated
Disparate Product
Information
People
Large data
management team
Large content
management team
Large technology
support team
Mid-sized data
management team
Large content
management team
Mid-sized technology
support team
Small datamanagement team
Mid-sized content
management team
Mid-sized technology
support team
Process
Strong manual
processes around
content creation
and validation
Efficient systemic
controls
Strong vendor
collaboration
processes
Technology
Disparate MDM
systems
Robust MDM solution
with integrations
across all channels
Strong integration
with external
systems and data
control
Retailers need to use robust MDM solutions like Initiate or InfoSphere or develop a barebones MDM solution in-house, to achieve a unified view of the product across channels. The
basic data about the products are best adopted from the vendors. Retailers must therefore
look at extending the MDM solution to vendors or develop interfaces with the vendor’s
Product Lifecycle Management (PLM) tool or MDM systems.
Implementing a simple bespoke system can be a quick fix, as other options may take longer
to implement and have higher cost implications. Our view is that retailers should analyze
and identify what solution works best for them from medium to long term. According to
Aberdeen Group research, 50% of the best-in-class multi-channel companies are sharing
product information across channels.
Integrated Supply Chain
A decade ago, achieving collaborations with vendors at a strategic level was a rare
occurrence. Implementing the Collaborative Planning Forecasting Replenishment (CPFR)
model in the true sense may still be a challenge for most organizations, but there is a need
to collaborate at an operational level. Some of the supply chain aspects critical for a strong
multi-channel business are highlighted below:
1. Vendor information: It’s no longer about having the vendor’s data in place. It’s about
gaining access to information about vendors such as their production capabilities, lead
time on upcoming orders, and insights into their available production slots. A company
keen on multi-channel business should also focus on integrating with their vendors like
never before.
Companies must have real-time access to vendor information so that they can accurately
predict and promise delivery to customers across channels and locations. It also enables
them to plan their logistics efficiently. According to Aberdeen Group research, 54% of
the leaders and 34% of followers in multi-channel business are working on initiatives
that support such collaboration.
2. One inventory: Imagine if you have an inventory earmarked for stores but are not able to
fulfill online orders. A choice between an unhappy online customer, a lost order, or
incurring additional cost to fulfill an order are all undesirable solutions in today’s high
demand and customer-centric businesses. One of the main themes we speak of in the
multi-channel retail business is having a single and real-time view of inventory across
the organization. Ideally, it is best to have a single source of information for on-hand or
on-order inventory; however we know that companies operate in various ways. The
traditional retailers segregate and allocate inventory for various channels, when they
adopt multi-channel operations. This may be beneficial to ensure stock availability at
stores or at e-commerce order fulfillment centers. Multi-channel business though is
unpredictable and companies would still benefit by having an aggregated view of
inventory to respond to fluctuating demands across channels while at the same time
optimally utilizing their investment in goods. According to the RSR Research conducted
in June 2012, 61% of the multi-channel retailers consider cross-channel inventory
visibility to be a critical process while 37% have already completed synchronization or
are in the process of doing so.
Source: TCS Internal
35
Figure 16: Single View of Product
36
3. Order management: Prioritizing orders and ensuring smart execution of available-topromise (ATP) algorithms demand that we look at orders as a mission critical process.
Creating a single control area for orders, both internal store requests and direct
customer deliveries, gives organizations phenomenal flexibility. The ability to alter flow
of inventory in real-time is critical to ensure that companies do not invest in high levels
of safety stock. At the same time, it optimizes the use of logistics services. According to
Aberdeen Group research, 44% of leading multi-channel organizations have distributed
order management systems. RSR Research of leading multi-channel retailers has
identified that 58% allow inventory allocated for one channel to be used for another
channel’s fulfillment.
As shown in figure 17, as a first step, the multi-channel retailers can look at investing in
appropriate technology and processes that can integrate information derived out of various
customer touch points such as store, web, mobile, customer care, and social media. Once
the integrated information is available, companies can look at delivering uniform
experience, coordinated marketing campaigns, and various other aspects as may be derived
from this massive all inclusive dataset.
Integrating the various aspects of supply chain is one of the top requirements of companies
going multi-channel. This can be more challenging than other focus areas such as loyalty,
social media, and customer experience. This is because of the large number of systems and
processes that would need to be altered. Macys, for example, has been working on an
inventory visibility project for some time now and by the end of 2013, 500 of their 840 stores
will have the ability to pick online orders.
Terry Lundgren, CEO, Macys recently quoted an example from his stores with evident
satisfaction. Macy's had 1,600 place settings of Feista dishes remaining in many stores in
ones and twos, but they commonly sell in sets of eight or 12. The goods were effectively
unsellable where they were located, but the online inventory and store-level picking
permitted online sales to continue until they were sold through at full mark-up. This ensured
that all sales were all profitable.
Investment in appropriate technology solutions is the only way to achieve an integrated
supply chain. Aberdeen Group research pegs 98% on-time order delivery for leading multichannel players leveraging such systems.
One customer
The prime focus of companies remains better understanding of the new, empowered, and
omni-present customer. The Aberdeen Group’s research on omni-channel customer
experience highlights that four out of top five issues faced by multi-channel companies
today are directly related to customers.
Superior customer services, uniform experience across channels, cross-channel loyalty are
some of the expectations of the evolving customer. In our view, the fundamental aspect that
all multi-channel companies should work on is to improve customer satisfaction, by
developing a single personalized view of the customer. RSR research too highlights the lack
of single view of the customer as the largest organizational inhibitor with a whopping 55%
of the respondents agreeing to it.
Integrated
Channels
Crosschannel
Analytics
Disparate
Channels
Process
Disparate
marketing and
customer analytics
processes
Efficient customer
analytics
processes across
channels
Strong data-mining,
pattern recognition
processes
Technology
Disparate CRM
systems
CRM solution with
integrations across
all channels
Robust Advanced
Analytics and
Social Media Tools
Source: TCS Internal
Figure 17: One View of the Customer
Technology backbone
A majority of multi-channel initiatives are those that can be envisaged and implemented from
a solutions perspective. A robust yet nimble technology backbone is the need of the hour.
Most multi-channel retailers today are either facing inertia or are making inadequate efforts
to enhance their current back end systems to adapt to the multi-channel environment.
While in certain instances it may be appropriate to enhance low priority systems, it can be
counterproductive to do so for key areas like inventory and order management, Customer
Relationship Management (CRM) or advanced analytics.
Digital platforms allow customer information to be captured at every step and can uniquely
identify a customer. This is not the case in the traditional retail business. Loyalty programs do
provide some insights from the physical retail world, but it lacks details about customer
behavior at the store. There are differences across channels and retailers have been managing
disparate systems to capture customer information. This leads to a complicated web of
dissimilar experiences, misleading marketing campaigns, and complicated loyalty programs.
37
38
3. Order management: Prioritizing orders and ensuring smart execution of available-topromise (ATP) algorithms demand that we look at orders as a mission critical process.
Creating a single control area for orders, both internal store requests and direct
customer deliveries, gives organizations phenomenal flexibility. The ability to alter flow
of inventory in real-time is critical to ensure that companies do not invest in high levels
of safety stock. At the same time, it optimizes the use of logistics services. According to
Aberdeen Group research, 44% of leading multi-channel organizations have distributed
order management systems. RSR Research of leading multi-channel retailers has
identified that 58% allow inventory allocated for one channel to be used for another
channel’s fulfillment.
As shown in figure 17, as a first step, the multi-channel retailers can look at investing in
appropriate technology and processes that can integrate information derived out of various
customer touch points such as store, web, mobile, customer care, and social media. Once
the integrated information is available, companies can look at delivering uniform
experience, coordinated marketing campaigns, and various other aspects as may be derived
from this massive all inclusive dataset.
Integrating the various aspects of supply chain is one of the top requirements of companies
going multi-channel. This can be more challenging than other focus areas such as loyalty,
social media, and customer experience. This is because of the large number of systems and
processes that would need to be altered. Macys, for example, has been working on an
inventory visibility project for some time now and by the end of 2013, 500 of their 840 stores
will have the ability to pick online orders.
Terry Lundgren, CEO, Macys recently quoted an example from his stores with evident
satisfaction. Macy's had 1,600 place settings of Feista dishes remaining in many stores in
ones and twos, but they commonly sell in sets of eight or 12. The goods were effectively
unsellable where they were located, but the online inventory and store-level picking
permitted online sales to continue until they were sold through at full mark-up. This ensured
that all sales were all profitable.
Investment in appropriate technology solutions is the only way to achieve an integrated
supply chain. Aberdeen Group research pegs 98% on-time order delivery for leading multichannel players leveraging such systems.
One customer
The prime focus of companies remains better understanding of the new, empowered, and
omni-present customer. The Aberdeen Group’s research on omni-channel customer
experience highlights that four out of top five issues faced by multi-channel companies
today are directly related to customers.
Superior customer services, uniform experience across channels, cross-channel loyalty are
some of the expectations of the evolving customer. In our view, the fundamental aspect that
all multi-channel companies should work on is to improve customer satisfaction, by
developing a single personalized view of the customer. RSR research too highlights the lack
of single view of the customer as the largest organizational inhibitor with a whopping 55%
of the respondents agreeing to it.
Integrated
Channels
Crosschannel
Analytics
Disparate
Channels
Process
Disparate
marketing and
customer analytics
processes
Efficient customer
analytics
processes across
channels
Strong data-mining,
pattern recognition
processes
Technology
Disparate CRM
systems
CRM solution with
integrations across
all channels
Robust Advanced
Analytics and
Social Media Tools
Source: TCS Internal
Figure 17: One View of the Customer
Technology backbone
A majority of multi-channel initiatives are those that can be envisaged and implemented from
a solutions perspective. A robust yet nimble technology backbone is the need of the hour.
Most multi-channel retailers today are either facing inertia or are making inadequate efforts
to enhance their current back end systems to adapt to the multi-channel environment.
While in certain instances it may be appropriate to enhance low priority systems, it can be
counterproductive to do so for key areas like inventory and order management, Customer
Relationship Management (CRM) or advanced analytics.
Digital platforms allow customer information to be captured at every step and can uniquely
identify a customer. This is not the case in the traditional retail business. Loyalty programs do
provide some insights from the physical retail world, but it lacks details about customer
behavior at the store. There are differences across channels and retailers have been managing
disparate systems to capture customer information. This leads to a complicated web of
dissimilar experiences, misleading marketing campaigns, and complicated loyalty programs.
37
38
Achieve
How
Real-time
inventory
visibility
1.
Core system which holds real-time information on inventory
across all locations or sites
2.
Integration between core system and vendor's inventory or
order fulfillment system to accurately predict lead time
1.
An enterprise CRM system that will:
a. gather transaction information from all channels
b. capture interests, behavior, and actions on digital channels
c. manage loyalty
d. take inputs from advanced customer analytics
e. feed marketing engine for personalized campaign
One view of
the customer
management
f. feed sales channel with data from other channels and assist
personalized pricing
2.
Order
management
Advanced
POS
Contact
center system
Advanced
analytics
Significance
Critical
Illustration of a Marquee Specialty Retailer’s ‘Buy Anywhere, Fulfill Anywhere’
Journey, from TCS experience
Business strategy
The retailer wanted to improve its sales by adopting and enhancing different channels. The
focus was to achieve the following:
Critical
?
Enhance the existing in-store pick up process
?
Implement the ship from store process
?
Implement the site to store process
A team comprising of executives from customer, third party vendors, and TCS was formed.
Business problems
Curb the urge to enhance existing non-enterprise class CRM for
multi-channel retail. However, if enterprise class CRM is
available, look at re-implementation or modification by doing
thorough analysis
?
Reduction in customer base due to increased shipping costs
?
Reduction in sales with other retailers offering newer shopping options
1.
Advanced system which will enable optimized order fulfillment
?
Increase in stagnant inventory in stores
2.
System must interface with core inventory and CRM system for
inputs and provide feeds to logistics, sales channels, and
customer profile
?
Increased cancellation of orders due to non-availability of items in stores and
distribution centers (DCs) at the same time leading to loss due to non-movement of
items from other stores
1.
Advanced POS system would provide ability to pull out
analytics insights in near real-time to assist in cross-selling, upselling, or closing transactions. POS systems must integrate with
CRM and analytics
1.
Contact center systems must be upgraded to assist associates
with real-time inputs and feed from analytics and CRM about
specific customers
2.
Distinguishing between key and regular customers and
providing personalized service rather than a cookie cutter
response is vital
1.
Like with CRM, look at implementation or modification of
enterprise class analytics system
2.
Develop capabilities around customer analytics across channels
and product portfolio to drive personalized or optimized
marketing campaigns
3.
Critical
Solution implementation
Important
Important
?
Studied existing sales channels and refined the processes
?
Came up with new sales channels such as mobile phones and social networking sites
?
Finalized the new channels to be implemented and set up infrastructure
?
Set up rules for each sales channel
?
Integrated independent systems – Electronic Data Warehouse (EDW), Point of Sale (POS),
Radio Frequency (RF), e-Commerce – to define a streamlined process
?
The end customers needed the ordered items instantly and without any shipping
charges. To meet these demands, they introduced multiple facilities for order fulfillment.
These included:
Critical
Develop capabilities around channel and product analytics to
assist in channel-category role definition as well as pricing
strategy
There are numerous other functions (like content management, e-commerce and mobile
platform, social media, MDM, and partner relationship management) that may require
revamp or some degree of upgrade. The focus of leadership and technology teams should
be to deliver a long term solution which truly delivers in a multi-channel environment.
39
Key Takeaway:
Integrated Multi-channel Customer Engagement Model
?
An e-commerce website for customers to place their orders
?
An order management system for facilitating and maintaining the order workflow
?
A stores workforce system for accepting the order and fulfilling it
?
A customer care helpline for order cancellations
?
The existing e-commerce site was leveraged for in-store orders and to pass them to
relevant stores
?
The existing order management system was redesigned to address new in-store orders
automatically
40
Achieve
How
Real-time
inventory
visibility
1.
Core system which holds real-time information on inventory
across all locations or sites
2.
Integration between core system and vendor's inventory or
order fulfillment system to accurately predict lead time
1.
An enterprise CRM system that will:
a. gather transaction information from all channels
b. capture interests, behavior, and actions on digital channels
c. manage loyalty
d. take inputs from advanced customer analytics
e. feed marketing engine for personalized campaign
One view of
the customer
management
f. feed sales channel with data from other channels and assist
personalized pricing
2.
Order
management
Advanced
POS
Contact
center system
Advanced
analytics
Significance
Critical
Illustration of a Marquee Specialty Retailer’s ‘Buy Anywhere, Fulfill Anywhere’
Journey, from TCS experience
Business strategy
The retailer wanted to improve its sales by adopting and enhancing different channels. The
focus was to achieve the following:
Critical
?
Enhance the existing in-store pick up process
?
Implement the ship from store process
?
Implement the site to store process
A team comprising of executives from customer, third party vendors, and TCS was formed.
Business problems
Curb the urge to enhance existing non-enterprise class CRM for
multi-channel retail. However, if enterprise class CRM is
available, look at re-implementation or modification by doing
thorough analysis
?
Reduction in customer base due to increased shipping costs
?
Reduction in sales with other retailers offering newer shopping options
1.
Advanced system which will enable optimized order fulfillment
?
Increase in stagnant inventory in stores
2.
System must interface with core inventory and CRM system for
inputs and provide feeds to logistics, sales channels, and
customer profile
?
Increased cancellation of orders due to non-availability of items in stores and
distribution centers (DCs) at the same time leading to loss due to non-movement of
items from other stores
1.
Advanced POS system would provide ability to pull out
analytics insights in near real-time to assist in cross-selling, upselling, or closing transactions. POS systems must integrate with
CRM and analytics
1.
Contact center systems must be upgraded to assist associates
with real-time inputs and feed from analytics and CRM about
specific customers
2.
Distinguishing between key and regular customers and
providing personalized service rather than a cookie cutter
response is vital
1.
Like with CRM, look at implementation or modification of
enterprise class analytics system
2.
Develop capabilities around customer analytics across channels
and product portfolio to drive personalized or optimized
marketing campaigns
3.
Critical
Solution implementation
Important
Important
?
Studied existing sales channels and refined the processes
?
Came up with new sales channels such as mobile phones and social networking sites
?
Finalized the new channels to be implemented and set up infrastructure
?
Set up rules for each sales channel
?
Integrated independent systems – Electronic Data Warehouse (EDW), Point of Sale (POS),
Radio Frequency (RF), e-Commerce – to define a streamlined process
?
The end customers needed the ordered items instantly and without any shipping
charges. To meet these demands, they introduced multiple facilities for order fulfillment.
These included:
Critical
Develop capabilities around channel and product analytics to
assist in channel-category role definition as well as pricing
strategy
There are numerous other functions (like content management, e-commerce and mobile
platform, social media, MDM, and partner relationship management) that may require
revamp or some degree of upgrade. The focus of leadership and technology teams should
be to deliver a long term solution which truly delivers in a multi-channel environment.
39
Key Takeaway:
Integrated Multi-channel Customer Engagement Model
?
An e-commerce website for customers to place their orders
?
An order management system for facilitating and maintaining the order workflow
?
A stores workforce system for accepting the order and fulfilling it
?
A customer care helpline for order cancellations
?
The existing e-commerce site was leveraged for in-store orders and to pass them to
relevant stores
?
The existing order management system was redesigned to address new in-store orders
automatically
40
?
Order management, stores and merchandising systems were integrated to provide a
near-real time snap shot of inventory and fulfill the orders within the Service Level
Agreement (SLA)
?
A facility for store associates to work on orders in offline mode was set up as backup to
an automated system
?
A new email notification was sent to the customer at every stage of the order fulfillment
Outcomes
Business and Customer Benefits
?
Increased potential sales by providing alternate channels of shopping
?
Improved customer base by providing the customer with a new and improved shopping
experience with reduced shipping costs
?
Increased market share of sales by providing competitive offers and facilities to
customers
?
Improved inventory turnover ratio by facilitating alternate sales from various stores and
Dcs
1) Sales Channel Enablement
Sales Channels
Shop Online, Ship
Order to Home
Shop through Mobile,
Ship at Home
Scan Barcode,
Shop In-store
Inventory Fulfilment Source
Ship from Dotcom
Inventory
Source: TCS Internal
?
41
In-store Pickup
In-store Pickup, Order
Online Pick-up from Store
Fulfilment Channel
Site to Store
?
Reduction in slow-moving inventory by selling them through alternate stores
?
Improved brand value in local and international markets
?
Customers benefitted from the absence of shipping costs and shipping delays for instore pick-up orders which resulted in more business
?
Customers were able to experience the look and feel of the item before finalizing the
order in store. This improved customer satisfaction
?
Presence of customers in-store led to sale of additional items which increased the store’s
overall sales
?
Movement of stagnant items from the store led to reduced losses in the ship from store
channel
Figure 18: Sales Channel Enablement
2) Seamless Multi-channel Integration
Source: TCS Internal
Figure 19: Seamless Integration
42
?
Order management, stores and merchandising systems were integrated to provide a
near-real time snap shot of inventory and fulfill the orders within the Service Level
Agreement (SLA)
?
A facility for store associates to work on orders in offline mode was set up as backup to
an automated system
?
A new email notification was sent to the customer at every stage of the order fulfillment
Outcomes
Business and Customer Benefits
?
Increased potential sales by providing alternate channels of shopping
?
Improved customer base by providing the customer with a new and improved shopping
experience with reduced shipping costs
?
Increased market share of sales by providing competitive offers and facilities to
customers
?
Improved inventory turnover ratio by facilitating alternate sales from various stores and
Dcs
1) Sales Channel Enablement
Sales Channels
Shop Online, Ship
Order to Home
Shop through Mobile,
Ship at Home
Scan Barcode,
Shop In-store
Inventory Fulfilment Source
Ship from Dotcom
Inventory
Source: TCS Internal
?
41
In-store Pickup
In-store Pickup, Order
Online Pick-up from Store
Fulfilment Channel
Site to Store
?
Reduction in slow-moving inventory by selling them through alternate stores
?
Improved brand value in local and international markets
?
Customers benefitted from the absence of shipping costs and shipping delays for instore pick-up orders which resulted in more business
?
Customers were able to experience the look and feel of the item before finalizing the
order in store. This improved customer satisfaction
?
Presence of customers in-store led to sale of additional items which increased the store’s
overall sales
?
Movement of stagnant items from the store led to reduced losses in the ship from store
channel
Figure 18: Sales Channel Enablement
2) Seamless Multi-channel Integration
Source: TCS Internal
Figure 19: Seamless Integration
42
43
Key Takeaway: 21 Multi-channel Retail KPIs to Chase and Achieve
Conclusion
After a retailer or an FMCG company has embarked on an integrated multi-channel retail
journey, the next steps should involve gauging the effectiveness of these initiatives. This can
be measured by tracking and pursuing the KPIs on a regular and consistent basis. Key multichannel retail KPIs, in no particular order of importance, include:
As the multi-channel consumer has already emerged, the best way to act on this
opportunity is by adopting an IMCR approach that binds an organization’s proposition to its
customers, in a seamless manner. Sooner or later, adequate government regulatory support
will emerge to balance the interests of multi-channel businesses as well as customer
enablement and protection.
?
Average Transaction Size (ATS)
?
Average selling price
The business case for IMCR as a next generation way of retailing is compelling:
?
Customer conversion and retention rates across channels
?
?
Incremental channel sales – online/store/others
?
Percentage change in comparable channel sales
In the 2012 paper, we have already seen that the IMCR model has a direct positive
impact on a retailer’s operating metrics and have identified the core components of the
evolution.
?
Percentage change in comparable category and channel sales
?
?
Percentage change in comparable customer and channel sales
This year, we have noted how some leaders in the APAC market have initiated this
journey and have the potential to compare with the global leaders. At the same time,
they have improved their overall customer experience and brand affinity.
?
We have outlined specific initiatives to be undertaken for adopting the operating model
development, shaping customer experience, and deploying processes and systems
towards an IMCR model. We have provided examples like a marquee US specialty retailer
which has turned around its business performance in the last few years.
?
To summarize, well-developed frameworks, best practices, solution maps, and case
studies to pursue IMCR are available globally as well as locally, for any retailer to take cue
from and initiate their journey today.
?
Non-store markdowns vs. store markdowns
?
Non-store gross margins vs. store gross margins
?
Non-store inventory vs. store inventory
?
Sales per customer
?
Profit per customer
?
Lost sales
?
Share of multi-channel customers to total number of customers
?
Multi-channel customer spends vs. store customer spends
?
Customer satisfaction
?
Online channel influenced sales at store
?
Customer delivery metrics – BOPIS – Buy Online Pick In Store, Home Delivery, In-Store
Delivery
?
Channel-wise returns and refunds
?
Channel-wise promotions Impact
?
Total brand traffic – unique online vs. offline
With this paper, we hope we have provided you with insights that will encourage you to
embrace the methodology for IMCR.
44
43
Key Takeaway: 21 Multi-channel Retail KPIs to Chase and Achieve
Conclusion
After a retailer or an FMCG company has embarked on an integrated multi-channel retail
journey, the next steps should involve gauging the effectiveness of these initiatives. This can
be measured by tracking and pursuing the KPIs on a regular and consistent basis. Key multichannel retail KPIs, in no particular order of importance, include:
As the multi-channel consumer has already emerged, the best way to act on this
opportunity is by adopting an IMCR approach that binds an organization’s proposition to its
customers, in a seamless manner. Sooner or later, adequate government regulatory support
will emerge to balance the interests of multi-channel businesses as well as customer
enablement and protection.
?
Average Transaction Size (ATS)
?
Average selling price
The business case for IMCR as a next generation way of retailing is compelling:
?
Customer conversion and retention rates across channels
?
?
Incremental channel sales – online/store/others
?
Percentage change in comparable channel sales
In the 2012 paper, we have already seen that the IMCR model has a direct positive
impact on a retailer’s operating metrics and have identified the core components of the
evolution.
?
Percentage change in comparable category and channel sales
?
?
Percentage change in comparable customer and channel sales
This year, we have noted how some leaders in the APAC market have initiated this
journey and have the potential to compare with the global leaders. At the same time,
they have improved their overall customer experience and brand affinity.
?
We have outlined specific initiatives to be undertaken for adopting the operating model
development, shaping customer experience, and deploying processes and systems
towards an IMCR model. We have provided examples like a marquee US specialty retailer
which has turned around its business performance in the last few years.
?
To summarize, well-developed frameworks, best practices, solution maps, and case
studies to pursue IMCR are available globally as well as locally, for any retailer to take cue
from and initiate their journey today.
?
Non-store markdowns vs. store markdowns
?
Non-store gross margins vs. store gross margins
?
Non-store inventory vs. store inventory
?
Sales per customer
?
Profit per customer
?
Lost sales
?
Share of multi-channel customers to total number of customers
?
Multi-channel customer spends vs. store customer spends
?
Customer satisfaction
?
Online channel influenced sales at store
?
Customer delivery metrics – BOPIS – Buy Online Pick In Store, Home Delivery, In-Store
Delivery
?
Channel-wise returns and refunds
?
Channel-wise promotions Impact
?
Total brand traffic – unique online vs. offline
With this paper, we hope we have provided you with insights that will encourage you to
embrace the methodology for IMCR.
44
References
Industry Reports
45
?
FICCI-TCS, Consulting Whitepaper – Driving-Consumption-through-integrated-MultichannelRetailing, August 2012
?
Aberdeen Group, Omni Channel Retailing 2013, May 2013
?
Cisco, Operational Implications of Omnichannel Retailing, 2012
?
PwC, Selling to a multi-channel consumer, January 2012
?
RSR, Omni Channel 2012 : Cross Chanel Comes of Age, June 2012
?
RSR, Omni Channel 2013 : The Long Road to Adoption, June 2013
?
HBS, Crafting Integrated Multi-channel Retailing Strategies, May 2009
?
PwC, Global Multi-channel Retail Survey 2012, March 2012
?
BCSC, The Rise and Rise of Multi-Channel Retailing, 2012
?
Aberdeen Group , The Multi-Channel Retail Benchmark Report, December 2005
?
Zmags, Catalog to Commerce: Mobile Consumers and Multi-Channel Web Markets, April 2011
?
Martec International, BT Expedite & Epicor Research, Multichannel retailing 2010, 2010
Online Sources
?
Retailwire, Omni channel at Macys is about Inventory Too, April 2013 – Accessed 15 May 2013
?
Marketing Society (UK), E-commerce Marketing Excellence Award – UK retailer Case Study, 2012 –
Accessed 15 May 2013
?
UK retailer, Multichannel Retail Presentation by Head of the Group’s Multichannel Initiatives, 2011 Accessed 20 May 2013
?
MediaNama, Coca Cola India Launches Online Home Delivery Store, June 2013 - Accessed 20 May
2013
?
Times of India, Coke takes e-com sip, starts online home delivery store, May 2013 - Accessed 20 May
2013
?
MediaNama, Homeshop18 Launches Virtual Shopping Wall At Delhi Airport, January 2013 - Accessed
20 May 2013
?
Forbes, TechinAsia & BigFootRetailSolutions, Indian Online Retailer, Secondary Research, 2012-2013 Accessed 20 May 2013
?
Company’s Annual Reports & Financial Analyst Coverage, Indian Department Store Chain, Secondary
Research, 2012-2013 - Accessed 25 May 2013
?
RIS News Business, Best Buy Beats 25 Retailers in Cross-Channel Integration, February 2010 Accessed 03 June 2013
?
Comscore-Assocham, Study on State of e-commerce in India, September 2012
?
Comscore, Indian e-commerce - Landscape & Trends 2013, February 2013
?
Business Line, Bisleri sets up Shoppe for edge over rivals, June 2012 - Accessed 03 June 2013
?
IBM, Multi-channel retailing: The route to customer focus, 2007
?
Crain's New York Business, Bricks-and-mortar Macy's shows it can make big bucks online, January
2013 - Accessed 05 June 2013
?
Courier Express, Macy’s Overall Sales Grow from a Rapid Increase in On-line Sales, February 2013 Accessed 05 June 2013
?
MSLGROUP Asia, Tesco Wine Co-Buys People’s Insights, June 2013- Accessed July 2013- Accessed 10
July 2013
?
Econsultancy, Why is multi-channel customer service important, September 2011- Accessed 10 July
2013
?
Econsultancy, BT’s Warren Buckley on multi-channel customer service - Multichannel Customer
Experience Survey, September 2011 - Accessed 10 July 2013
?
Facebook Case Study, Kaya Skin Clinic: Generating walk-ins through the Page, 2012-2013 - Accessed
10 July 2013
?
Econsultancy, Best Buy fights showrooming with online price match, October 2012 - Accessed 10 July
2013
?
Time Magazine, Best Buy swears shoppers don’t have to bother showrooming anymore, February
2013 - Accessed 10 July 2013
?
PwC, Multichannel Consumers Take Control, December 2011
?
JustEnough, Taking an Integrated Approach to Multi-Channel Planning, 2011
?
PwC, Pick ‘n’ Mix - Meeting the demands of the new multi-channel shopper, April 2011
?
Verde Group, Understanding the Multi-Channel Shopper, 2011
?
Forrester Research, Retail Multichannel IT Road Map, July 2008
?
TCS, Integrated Multi Channel Retail, September 2009
?
TCS, Marquee US Specialty Retailer’s Multichannel Retail Journey Case Study, 2012
?
Marks & Spencer, Becoming an International Multichannel Retailer – CEO Presentation, 2012
?
Forrester Research, Best Practices In Multichannel Retailing, December 2006
?
HBS, Crafting Integrated Multichannel Retailing Strategies, January 2010
?
BCG, Regaining Price Control in a multichannel World, June 2013
?
Aberdeen Group , Trends in Customer Service, November 2012
?
Retail week Magazine, The challenge of multi-channel pricing, July 2011 - Accessed 10 July 2013
?
The Journal of Interactive Marketing, Key Issues In Multichannel Customer Management, August
2007 - Accessed 15 July 2013
?
Multichannel Merchant, The Ideal multi-channel org chart, May 2009- Accessed 15 July 2013
?
Business Line, Make consumer law e-com-friendly by Ankur Singla, May 2013 - Accessed 15 July 2013
46
References
Industry Reports
45
?
FICCI-TCS, Consulting Whitepaper – Driving-Consumption-through-integrated-MultichannelRetailing, August 2012
?
Aberdeen Group, Omni Channel Retailing 2013, May 2013
?
Cisco, Operational Implications of Omnichannel Retailing, 2012
?
PwC, Selling to a multi-channel consumer, January 2012
?
RSR, Omni Channel 2012 : Cross Chanel Comes of Age, June 2012
?
RSR, Omni Channel 2013 : The Long Road to Adoption, June 2013
?
HBS, Crafting Integrated Multi-channel Retailing Strategies, May 2009
?
PwC, Global Multi-channel Retail Survey 2012, March 2012
?
BCSC, The Rise and Rise of Multi-Channel Retailing, 2012
?
Aberdeen Group , The Multi-Channel Retail Benchmark Report, December 2005
?
Zmags, Catalog to Commerce: Mobile Consumers and Multi-Channel Web Markets, April 2011
?
Martec International, BT Expedite & Epicor Research, Multichannel retailing 2010, 2010
Online Sources
?
Retailwire, Omni channel at Macys is about Inventory Too, April 2013 – Accessed 15 May 2013
?
Marketing Society (UK), E-commerce Marketing Excellence Award – UK retailer Case Study, 2012 –
Accessed 15 May 2013
?
UK retailer, Multichannel Retail Presentation by Head of the Group’s Multichannel Initiatives, 2011 Accessed 20 May 2013
?
MediaNama, Coca Cola India Launches Online Home Delivery Store, June 2013 - Accessed 20 May
2013
?
Times of India, Coke takes e-com sip, starts online home delivery store, May 2013 - Accessed 20 May
2013
?
MediaNama, Homeshop18 Launches Virtual Shopping Wall At Delhi Airport, January 2013 - Accessed
20 May 2013
?
Forbes, TechinAsia & BigFootRetailSolutions, Indian Online Retailer, Secondary Research, 2012-2013 Accessed 20 May 2013
?
Company’s Annual Reports & Financial Analyst Coverage, Indian Department Store Chain, Secondary
Research, 2012-2013 - Accessed 25 May 2013
?
RIS News Business, Best Buy Beats 25 Retailers in Cross-Channel Integration, February 2010 Accessed 03 June 2013
?
Comscore-Assocham, Study on State of e-commerce in India, September 2012
?
Comscore, Indian e-commerce - Landscape & Trends 2013, February 2013
?
Business Line, Bisleri sets up Shoppe for edge over rivals, June 2012 - Accessed 03 June 2013
?
IBM, Multi-channel retailing: The route to customer focus, 2007
?
Crain's New York Business, Bricks-and-mortar Macy's shows it can make big bucks online, January
2013 - Accessed 05 June 2013
?
Courier Express, Macy’s Overall Sales Grow from a Rapid Increase in On-line Sales, February 2013 Accessed 05 June 2013
?
MSLGROUP Asia, Tesco Wine Co-Buys People’s Insights, June 2013- Accessed July 2013- Accessed 10
July 2013
?
Econsultancy, Why is multi-channel customer service important, September 2011- Accessed 10 July
2013
?
Econsultancy, BT’s Warren Buckley on multi-channel customer service - Multichannel Customer
Experience Survey, September 2011 - Accessed 10 July 2013
?
Facebook Case Study, Kaya Skin Clinic: Generating walk-ins through the Page, 2012-2013 - Accessed
10 July 2013
?
Econsultancy, Best Buy fights showrooming with online price match, October 2012 - Accessed 10 July
2013
?
Time Magazine, Best Buy swears shoppers don’t have to bother showrooming anymore, February
2013 - Accessed 10 July 2013
?
PwC, Multichannel Consumers Take Control, December 2011
?
JustEnough, Taking an Integrated Approach to Multi-Channel Planning, 2011
?
PwC, Pick ‘n’ Mix - Meeting the demands of the new multi-channel shopper, April 2011
?
Verde Group, Understanding the Multi-Channel Shopper, 2011
?
Forrester Research, Retail Multichannel IT Road Map, July 2008
?
TCS, Integrated Multi Channel Retail, September 2009
?
TCS, Marquee US Specialty Retailer’s Multichannel Retail Journey Case Study, 2012
?
Marks & Spencer, Becoming an International Multichannel Retailer – CEO Presentation, 2012
?
Forrester Research, Best Practices In Multichannel Retailing, December 2006
?
HBS, Crafting Integrated Multichannel Retailing Strategies, January 2010
?
BCG, Regaining Price Control in a multichannel World, June 2013
?
Aberdeen Group , Trends in Customer Service, November 2012
?
Retail week Magazine, The challenge of multi-channel pricing, July 2011 - Accessed 10 July 2013
?
The Journal of Interactive Marketing, Key Issues In Multichannel Customer Management, August
2007 - Accessed 15 July 2013
?
Multichannel Merchant, The Ideal multi-channel org chart, May 2009- Accessed 15 July 2013
?
Business Line, Make consumer law e-com-friendly by Ankur Singla, May 2013 - Accessed 15 July 2013
46
TCS-FICCI – Massmerize 2013
Adapting to the Multi-channel Customer
A Roadmap for Integrated Multi-channel Retailing
About TCS’ Global Consulting Practice
TCS’ Global Consulting Practice (GCP) is a key component in how TCS delivers additional value to
clients. Using our collective industry insight, technology expertise, and consulting know-how,
we partner with enterprises worldwide to deliver integrated end-to-end IT enabled business
transformation services.
By tapping our worldwide pool of resources - onsite, offshore and nearshore, our high caliber
consultants leverage solution accelerators and practice capabilities, balanced with our
knowledge of local market demands, to enable enterprises to effectively meet their business
goals.
GCP spearheads TCS' consulting capacity with consultants located in North America, UK, Europe,
Asia Pacific, India, Ibero-America and Australia.
Contact
For more information, contact [email protected]
About Tata Consultancy Services Ltd (TCS)
Tata Consultancy Services is an IT services, consulting and business solutions organization that
delivers real results to global business, ensuring a level of certainty no other firm can match.
TCS offers a consulting-led, integrated portfolio of IT and IT-enabled, infrastructure, engineering
and assurance services. This is delivered through its unique Global Network Delivery ModelTM,
recognized as the benchmark of excellence in software development. A part of the Tata Group,
India’s largest industrial conglomerate, TCS has a global footprint and is listed on the National
Stock Exchange and Bombay Stock Exchange in India.
All content / information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content / information contained here is
correct at the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or
distributed in any form without prior written permission from TCS. Unauthorized use of the content / information appearing here may violate copyright,
trademark and other applicable laws, and could result in criminal or civil penalties.
Copyright © 2013 Tata Consultancy Services Limited
TCS Design Services I M I 07 I 13
For more information, visit us at www.tcs.com
doc_369553347.pdf
The Integrated Multi-channel Retailing (IMCR) Model, we presented as a sustainable retail
business model of the future at Massmerize 2012, has been well received by a number of
retailers who agree with the merits of the business case. Over the last year, several
companies approached us for a detailed view of the approach, the imperatives and best
practices in this area, the credible industry examples and, finally, tracking of the progress of
their initiatives. This knowledge report will address the requirement and help achieve a truly
integrated multi-channel retail business model.
TCS-FICCI – Massmerize 2013
Adapting to the Multi-channel Customer
A Roadmap for Integrated Multi-channel Retailing
About TCS’ Global Consulting Practice
TCS’ Global Consulting Practice (GCP) is a key component in how TCS delivers additional value to
clients. Using our collective industry insight, technology expertise, and consulting know-how,
we partner with enterprises worldwide to deliver integrated end-to-end IT enabled business
transformation services.
By tapping our worldwide pool of resources - onsite, offshore and nearshore, our high caliber
consultants leverage solution accelerators and practice capabilities, balanced with our
knowledge of local market demands, to enable enterprises to effectively meet their business
goals.
GCP spearheads TCS' consulting capacity with consultants located in North America, UK, Europe,
Asia Pacific, India, Ibero-America and Australia.
Contact
For more information, contact [email protected]
About Tata Consultancy Services Ltd (TCS)
Tata Consultancy Services is an IT services, consulting and business solutions organization that
delivers real results to global business, ensuring a level of certainty no other firm can match.
TCS offers a consulting-led, integrated portfolio of IT and IT-enabled, infrastructure, engineering
and assurance services. This is delivered through its unique Global Network Delivery ModelTM,
recognized as the benchmark of excellence in software development. A part of the Tata Group,
India’s largest industrial conglomerate, TCS has a global footprint and is listed on the National
Stock Exchange and Bombay Stock Exchange in India.
All content / information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content / information contained here is
correct at the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or
distributed in any form without prior written permission from TCS. Unauthorized use of the content / information appearing here may violate copyright,
trademark and other applicable laws, and could result in criminal or civil penalties.
Copyright © 2013 Tata Consultancy Services Limited
TCS Design Services I M I 07 I 13
For more information, visit us at www.tcs.com
Foreword
Dear Friends,
It gives me great pleasure to welcome you to Massmerize 2013.
Taking the dialogue ahead from last year’s consumption theme, this year we look at
how consumerism in the digital era is reshaping the traditional consumer businesses
of FMCG and Retail. And to their credit, they have made some interesting moves
already.
Consumer behavior is changing in sync with fast emerging consumer technologies
and in the process, giving rise to new business opportunities as well as challenges to
existing models. Organizations which are moving in pace with these rapid changes
will succeed immensely in the coming future. I am hopeful that this event will trigger
insights, dialogue, thoughts and actions towards achieving that success.
I take this opportunity to wish Massmerize all the very best and I am hoping that it will
be an insightful learning experience for all those who attend it.
Regards,
Kurush Grant
Chairman – FICCI FMCG Committee
1
2
Foreword
Dear Friends,
It gives me great pleasure to welcome you to Massmerize 2013.
Taking the dialogue ahead from last year’s consumption theme, this year we look at
how consumerism in the digital era is reshaping the traditional consumer businesses
of FMCG and Retail. And to their credit, they have made some interesting moves
already.
Consumer behavior is changing in sync with fast emerging consumer technologies
and in the process, giving rise to new business opportunities as well as challenges to
existing models. Organizations which are moving in pace with these rapid changes
will succeed immensely in the coming future. I am hopeful that this event will trigger
insights, dialogue, thoughts and actions towards achieving that success.
I take this opportunity to wish Massmerize all the very best and I am hoping that it will
be an insightful learning experience for all those who attend it.
Regards,
Kurush Grant
Chairman – FICCI FMCG Committee
1
2
Dear Friends,
Welcome to Massmerize 2013.
From consumption opportunities to consumerism in the digital era, we have come a
long way from last year.
Technology has enabled consumers to engage directly with their favorite brands – be
it products or stores. Multiple channels of communication like social media and
digital channels, which go beyond conventional media, have permitted marketers to
reach out to new consumer segments, especially the youth. While conventional
retail channels like stores continue to expand and flourish, new technologies in
hosting products, communicating to consumers, and allowing them to transact
securely have enabled multiple channels such as e-commerce, m-commerce and
television shopping to proliferate. Marketers and retailers who have embraced these
technologies and channels remain at the forefront of change.
With this event, we are positive about creating a business strategy that is focused on
the multichannel consumer. I hope that you will find the insights, interactions and
best practices shared at the event to be of immense value to you. I also believe that
they will help shape your organization’s efforts to stay relevant in the digital era.
Regards,
Bijou Kurien
Chairman – FICCI Retail Committee
3
4
Dear Friends,
Welcome to Massmerize 2013.
From consumption opportunities to consumerism in the digital era, we have come a
long way from last year.
Technology has enabled consumers to engage directly with their favorite brands – be
it products or stores. Multiple channels of communication like social media and
digital channels, which go beyond conventional media, have permitted marketers to
reach out to new consumer segments, especially the youth. While conventional
retail channels like stores continue to expand and flourish, new technologies in
hosting products, communicating to consumers, and allowing them to transact
securely have enabled multiple channels such as e-commerce, m-commerce and
television shopping to proliferate. Marketers and retailers who have embraced these
technologies and channels remain at the forefront of change.
With this event, we are positive about creating a business strategy that is focused on
the multichannel consumer. I hope that you will find the insights, interactions and
best practices shared at the event to be of immense value to you. I also believe that
they will help shape your organization’s efforts to stay relevant in the digital era.
Regards,
Bijou Kurien
Chairman – FICCI Retail Committee
3
4
Contents
1. Executive Summary
Current State of Multi-Channel Retailing
5
Roadmap for IMCR
8
2. About The Authors
10
3. Multi-Channel Retailing Today
12
Global Benchmarking – IMCR Evolution
14
Asian Initiatives – IMCR Evolution
15
4. Inspiration from Retailers – FMCG Players innovating in Multi-Channel
20
5. Multi-channel Value Chain – Customer Buying and Consumption Journey
22
6. Approach for Integrated Multi-Channel Retailing
25
Initiatives, Roadmap, and Best Practices for Integrated Multi-channel Retailing
5
1
28
7. Key Takeaway: Integrated Multi-channel Customer Engagement Model
30
8. Key Takeaway: 21 Multi-channel Retail KPIs to Chase and Achieve
35
9. Conclusion
40
10. References
45
6
Contents
1. Executive Summary
Current State of Multi-Channel Retailing
5
Roadmap for IMCR
8
2. About The Authors
10
3. Multi-Channel Retailing Today
12
Global Benchmarking – IMCR Evolution
14
Asian Initiatives – IMCR Evolution
15
4. Inspiration from Retailers – FMCG Players innovating in Multi-Channel
20
5. Multi-channel Value Chain – Customer Buying and Consumption Journey
22
6. Approach for Integrated Multi-Channel Retailing
25
Initiatives, Roadmap, and Best Practices for Integrated Multi-channel Retailing
5
1
28
7. Key Takeaway: Integrated Multi-channel Customer Engagement Model
30
8. Key Takeaway: 21 Multi-channel Retail KPIs to Chase and Achieve
35
9. Conclusion
40
10. References
45
6
EXECUTIVE SUMMARY
The Integrated Multi-channel Retailing (IMCR) Model, we presented as a sustainable retail
business model of the future at Massmerize 2012, has been well received by a number of
retailers who agree with the merits of the business case. Over the last year, several
companies approached us for a detailed view of the approach, the imperatives and best
practices in this area, the credible industry examples and, finally, tracking of the progress of
their initiatives. This knowledge report will address the requirement and help achieve a truly
integrated multi-channel retail business model.
Current State of Multi-Channel Retailing
Before we get down to outlining the roadmap for IMCR, let us take a quick look at the
current state of multi-channel retail – globally as well as in India.
Global consumer indicators reveal that multi-channel consumers (consumers who shop
across multiple channels, including web, mobile, offline store), spend more on brands than
single channel shoppers. It is interesting to note that 54% of multi-channel customers shop
with only five retailers or less. This indicates that only a few retailers have been successful in
adapting their business models, while others are lagging behind.
To explain further, a prominent retail group in the United Kingdom made inspiring strides in
multi-channel retail between 2009 and 2013. Their online business now contributes nearly
12% of total sales, an increase from 5.6% in 2009. They also registered a healthy growth rate
of 27% per year. Additionally, they have been able to measure multi-channel retail revenues
accurately, and it is estimated to be at nearly 25% of total revenues in 2013.
To represent the APAC region, we also evaluated a leading Indian departmental store chain
with a credible online presence. In the absence of complete IMCR metrics in this market, we
compared their online performance to a pure online fashion retailer to evaluate their multichannel model. Theirs was a mix of online and physical stores. We evaluated the
opportunities they were missing in comparison to available potential. Our analysis revealed
that the company could have an IMCR revenue component of 17% in 2013. The number of
visitors to their online channel had grown 1.57 times, whereas there was only a 9% increase
in store footfalls. We estimate that by 2018, the number of visitors to the retail brands’ online
channel will far exceed the number of its store visitors. It is therefore important that retailers
focus on becoming a truly integrated multi-channel retail entity.
Another interesting trend we witnessed is that FMCG players are not only partnering with
retailers in their multi-channel retailing efforts, but are also experimenting with initiatives of
their own in this space. Coca-Cola has recently piloted online and mobile initiatives in India,
so that they can reach customers directly at their homes. There is hence a good business
case to review existing business models and explore the possibilities available through
integrated multi-channel retailing.
7
Following the positives from the leaders in this space, let us get down to the basics of the
entire journey. We have mapped the multichannel consumer buying journey and observed
that they have become increasingly channel agnostic. For this reason it is becoming
important for retailers to shape their business to reach the customers wherever they are –
store, mobile, web, TV, phone, airport, magazine or at home. And this can be achieved only
by pursuing the end state of integrated multi-channel retailing. There are a number of issues
that need to be considered as this model increases in popularity. Customers will need
adequate regulatory support and protection. For example, the issue regarding ambiguity
with respect to jurisdiction as a result of the online retailer’s business structure and model. It
is possible that the retailer’s registered office, warehouse location, and service outlet are in
three different places. In this scenario, who is responsible for customer grievances arising
from a multi-channel model? There is still some ground to be covered on this front.
Meanwhile, ITC Limited Chairman Kurush Grant interacted with us on this topic and
highlighted key imperatives towards building a robust IMCR roadmap covering the use of
shopper insights, managing channel conflict and enabling organizational structures, which
have been integrated in our approach on the same.
The integrated multi-channel retail journey involved four phases – Individual to
Independent to Interconnected to Integrated. We now focus on what it takes to reach the
Integrated phase and to keep evolving.
Roadmap for IMCR
For a retailer to become a successful integrated multi-channel retailer, it is imperative to
address multiple issues holistically. These issues pan across strategy, operations,
organization, processes and systems:
?
?
?
Defining operating strategy and model: leading to right governance and cross
channel collaboration
?
Business and channel strategy
?
Assortment strategy
?
Organization structure, Key Performance Indicators (KPIs)
Shaping customer experience: leading to seamless shopping behavior across channels
?
Pricing
?
Service
?
Customer order fulfillment
Deploying processes and systems: leading to one view of the customer, inventory and
orders across channels
8
EXECUTIVE SUMMARY
The Integrated Multi-channel Retailing (IMCR) Model, we presented as a sustainable retail
business model of the future at Massmerize 2012, has been well received by a number of
retailers who agree with the merits of the business case. Over the last year, several
companies approached us for a detailed view of the approach, the imperatives and best
practices in this area, the credible industry examples and, finally, tracking of the progress of
their initiatives. This knowledge report will address the requirement and help achieve a truly
integrated multi-channel retail business model.
Current State of Multi-Channel Retailing
Before we get down to outlining the roadmap for IMCR, let us take a quick look at the
current state of multi-channel retail – globally as well as in India.
Global consumer indicators reveal that multi-channel consumers (consumers who shop
across multiple channels, including web, mobile, offline store), spend more on brands than
single channel shoppers. It is interesting to note that 54% of multi-channel customers shop
with only five retailers or less. This indicates that only a few retailers have been successful in
adapting their business models, while others are lagging behind.
To explain further, a prominent retail group in the United Kingdom made inspiring strides in
multi-channel retail between 2009 and 2013. Their online business now contributes nearly
12% of total sales, an increase from 5.6% in 2009. They also registered a healthy growth rate
of 27% per year. Additionally, they have been able to measure multi-channel retail revenues
accurately, and it is estimated to be at nearly 25% of total revenues in 2013.
To represent the APAC region, we also evaluated a leading Indian departmental store chain
with a credible online presence. In the absence of complete IMCR metrics in this market, we
compared their online performance to a pure online fashion retailer to evaluate their multichannel model. Theirs was a mix of online and physical stores. We evaluated the
opportunities they were missing in comparison to available potential. Our analysis revealed
that the company could have an IMCR revenue component of 17% in 2013. The number of
visitors to their online channel had grown 1.57 times, whereas there was only a 9% increase
in store footfalls. We estimate that by 2018, the number of visitors to the retail brands’ online
channel will far exceed the number of its store visitors. It is therefore important that retailers
focus on becoming a truly integrated multi-channel retail entity.
Another interesting trend we witnessed is that FMCG players are not only partnering with
retailers in their multi-channel retailing efforts, but are also experimenting with initiatives of
their own in this space. Coca-Cola has recently piloted online and mobile initiatives in India,
so that they can reach customers directly at their homes. There is hence a good business
case to review existing business models and explore the possibilities available through
integrated multi-channel retailing.
7
Following the positives from the leaders in this space, let us get down to the basics of the
entire journey. We have mapped the multichannel consumer buying journey and observed
that they have become increasingly channel agnostic. For this reason it is becoming
important for retailers to shape their business to reach the customers wherever they are –
store, mobile, web, TV, phone, airport, magazine or at home. And this can be achieved only
by pursuing the end state of integrated multi-channel retailing. There are a number of issues
that need to be considered as this model increases in popularity. Customers will need
adequate regulatory support and protection. For example, the issue regarding ambiguity
with respect to jurisdiction as a result of the online retailer’s business structure and model. It
is possible that the retailer’s registered office, warehouse location, and service outlet are in
three different places. In this scenario, who is responsible for customer grievances arising
from a multi-channel model? There is still some ground to be covered on this front.
Meanwhile, ITC Limited Chairman Kurush Grant interacted with us on this topic and
highlighted key imperatives towards building a robust IMCR roadmap covering the use of
shopper insights, managing channel conflict and enabling organizational structures, which
have been integrated in our approach on the same.
The integrated multi-channel retail journey involved four phases – Individual to
Independent to Interconnected to Integrated. We now focus on what it takes to reach the
Integrated phase and to keep evolving.
Roadmap for IMCR
For a retailer to become a successful integrated multi-channel retailer, it is imperative to
address multiple issues holistically. These issues pan across strategy, operations,
organization, processes and systems:
?
?
?
Defining operating strategy and model: leading to right governance and cross
channel collaboration
?
Business and channel strategy
?
Assortment strategy
?
Organization structure, Key Performance Indicators (KPIs)
Shaping customer experience: leading to seamless shopping behavior across channels
?
Pricing
?
Service
?
Customer order fulfillment
Deploying processes and systems: leading to one view of the customer, inventory and
orders across channels
8
This paper covers best practices on these three critical aspects and proposes, what we call, a
pragmatic roadmap for attaining an integrated multi-channel state.
These steps must be repeated on a regular and consistent basis to adapt to a truly holistic
integrated multi-channel way of retailing. New operating models will emerge, competitors
will catch up, consumer expectations will change – what’s superior service today is common
tomorrow, with new tools and system enablers coming in. It is important to observe here
that this is the new way of doing business. Best practices highlighted from the likes of Home
Depot, Tesco, Best Buy and Macy’s reiterate this.
Let us take a look at the journey of a marquee specialty retailer in the USA, in the integrated
multi-channel retail program. The strategy was to increase sales by adopting and enhancing
different consumer channels. The retailer commenced multi-channel retail initiatives with
the objective of enabling its customers to ’buy anywhere’ and to ‘fulfill orders anywhere’.
Anticipating business challenges like a reduction in customer base because of increased
shipping costs, the retailer refined the business processes, set up new channels like mobile
and social media, and integrated independent systems. The retailer also reviewed processes
for Point of Sale (POS), Data Warehouse (DW), e-commerce, and Enterprise Resource
Planning (ERP) for seamless processes and uniform customer experience. This resulted in
enhanced customer satisfaction and increased store sales when customers came in to
collect their online orders.
The example above not only strengthens the business case for pursuing an integrated multichannel retail model but also highlights key metrics that an organization needs to track to
measure success. We have outlined a list of 21 key metrics, the important ones include:
incremental channel sales, sales per customer, share of multi-channel customers to total
number of customers, total brand traffic, and customer satisfaction.
In conclusion, the advent of IMCR is imminent as the multi-channel consumer has already
emerged and the best way to make the most of this opportunity is by having an integrated
approach that binds together an organization’s proposition to its customers in a seamless
manner. The journey is arduous as new types of behavior, innovations and opportunities
emerge. However, having an integrated multi-channel retail view of the organization will
help meet these new developments every time. The time to realign and redo the traditional
channel-silo model is now. IMCR is the new normal.
About the Authors
Anil Rajpal – Practice Head, Global Consulting Practice – Retail and CPG
Anil has over 17 years of experience in management consulting and operations and
currently heads the Retail and Consumer Products Group for TCS’ Global Consulting Practice
in India. In this role, he has been instrumental in establishing and developing the consulting
practice in India. Prior to TCS, Anil worked with Kurt Salmon Associates, India.
As a management consultant, Anil has been passionately involved in formulating business
strategies and setting up operations of several leading Indian and international retail,
e-commerce, and consumer product companies.
He is also actively involved with leading industry associations for which he spearheads
strategic initiatives. Most recently, Anil showcased the India retail opportunity to
international retailers, and conceptualized and executed India’s first ‘Operations
Benchmarking’ study.
Kedar Mehta – Engagement Lead, Global Consulting Practice – Retail and CPG
Kedar is an Engagement Lead with TCS’ Global Consulting Practice – Retail and Consumer
Products Group - and consults with retailers in their strategy, marketing, and operations
improvement initiatives. He has nearly 10 years of work experience in retail, e-business, and
management consulting and has worked with international as well as Indian players, across
multiple categories, formats, and markets. In his current role, he has led a number of
thought leadership initiatives, such as developing a go-to-market framework for integrated
multi-channel retailing and conducting India's first-ever Retail Operations Benchmarking
and Excellence Survey (ROBES) with FICCI and the Retailers Association of India (RAI)
respectively.
Abhishek Pangaria – Engagement Lead, Global Consulting Practice – Retail and CPG
Abhishek has over 13 years of international experience in management and technology
consulting. Currently, as an Engagement Manager with TCS’ Global Consulting Practice,
Abhishek works with leading organizations on diverse areas like business planning, supply
chain improvement, technology change and adoption, development of e-commerce, and
multi-channel operations. Abhishek is passionate about helping young entrepreneurs set up
businesses and has been an entrepreneur himself.
Deepali Malhotra – Consultant, Global Consulting Practice – Retail and CPG
9
Deepali is a Consultant with TCS’ Global Consulting Practice – Retail and Consumer Products
Group and has around 6 years of experience in operations improvement and IT functional
consulting in retail and e-commerce. She has worked for global retail clients across three
continents - North America, Europe, and Asia, and across multiple categories and formats.
She has also published whitepapers and articles in academic journals, and has helped to
execute India’s first TCS-led Retail Operations Benchmarking and Excellence Survey (ROBES)
with the Retailers Association of India (RAI).
10
This paper covers best practices on these three critical aspects and proposes, what we call, a
pragmatic roadmap for attaining an integrated multi-channel state.
These steps must be repeated on a regular and consistent basis to adapt to a truly holistic
integrated multi-channel way of retailing. New operating models will emerge, competitors
will catch up, consumer expectations will change – what’s superior service today is common
tomorrow, with new tools and system enablers coming in. It is important to observe here
that this is the new way of doing business. Best practices highlighted from the likes of Home
Depot, Tesco, Best Buy and Macy’s reiterate this.
Let us take a look at the journey of a marquee specialty retailer in the USA, in the integrated
multi-channel retail program. The strategy was to increase sales by adopting and enhancing
different consumer channels. The retailer commenced multi-channel retail initiatives with
the objective of enabling its customers to ’buy anywhere’ and to ‘fulfill orders anywhere’.
Anticipating business challenges like a reduction in customer base because of increased
shipping costs, the retailer refined the business processes, set up new channels like mobile
and social media, and integrated independent systems. The retailer also reviewed processes
for Point of Sale (POS), Data Warehouse (DW), e-commerce, and Enterprise Resource
Planning (ERP) for seamless processes and uniform customer experience. This resulted in
enhanced customer satisfaction and increased store sales when customers came in to
collect their online orders.
The example above not only strengthens the business case for pursuing an integrated multichannel retail model but also highlights key metrics that an organization needs to track to
measure success. We have outlined a list of 21 key metrics, the important ones include:
incremental channel sales, sales per customer, share of multi-channel customers to total
number of customers, total brand traffic, and customer satisfaction.
In conclusion, the advent of IMCR is imminent as the multi-channel consumer has already
emerged and the best way to make the most of this opportunity is by having an integrated
approach that binds together an organization’s proposition to its customers in a seamless
manner. The journey is arduous as new types of behavior, innovations and opportunities
emerge. However, having an integrated multi-channel retail view of the organization will
help meet these new developments every time. The time to realign and redo the traditional
channel-silo model is now. IMCR is the new normal.
About the Authors
Anil Rajpal – Practice Head, Global Consulting Practice – Retail and CPG
Anil has over 17 years of experience in management consulting and operations and
currently heads the Retail and Consumer Products Group for TCS’ Global Consulting Practice
in India. In this role, he has been instrumental in establishing and developing the consulting
practice in India. Prior to TCS, Anil worked with Kurt Salmon Associates, India.
As a management consultant, Anil has been passionately involved in formulating business
strategies and setting up operations of several leading Indian and international retail,
e-commerce, and consumer product companies.
He is also actively involved with leading industry associations for which he spearheads
strategic initiatives. Most recently, Anil showcased the India retail opportunity to
international retailers, and conceptualized and executed India’s first ‘Operations
Benchmarking’ study.
Kedar Mehta – Engagement Lead, Global Consulting Practice – Retail and CPG
Kedar is an Engagement Lead with TCS’ Global Consulting Practice – Retail and Consumer
Products Group - and consults with retailers in their strategy, marketing, and operations
improvement initiatives. He has nearly 10 years of work experience in retail, e-business, and
management consulting and has worked with international as well as Indian players, across
multiple categories, formats, and markets. In his current role, he has led a number of
thought leadership initiatives, such as developing a go-to-market framework for integrated
multi-channel retailing and conducting India's first-ever Retail Operations Benchmarking
and Excellence Survey (ROBES) with FICCI and the Retailers Association of India (RAI)
respectively.
Abhishek Pangaria – Engagement Lead, Global Consulting Practice – Retail and CPG
Abhishek has over 13 years of international experience in management and technology
consulting. Currently, as an Engagement Manager with TCS’ Global Consulting Practice,
Abhishek works with leading organizations on diverse areas like business planning, supply
chain improvement, technology change and adoption, development of e-commerce, and
multi-channel operations. Abhishek is passionate about helping young entrepreneurs set up
businesses and has been an entrepreneur himself.
Deepali Malhotra – Consultant, Global Consulting Practice – Retail and CPG
9
Deepali is a Consultant with TCS’ Global Consulting Practice – Retail and Consumer Products
Group and has around 6 years of experience in operations improvement and IT functional
consulting in retail and e-commerce. She has worked for global retail clients across three
continents - North America, Europe, and Asia, and across multiple categories and formats.
She has also published whitepapers and articles in academic journals, and has helped to
execute India’s first TCS-led Retail Operations Benchmarking and Excellence Survey (ROBES)
with the Retailers Association of India (RAI).
10
Multi-Channel Retailing Today
In a FICCI-TCS paper released at Massmerize 2012, the idea of pursuing IMCR to address a
trillion-dollar retail consumption opportunity was presented. The IMCR model that was
envisaged not only had an impact on reaching more consumers and meeting retail demand
quickly across multiple geographies, but also had the potential to directly impact a retailer’s
operating margins and profitability.
Before outlining how retailers can adapt well to a multi-channel consumer and build a multichannel retail roadmap, let’s first take a look at where things stand today. Examples of the
multi-channel retail evolution between developed markets – Europe – and emerging
markets – Asia are highlighted in the following section. We have taken an example of a
leading UK retail group and an Indian department store chain to represent each market.
Global Benchmarking – IMCR Evolution
Illustration from a leading UK retail group
First up is a leading UK retail group that runs a leading department store chain and a
premium food retail supermarket in the country, besides a host of other smaller retail
formats. We have reviewed their IMCR numbers from 2009 to 2012 and projections for end
2013 in figure 1.
Leading UK Retail Group - Multi Channel Retail (MCR) Evolution
Sales
£ Million
2009
2010
Total
7000
7400
Of All Online Orders
Online
393
503
Online Proportion
5.6
6.8
Click & Collect Order
16%
17%
This group has seen that 9 out 10 online customers are still buying at stores and added
incremental sales of £7.6 million in 2009 alone, when they visited the store to collect their
‘click and collect’ orders. While these numbers are encouraging enough to build a retailer’s
case for IMCR initiatives, it is interesting to note that they are yet to target the requirements
of ‘store’ consumers who are buying online. Currently, only 1 out 10 store customers is
buying online. If they are able to increase this trend and proportion of sales online, the
growth opportunity for overall sales is immense.
It will be interesting to compare the IMCR evolution in developed markets like the UK and
the emerging Asian retail markets.
Asian Initiatives – IMCR Evolution
Illustration from a leading department store chain with an online channel, compared to a pure
online fashion store in India
Multi-channel retail is still a relatively new phenomenon in Asia; there are no clear IMCR
numbers of any single retailer as yet. At this point in time, both the store and online retailers
seem to be emerging as independent models. There is no evidence of store retailers being
strong online or online retailers interested in store retailing. This makes it difficult to evaluate
the evolution and potential of IMCR in Asia. We therefore compare a retailer with store and
online channels, with one that only has an online presence. Relevant data of a leading
department store chain with credible online initiatives was compared with the data from a
market leading pure online fashion store, in India, in figure 2.
1. Online channel growth faster and bigger than store
MCR Proportion
Department Store Chain
Store
Footfalls - Mn
Visitors - Mn
ATS - INR
ATS - INR
2012
37
7
2300
1250
20
2013
41
11
2500
1600
100
Growth
1.11
1.57
1.09
1.28
5
13%
8200
685
8.4
22%
16%
2012
8730
877
10.04
26%
20%
2013*
9540
1122
11.76
31%
25%
The share of its IMCR has grown from 7% of its total sales to 20% in 2012 and is projected to
be 25% at the end of 2013, having grown at 27% every year since 2009. Boosting this trend
is the fact that ‘click and collect orders’ are becoming popular among consumers,
constituting nearly 26% of all online orders in 2012 and the number is expected to be 31%
for current year.
Visitors - Mn
Figure 2: A leading department store chain vs. a pure online fashion retailer in India
– IMCR evolution
Figure 1: A leading UK retail group’s IMCR evolution
The share of its online business has grown steadily from £393 million in 2009 to an
estimated £1,122 million in 2013, growing at a healthy 27%. Online business share as a
proportion of the group’s total sales is projected to be 11.76% at the end of 2013.
Online
Source: TCS Internal
Source: TCS Internal
11
Online
7%
2011
Pure Online Fashion Retailer
Stores
Takeaways:
?
The number of visitors for the online fashion retailer increased fivefold – from 20 million
to 100 million, between 2012 and 2013. In comparison, the footfalls and online visitors to
the department store chain only grew by 1.11 and 1.57 times respectively. This means
that department store chains can gain immensely if they focus on online customers, a
number growing faster than its own store traffic, to benchmark and reach the potential
numbers of an online fashion retailer.
?
The Average Transaction Size (ATS) for the department store chain grew by 9% only,
whereas for the pure online fashion retailer, it grew by an impressive 28% between 2012
and 2013. We can infer that consumers are increasingly shopping online and the
department store chain is not utilizing its full growth potential.
12
Multi-Channel Retailing Today
In a FICCI-TCS paper released at Massmerize 2012, the idea of pursuing IMCR to address a
trillion-dollar retail consumption opportunity was presented. The IMCR model that was
envisaged not only had an impact on reaching more consumers and meeting retail demand
quickly across multiple geographies, but also had the potential to directly impact a retailer’s
operating margins and profitability.
Before outlining how retailers can adapt well to a multi-channel consumer and build a multichannel retail roadmap, let’s first take a look at where things stand today. Examples of the
multi-channel retail evolution between developed markets – Europe – and emerging
markets – Asia are highlighted in the following section. We have taken an example of a
leading UK retail group and an Indian department store chain to represent each market.
Global Benchmarking – IMCR Evolution
Illustration from a leading UK retail group
First up is a leading UK retail group that runs a leading department store chain and a
premium food retail supermarket in the country, besides a host of other smaller retail
formats. We have reviewed their IMCR numbers from 2009 to 2012 and projections for end
2013 in figure 1.
Leading UK Retail Group - Multi Channel Retail (MCR) Evolution
Sales
£ Million
2009
2010
Total
7000
7400
Of All Online Orders
Online
393
503
Online Proportion
5.6
6.8
Click & Collect Order
16%
17%
This group has seen that 9 out 10 online customers are still buying at stores and added
incremental sales of £7.6 million in 2009 alone, when they visited the store to collect their
‘click and collect’ orders. While these numbers are encouraging enough to build a retailer’s
case for IMCR initiatives, it is interesting to note that they are yet to target the requirements
of ‘store’ consumers who are buying online. Currently, only 1 out 10 store customers is
buying online. If they are able to increase this trend and proportion of sales online, the
growth opportunity for overall sales is immense.
It will be interesting to compare the IMCR evolution in developed markets like the UK and
the emerging Asian retail markets.
Asian Initiatives – IMCR Evolution
Illustration from a leading department store chain with an online channel, compared to a pure
online fashion store in India
Multi-channel retail is still a relatively new phenomenon in Asia; there are no clear IMCR
numbers of any single retailer as yet. At this point in time, both the store and online retailers
seem to be emerging as independent models. There is no evidence of store retailers being
strong online or online retailers interested in store retailing. This makes it difficult to evaluate
the evolution and potential of IMCR in Asia. We therefore compare a retailer with store and
online channels, with one that only has an online presence. Relevant data of a leading
department store chain with credible online initiatives was compared with the data from a
market leading pure online fashion store, in India, in figure 2.
1. Online channel growth faster and bigger than store
MCR Proportion
Department Store Chain
Store
Footfalls - Mn
Visitors - Mn
ATS - INR
ATS - INR
2012
37
7
2300
1250
20
2013
41
11
2500
1600
100
Growth
1.11
1.57
1.09
1.28
5
13%
8200
685
8.4
22%
16%
2012
8730
877
10.04
26%
20%
2013*
9540
1122
11.76
31%
25%
The share of its IMCR has grown from 7% of its total sales to 20% in 2012 and is projected to
be 25% at the end of 2013, having grown at 27% every year since 2009. Boosting this trend
is the fact that ‘click and collect orders’ are becoming popular among consumers,
constituting nearly 26% of all online orders in 2012 and the number is expected to be 31%
for current year.
Visitors - Mn
Figure 2: A leading department store chain vs. a pure online fashion retailer in India
– IMCR evolution
Figure 1: A leading UK retail group’s IMCR evolution
The share of its online business has grown steadily from £393 million in 2009 to an
estimated £1,122 million in 2013, growing at a healthy 27%. Online business share as a
proportion of the group’s total sales is projected to be 11.76% at the end of 2013.
Online
Source: TCS Internal
Source: TCS Internal
11
Online
7%
2011
Pure Online Fashion Retailer
Stores
Takeaways:
?
The number of visitors for the online fashion retailer increased fivefold – from 20 million
to 100 million, between 2012 and 2013. In comparison, the footfalls and online visitors to
the department store chain only grew by 1.11 and 1.57 times respectively. This means
that department store chains can gain immensely if they focus on online customers, a
number growing faster than its own store traffic, to benchmark and reach the potential
numbers of an online fashion retailer.
?
The Average Transaction Size (ATS) for the department store chain grew by 9% only,
whereas for the pure online fashion retailer, it grew by an impressive 28% between 2012
and 2013. We can infer that consumers are increasingly shopping online and the
department store chain is not utilizing its full growth potential.
12
3. Potential loss of IMCR revenue in 2013 – illustration
2. Potential IMCR revenue proportion in 2013 – illustration
Department Store MCR Revenue Proportion – An Illustration
Department Store Chain – Potential Lost Revenue 2013 - Illustration
Store Visitors – Mn
41
Online Growth
Store Transactions Mn – 10%
4.1
Online Visitors – Mn
11
Online Transactions – 10% in Mn
1.1
Store ATS – INR
2,500
Online ATS – INR
1,600
27
Online Revenue – INR Mn
1,760
Online Visitors – Mn
11
Online Fashion Retailer Growth
Multi-channel Visitors – Mn
11
Potential Online Visitors (2012 to 2013 Growth) – Mn
35
MCR Transactions Mn – 10%
1.1
Potential Online Transaction – 10% in Mn
3.5
Store Revenue – INR Mn
10,250
Online /Store Visitors %
5
MCR ATS = Online Fashion Retailer ATS - INR
1,600
Potential Online ATS – INR
1,600
MCR Revenue – INR Mn
1,760
Potential Online Revenue – INR Mn
5,600
MCR/Total Revenue %
Potential Loss in Revenue – INR Mn
17
Source: TCS Internal
Assumptions:
(3,840)
Source: TCS Internal
Figure 4: Leading department store chain – IMCR revenue proportion
– Illustration – IMCR evolution
Figure 3: A leading department store chain – IMCR revenue proportion
– illustration - IMCR evolution
Takeaways:
?
Online visitors are a subset of store visitors and not unique visitors and hence IMCR
visitors = online visitors constituting 27% of store consumers. This conservative number
is in line with the Asian Hong Kong number of shoppers who shop in more than one
channel of 45% and thereby can be considered a safe assumption
?
We have seen in figure 2 that the online channel of the department store chain grew
faster than its own stores at 1.57 times versus 1.09 times. However, during the same
period the pure online fashion retailer had a fivefold higher growth rate. This potential
loss of revenue for the department store chain translates to INR 3,840 million
?
Number of transactions = number of conversions, for online as well as store have been
estimated at 10%, indicative of the store brand characteristic
?
This is based on a simple hypothesis and the actual numbers could be significantly
different from that in figure 4. The fact is that the trend noted here is true – that,
traditional store retailers, even with credible online initiatives, are still losing out on
potential revenues to pure online players
Takeaways:
13
1.57
?
For 2013, it is assumed that the number of online visitors for the department store chain
is equal to the total multi-channel visitors i.e. 11 million. We see that 10% of the total
multi-channel visitors have transacted at an ATS of INR 1,600, which is equal to that of
the pure online fashion retailer. We can compute the department store chain’s IMCR
revenue to be INR 1,760 million i.e. 17% of total store as sales from multi-channel
consumers
?
This number is interesting as it is potentially in line with the global benchmark number
of the UK retail group, while highlighting the potential of IMCR which probably lies
unutilized today, even by the department store chain in figure 3
14
3. Potential loss of IMCR revenue in 2013 – illustration
2. Potential IMCR revenue proportion in 2013 – illustration
Department Store MCR Revenue Proportion – An Illustration
Department Store Chain – Potential Lost Revenue 2013 - Illustration
Store Visitors – Mn
41
Online Growth
Store Transactions Mn – 10%
4.1
Online Visitors – Mn
11
Online Transactions – 10% in Mn
1.1
Store ATS – INR
2,500
Online ATS – INR
1,600
27
Online Revenue – INR Mn
1,760
Online Visitors – Mn
11
Online Fashion Retailer Growth
Multi-channel Visitors – Mn
11
Potential Online Visitors (2012 to 2013 Growth) – Mn
35
MCR Transactions Mn – 10%
1.1
Potential Online Transaction – 10% in Mn
3.5
Store Revenue – INR Mn
10,250
Online /Store Visitors %
5
MCR ATS = Online Fashion Retailer ATS - INR
1,600
Potential Online ATS – INR
1,600
MCR Revenue – INR Mn
1,760
Potential Online Revenue – INR Mn
5,600
MCR/Total Revenue %
Potential Loss in Revenue – INR Mn
17
Source: TCS Internal
Assumptions:
(3,840)
Source: TCS Internal
Figure 4: Leading department store chain – IMCR revenue proportion
– Illustration – IMCR evolution
Figure 3: A leading department store chain – IMCR revenue proportion
– illustration - IMCR evolution
Takeaways:
?
Online visitors are a subset of store visitors and not unique visitors and hence IMCR
visitors = online visitors constituting 27% of store consumers. This conservative number
is in line with the Asian Hong Kong number of shoppers who shop in more than one
channel of 45% and thereby can be considered a safe assumption
?
We have seen in figure 2 that the online channel of the department store chain grew
faster than its own stores at 1.57 times versus 1.09 times. However, during the same
period the pure online fashion retailer had a fivefold higher growth rate. This potential
loss of revenue for the department store chain translates to INR 3,840 million
?
Number of transactions = number of conversions, for online as well as store have been
estimated at 10%, indicative of the store brand characteristic
?
This is based on a simple hypothesis and the actual numbers could be significantly
different from that in figure 4. The fact is that the trend noted here is true – that,
traditional store retailers, even with credible online initiatives, are still losing out on
potential revenues to pure online players
Takeaways:
13
1.57
?
For 2013, it is assumed that the number of online visitors for the department store chain
is equal to the total multi-channel visitors i.e. 11 million. We see that 10% of the total
multi-channel visitors have transacted at an ATS of INR 1,600, which is equal to that of
the pure online fashion retailer. We can compute the department store chain’s IMCR
revenue to be INR 1,760 million i.e. 17% of total store as sales from multi-channel
consumers
?
This number is interesting as it is potentially in line with the global benchmark number
of the UK retail group, while highlighting the potential of IMCR which probably lies
unutilized today, even by the department store chain in figure 3
14
4. Online brand traffic for a department store is going to outpace its store traffic by 2018
Department Store Chain
Retail
Stores
Online
Footfalls - Mn
Visitors - Mn
37
7
2013
41
11
Growth
1.11
1.57
2014
45
17
Bisleri Shoppe – Retail Outlets
2015
50
27
2016
56
43
2017
62
67
2018 - Online Brand Traffic
69
105
In 2012, Bisleri International set up ‘Bisleri Shoppe’, an exclusive retail format to sell bottled
water. The company believes that the move will boost the brand visibility and counter
competition. Bisleri Shoppe, typically a 20 feet by 10 feet store, was to be set up with an
estimated investment of INR 0.3 Million per store. Post the review of the response to these
outlets, the company intended to work on deployment strategies to take the initiative
pan-India.
Figure 5: Store vs. online brand traffic – department store chain,
in 2018– IMCR evolution
Takeaways:
As figure 5 shows, the drivers for growth of future sales are the online channels, as per
global trends today. This is based on the number of visitors who will first visit the
department store chain’s website to evaluate and identify their purchases, before going
to the physical store
We can hence conclude that multi-channel retailing in India (and APAC) as a whole still has
some way to go. Though a few retailers have begun to realize and reap the benefits of online
sales as well as improved productivity from the multi-channel retailing model, such
examples are few and far between. This is especially highlighted by the fact that these
numbers are not available for most traditional retailers, even with those who have credible
online initiatives.
As consumers have already embraced multiple channels to complete the shopping
experience, it is time retailers took note of this behavior and gained from the operational
efficiencies.
15
We have seen retailers taking a cue from their global counterparts and experimenting with
multi-channel retailing and the growing potential of online retailing in India and in Asia
Pacific (APAC). FMCG players are also launching innovative multi-channel initiatives of their
own. We will provide a few examples, which will not only highlight the effectiveness of the
IMCR model but also highlight the importance of being available to the consumer anytime,
anywhere.
2012
Source: TCS Internal
?
Inspiration from Retailers –
FMCG Players innovating in Multi-Channel
Dabur establishes a Marketplace on Snapdeal.com
Dabur claims that they are the first FMCG in India to have their online portal
(www.daburuveda.com). In 2011, Dabur India established its online trading platform in
collaboration with the leading Indian e-commerce player snapdeal.com. It retailed 52
products across three categories of health foods, ayurveda and organic, and combination
packs. Customers could pay online or opt for cash on delivery via the trading portal.
Coca-Cola Online Goes Online and Mobile
On the web: Coca-Cola India recently piloted an online store in Ahmedabad (India) –
Coke2home.com – for home delivery of all its products in an attempt to tap the burgeoning
e-commerce market. This is a first-of-its-kind move by an FMCG company. The site offers
products such as energy drinks, juice drinks, mixers, soda, and packaged drinking water and
home delivery on orders above INR 300. The portal facilitates individual, bulk, and monthlybased orders.
There is a registration process on the site for regular orders, whereas for a bulk order, a form
has to be filled to connect with the company representative. We were not able to study the
service as it is available only in Ahmedabad. However, it appears that once a user places an
order, the company provides them with an order number that can be tracked on the
website. It claims that orders placed before 12 noon will be delivered the same day.
16
4. Online brand traffic for a department store is going to outpace its store traffic by 2018
Department Store Chain
Retail
Stores
Online
Footfalls - Mn
Visitors - Mn
37
7
2013
41
11
Growth
1.11
1.57
2014
45
17
Bisleri Shoppe – Retail Outlets
2015
50
27
2016
56
43
2017
62
67
2018 - Online Brand Traffic
69
105
In 2012, Bisleri International set up ‘Bisleri Shoppe’, an exclusive retail format to sell bottled
water. The company believes that the move will boost the brand visibility and counter
competition. Bisleri Shoppe, typically a 20 feet by 10 feet store, was to be set up with an
estimated investment of INR 0.3 Million per store. Post the review of the response to these
outlets, the company intended to work on deployment strategies to take the initiative
pan-India.
Figure 5: Store vs. online brand traffic – department store chain,
in 2018– IMCR evolution
Takeaways:
As figure 5 shows, the drivers for growth of future sales are the online channels, as per
global trends today. This is based on the number of visitors who will first visit the
department store chain’s website to evaluate and identify their purchases, before going
to the physical store
We can hence conclude that multi-channel retailing in India (and APAC) as a whole still has
some way to go. Though a few retailers have begun to realize and reap the benefits of online
sales as well as improved productivity from the multi-channel retailing model, such
examples are few and far between. This is especially highlighted by the fact that these
numbers are not available for most traditional retailers, even with those who have credible
online initiatives.
As consumers have already embraced multiple channels to complete the shopping
experience, it is time retailers took note of this behavior and gained from the operational
efficiencies.
15
We have seen retailers taking a cue from their global counterparts and experimenting with
multi-channel retailing and the growing potential of online retailing in India and in Asia
Pacific (APAC). FMCG players are also launching innovative multi-channel initiatives of their
own. We will provide a few examples, which will not only highlight the effectiveness of the
IMCR model but also highlight the importance of being available to the consumer anytime,
anywhere.
2012
Source: TCS Internal
?
Inspiration from Retailers –
FMCG Players innovating in Multi-Channel
Dabur establishes a Marketplace on Snapdeal.com
Dabur claims that they are the first FMCG in India to have their online portal
(www.daburuveda.com). In 2011, Dabur India established its online trading platform in
collaboration with the leading Indian e-commerce player snapdeal.com. It retailed 52
products across three categories of health foods, ayurveda and organic, and combination
packs. Customers could pay online or opt for cash on delivery via the trading portal.
Coca-Cola Online Goes Online and Mobile
On the web: Coca-Cola India recently piloted an online store in Ahmedabad (India) –
Coke2home.com – for home delivery of all its products in an attempt to tap the burgeoning
e-commerce market. This is a first-of-its-kind move by an FMCG company. The site offers
products such as energy drinks, juice drinks, mixers, soda, and packaged drinking water and
home delivery on orders above INR 300. The portal facilitates individual, bulk, and monthlybased orders.
There is a registration process on the site for regular orders, whereas for a bulk order, a form
has to be filled to connect with the company representative. We were not able to study the
service as it is available only in Ahmedabad. However, it appears that once a user places an
order, the company provides them with an order number that can be tracked on the
website. It claims that orders placed before 12 noon will be delivered the same day.
16
On mobile: Coca Cola also launched a mobile version of the site accessible at –
m.coke2home.com. The site provides a QR code, which once scanned, leads a user to the
mobile version of the site on their mobile browser.
Proctor and Gamble (P&G) Samples with Pampers Sales on Walmart.com
Multi-channel Value Chain –
Customer Buying and Consumption Journey
We are witnessing changes in consumers’ buying and consumption patterns. These changes
underscore the importance of a robust IMCR model. We will highlight two examples of how
organizations have adapted to meet the requirements of the multi-channel consumer, by
developing a flexible multi-channel value chain.
P&G tied-up with Walmart.com and offered to give away product samples with purchase of
any Pampers product. Consumers could choose to buy Pampers swaddlers, Pampers baby
dry, cruisers, or training pants from Walmart.com and the product samples would be
shipped for free on purchases over $45.
Coca-Cola India engagement across the Value Chain
Non-store ‘FMCG Retailer’ HomeShop18 opens a ‘Virtual’ Store in India
We have already seen the example of Coca-Cola India’s multi-channel retail initiative; now let
us look at the traditional FMCG value chain.
In 2012, Network18-owned Homeshop18 launched a virtual wall named ‘Scan N Shop’ at the
Terminal 3 (T3) domestic terminal of New Delhi’s-IGI Airport (IGIA). The virtual wall offered
consumers the ability to order by scanning the QR code displayed against each item or over
the phone at the call center. To do so, consumers had to download and install a QR code
scanner built-in within the Homeshop18’s iOS app on their phone. For Blackberry, the BBM
QR code scanner could be used. Once the scanner was installed on the phone, consumers
scanned the QR Code displayed against each product, and were shown product details on
the Homeshop18 mobile website through their mobile browser. Users then clicked on the
‘buy now’ link and followed the checkout process to complete the order.
Product
Idea
Product
Idea
Test
Market
Test
Market
Production
Production
Ahmedabad
Distribution
Retail
Distribution
Online
Consumer
Demand
Fulfilment
Sales &
Promotion
FMCG, Retailer
Sales &
Promotion
FMCG
Retailer
Consumer
Demand
Fulfilment
Home Delivery
Source: TCS Internal
Figure 6: Consumer touch-points impacting the FMCG value chain –
Coca-Cola India
Traditionally, an FMCG company did not connect with the end customer directly; it was the
retailer or distributor who did. We have seen this change with Coca-Cola’s online initiative
where an FMCG company distributes its products through its online channel and takes
responsibility for consumer demand fulfillment by direct home delivery, as shown in figure 6.
If this initiative is successful, it could become the template for FMCG companies to reach out
to the multi-channel consumer through any channel the consumer chooses to engage with.
Tesco – Wine Co-buy Concept – Retail IMCR
With Tesco launching a wine co-buy initiative recently, we take a look at the traditional retail
chain, where the customer is not directly linked to the buying activity – which is derived
purely from demand planning data of past behavior. Figure 7 shows the customer touch
points impacting the retail value chain.
Demand
Planning
Demand
Planning
Buying
Buying
Store, Online
Warehousing
Warehousing
Sales Channel
Distribution
Marketing &
Promotion
Sales &
Service
Store
Store
Store
Sales Channel
Distribution
Marketing &
Promotion
Sales &
Service
Store, Online
Store, Online
Store, Online
Source: TCS Internal
17
Figure 7: Consumer touch-points impacting the retail value chain - Tesco
18
On mobile: Coca Cola also launched a mobile version of the site accessible at –
m.coke2home.com. The site provides a QR code, which once scanned, leads a user to the
mobile version of the site on their mobile browser.
Proctor and Gamble (P&G) Samples with Pampers Sales on Walmart.com
Multi-channel Value Chain –
Customer Buying and Consumption Journey
We are witnessing changes in consumers’ buying and consumption patterns. These changes
underscore the importance of a robust IMCR model. We will highlight two examples of how
organizations have adapted to meet the requirements of the multi-channel consumer, by
developing a flexible multi-channel value chain.
P&G tied-up with Walmart.com and offered to give away product samples with purchase of
any Pampers product. Consumers could choose to buy Pampers swaddlers, Pampers baby
dry, cruisers, or training pants from Walmart.com and the product samples would be
shipped for free on purchases over $45.
Coca-Cola India engagement across the Value Chain
Non-store ‘FMCG Retailer’ HomeShop18 opens a ‘Virtual’ Store in India
We have already seen the example of Coca-Cola India’s multi-channel retail initiative; now let
us look at the traditional FMCG value chain.
In 2012, Network18-owned Homeshop18 launched a virtual wall named ‘Scan N Shop’ at the
Terminal 3 (T3) domestic terminal of New Delhi’s-IGI Airport (IGIA). The virtual wall offered
consumers the ability to order by scanning the QR code displayed against each item or over
the phone at the call center. To do so, consumers had to download and install a QR code
scanner built-in within the Homeshop18’s iOS app on their phone. For Blackberry, the BBM
QR code scanner could be used. Once the scanner was installed on the phone, consumers
scanned the QR Code displayed against each product, and were shown product details on
the Homeshop18 mobile website through their mobile browser. Users then clicked on the
‘buy now’ link and followed the checkout process to complete the order.
Product
Idea
Product
Idea
Test
Market
Test
Market
Production
Production
Ahmedabad
Distribution
Retail
Distribution
Online
Consumer
Demand
Fulfilment
Sales &
Promotion
FMCG, Retailer
Sales &
Promotion
FMCG
Retailer
Consumer
Demand
Fulfilment
Home Delivery
Source: TCS Internal
Figure 6: Consumer touch-points impacting the FMCG value chain –
Coca-Cola India
Traditionally, an FMCG company did not connect with the end customer directly; it was the
retailer or distributor who did. We have seen this change with Coca-Cola’s online initiative
where an FMCG company distributes its products through its online channel and takes
responsibility for consumer demand fulfillment by direct home delivery, as shown in figure 6.
If this initiative is successful, it could become the template for FMCG companies to reach out
to the multi-channel consumer through any channel the consumer chooses to engage with.
Tesco – Wine Co-buy Concept – Retail IMCR
With Tesco launching a wine co-buy initiative recently, we take a look at the traditional retail
chain, where the customer is not directly linked to the buying activity – which is derived
purely from demand planning data of past behavior. Figure 7 shows the customer touch
points impacting the retail value chain.
Demand
Planning
Demand
Planning
Buying
Buying
Store, Online
Warehousing
Warehousing
Sales Channel
Distribution
Marketing &
Promotion
Sales &
Service
Store
Store
Store
Sales Channel
Distribution
Marketing &
Promotion
Sales &
Service
Store, Online
Store, Online
Store, Online
Source: TCS Internal
17
Figure 7: Consumer touch-points impacting the retail value chain - Tesco
18
Tesco has partnered with ‘buyapowa’ to launch wine co-buys since May 2013. This is a groupbuying program, which enables people to refer friends to buy cases of wine at better prices.
The model relies on the power of people’s networks and Tesco’s commitment to deliver
genuine value.
Through the wine co-buys, Tesco is shifting some power to its customers, giving them more
control over the product pricing and a say in which products should be included in the next
co-buy. Tesco may be on a winning proposition given that online sale values are likely to be
high and customers are driving what they want to buy.
Multi-channel Customer Enablement and Regulatory Support –
Example of Jurisdiction
It is very important that in this multi-channel journey, customer interests are protected
through adequate government regulatory support, to minimize conflicts between the
stakeholders. Current regulations are not yet geared up to meet the requirements of this
emerging model.
There are many cases of consumer grievances relating to transactions on online retailer
websites and service delivery, which doesn’t match retailer promise. Consumer forums have
refused to admit these complaints, citing a lack of clarity on jurisdiction. The confusion then
arises as to where the complaint has to be booked – the retailer’s office address, the
warehouse address, or the customer’s address. One such prominent case is related to an
Indian online player – Timtara – where hundreds of complaints were registered with a
consumer forum called Akosha[1]. Most of the complaints were related to delivery failures
and refund order delays. In a multi-channel world, powered primarily by e-commerce and
mobile channels, similar customer issues will increase, if not addressed immediately.
The Indian government has taken initial steps to address this matter. They have tried to
balance the onus on both the company and the consumer when the legislature drafted the
jurisdiction clause in the Consumer Protection Act. It would be impractical for a company to
represent itself everywhere – thereby justifying the customer having to file the complaint in
the place where the company conducts its business. According to Akosha, the Consumer
Protection Amendment Bill could have proposed an amendment to Section 11 of the Act
that deals with jurisdiction and would have incorporated a separate jurisdiction clause
directed at the e-commerce sector. Such a clause would have clearly laid down that in ecommerce cases, a complaint should be filed where the cause of action arises, irrespective of
the company’s physical location. This could have been a perfect, even though overly
legislative, redressal of an issue that is already a major problem for consumers making online
purchases. Another way out could be to have the National Consumer Disputes Redressal
Commission lay down clear directives in this regard, clarifying that ‘cause of action’ be given
precedence when dealing with jurisdiction issues specific to e-commerce complaints.
Using Consumer Shopper Insights, managing Channel Conflict and enabling
Organizational Structures for Integrated Multichannel Retailingy
We had detailed interactions with Kurush Grant, Chairman, ITC Limited (a leading Indian
FMCG company). Here are the highlights of the key organizational imperatives for shaping
the contours of a robust IMCR roadmap. These have been synchronized with our approach in
the following section:
A. Shopper Insight: Consumers want more
How IMCR can leverage this Insight
Consumers want to research a product or
service and buy from a channel with the best
perceived benefit
Decision making and purchase behavior
demonstrated are different and hence role of each
channel can be defined to deliver an 'integrated
buying experience'
Consumers expect to see consistent product
range, promotions, and customer service across
channels
?
?
An integrated 'channel assortment strategy'
must be defined to set consumer expectation
Out of Stock (OOS) leads to channel dissonance
Consumers want a personalized shopping
experience
An integrated back end data management system
to capture 'trending purchase behavior' across
channels to generate shopper analytics
Consumers expect to participate in designing
and marketing of products or services
A 'three way communication' between consumers,
retailers, and marketers must be established
Consumers seek convenience on repetitive
purchases
An integrated system which captures the history
of all purchases for ease of re-use (e.g. while
purchasing e-tickets, most airlines prompt the
passenger details stored in their memory thus
reducing the purchase cycle time)
B. Channels operating in Silos
How IMCR can leverage this Insight
A new channel is often seen as competition to
existing channels leading to cannibalization
Short term channel conflict will continue to play till
such time retailers identify 'new hook' for
consumers outside of price discounting (Q Ratio[2])
Organizations have a separate metric of
evaluating each channel
An 'integrated channel Profit and Loss (P&L)' must
be created
May lead to complexity or increase in cost if
processes are not synchronized
Investment in technology to ensure 'no overlap of
processes' between channels
Conflict in retailing with the increased presence
of cash and carry
A segmented approach of partnership can be
driven for:
? Distribution: By geography, identified portfolio
? In-store sales: Targeting individual shoppers
? Targeting new channels: Institutions
This example illustrates how many similar initiatives need to be taken at national level and
old consumer protection norms need to be reviewed to enable this multi-channel retail
business model to succeed.
19
[1] Akosha.com is an online consumer complaints forum, founded by Ankur Singla, in India
[2] It is the ratio of a company’s market cap to value of its tangible asset. If > 1, it means that markets believe that part of
company’s value comes from its non-tangible assets such as brand equity, differentiation, innovation, customer
experience, market dominance, customer loyalty and skillful execution. International retailers are regularly
20
Tesco has partnered with ‘buyapowa’ to launch wine co-buys since May 2013. This is a groupbuying program, which enables people to refer friends to buy cases of wine at better prices.
The model relies on the power of people’s networks and Tesco’s commitment to deliver
genuine value.
Through the wine co-buys, Tesco is shifting some power to its customers, giving them more
control over the product pricing and a say in which products should be included in the next
co-buy. Tesco may be on a winning proposition given that online sale values are likely to be
high and customers are driving what they want to buy.
Multi-channel Customer Enablement and Regulatory Support –
Example of Jurisdiction
It is very important that in this multi-channel journey, customer interests are protected
through adequate government regulatory support, to minimize conflicts between the
stakeholders. Current regulations are not yet geared up to meet the requirements of this
emerging model.
There are many cases of consumer grievances relating to transactions on online retailer
websites and service delivery, which doesn’t match retailer promise. Consumer forums have
refused to admit these complaints, citing a lack of clarity on jurisdiction. The confusion then
arises as to where the complaint has to be booked – the retailer’s office address, the
warehouse address, or the customer’s address. One such prominent case is related to an
Indian online player – Timtara – where hundreds of complaints were registered with a
consumer forum called Akosha[1]. Most of the complaints were related to delivery failures
and refund order delays. In a multi-channel world, powered primarily by e-commerce and
mobile channels, similar customer issues will increase, if not addressed immediately.
The Indian government has taken initial steps to address this matter. They have tried to
balance the onus on both the company and the consumer when the legislature drafted the
jurisdiction clause in the Consumer Protection Act. It would be impractical for a company to
represent itself everywhere – thereby justifying the customer having to file the complaint in
the place where the company conducts its business. According to Akosha, the Consumer
Protection Amendment Bill could have proposed an amendment to Section 11 of the Act
that deals with jurisdiction and would have incorporated a separate jurisdiction clause
directed at the e-commerce sector. Such a clause would have clearly laid down that in ecommerce cases, a complaint should be filed where the cause of action arises, irrespective of
the company’s physical location. This could have been a perfect, even though overly
legislative, redressal of an issue that is already a major problem for consumers making online
purchases. Another way out could be to have the National Consumer Disputes Redressal
Commission lay down clear directives in this regard, clarifying that ‘cause of action’ be given
precedence when dealing with jurisdiction issues specific to e-commerce complaints.
Using Consumer Shopper Insights, managing Channel Conflict and enabling
Organizational Structures for Integrated Multichannel Retailingy
We had detailed interactions with Kurush Grant, Chairman, ITC Limited (a leading Indian
FMCG company). Here are the highlights of the key organizational imperatives for shaping
the contours of a robust IMCR roadmap. These have been synchronized with our approach in
the following section:
A. Shopper Insight: Consumers want more
How IMCR can leverage this Insight
Consumers want to research a product or
service and buy from a channel with the best
perceived benefit
Decision making and purchase behavior
demonstrated are different and hence role of each
channel can be defined to deliver an 'integrated
buying experience'
Consumers expect to see consistent product
range, promotions, and customer service across
channels
?
?
An integrated 'channel assortment strategy'
must be defined to set consumer expectation
Out of Stock (OOS) leads to channel dissonance
Consumers want a personalized shopping
experience
An integrated back end data management system
to capture 'trending purchase behavior' across
channels to generate shopper analytics
Consumers expect to participate in designing
and marketing of products or services
A 'three way communication' between consumers,
retailers, and marketers must be established
Consumers seek convenience on repetitive
purchases
An integrated system which captures the history
of all purchases for ease of re-use (e.g. while
purchasing e-tickets, most airlines prompt the
passenger details stored in their memory thus
reducing the purchase cycle time)
B. Channels operating in Silos
How IMCR can leverage this Insight
A new channel is often seen as competition to
existing channels leading to cannibalization
Short term channel conflict will continue to play till
such time retailers identify 'new hook' for
consumers outside of price discounting (Q Ratio[2])
Organizations have a separate metric of
evaluating each channel
An 'integrated channel Profit and Loss (P&L)' must
be created
May lead to complexity or increase in cost if
processes are not synchronized
Investment in technology to ensure 'no overlap of
processes' between channels
Conflict in retailing with the increased presence
of cash and carry
A segmented approach of partnership can be
driven for:
? Distribution: By geography, identified portfolio
? In-store sales: Targeting individual shoppers
? Targeting new channels: Institutions
This example illustrates how many similar initiatives need to be taken at national level and
old consumer protection norms need to be reviewed to enable this multi-channel retail
business model to succeed.
19
[1] Akosha.com is an online consumer complaints forum, founded by Ankur Singla, in India
[2] It is the ratio of a company’s market cap to value of its tangible asset. If > 1, it means that markets believe that part of
company’s value comes from its non-tangible assets such as brand equity, differentiation, innovation, customer
experience, market dominance, customer loyalty and skillful execution. International retailers are regularly
20
C. Organizational Structures and Processes
Creating common goals (no individual channel
goals must be set)
Diminishing role of 'sales push' with
'replenishment' and 'rate of sell out' being
driven by marketing and automated or
integrated supply chain systems
How IMCR can leverage this Insight
?
Head of a channel must 'create and integrate'
all channel strategies to deliver a 'common
goal'
?
With technology investment across channels,
stock loading through sell-in will be replaced
by 'replenishment' orders
Need to impact rate of sell out (and in turn
stock loading) will determine organization's
structures
Vendor managed inventory (VMI) will play a
significant role
?
?
We have examined the positive results of multi-channel retailing; now let us take a look at
the basic building blocks of this model. We have mapped the multi-channel consumer
buying patterns and observed that they have become increasingly channel agnostic. This
makes it vital that retailers reach out to customers wherever they are - stores, mobiles,
Internet, TV, phones, airports, magazines, or their homes. The only viable way to achieve this
is by adopting the integrated multi-channel retailing model.
Approach for Integrated Multi-Channel Retailing
There are some key questions that crop up when companies look to reorient their business
model to become a truly integrated multi-channel retail organization. These questions
include:
?
Where do we begin our multi-channel journey?
?
What are the resources needed to undertake multi-channel initiatives?
?
How do we assimilate our multi-channel initiatives?
?
How do we measure effectiveness of our efforts?
?
How do we sustain the benefits that we may accrue?
In our view, the retailers must adopt a holistic approach encompassing the following
aspects, which need to be aligned with each other to maximize multi-channel presence:
I
Defining operating strategy and model: leading to right governance and cross channel
collaboration
1. Business and channel strategy
2. Assortment strategy
3. Organization structure, KPIs
II
Shaping customer experience: leading to seamless shopping behavior across channels
4. Pricing
5. Service
6. Customer order fulfilment
III Deploying processes and systems: leading to one view of the customer, inventory and
orders across channels
Defining
Operating
Strategy &
Model
Shaping
Customer
Experience
Deploying
Processes &
Systems
Figure 8: Approach for integrated market retailing
21
22
C. Organizational Structures and Processes
Creating common goals (no individual channel
goals must be set)
Diminishing role of 'sales push' with
'replenishment' and 'rate of sell out' being
driven by marketing and automated or
integrated supply chain systems
How IMCR can leverage this Insight
?
Head of a channel must 'create and integrate'
all channel strategies to deliver a 'common
goal'
?
With technology investment across channels,
stock loading through sell-in will be replaced
by 'replenishment' orders
Need to impact rate of sell out (and in turn
stock loading) will determine organization's
structures
Vendor managed inventory (VMI) will play a
significant role
?
?
We have examined the positive results of multi-channel retailing; now let us take a look at
the basic building blocks of this model. We have mapped the multi-channel consumer
buying patterns and observed that they have become increasingly channel agnostic. This
makes it vital that retailers reach out to customers wherever they are - stores, mobiles,
Internet, TV, phones, airports, magazines, or their homes. The only viable way to achieve this
is by adopting the integrated multi-channel retailing model.
Approach for Integrated Multi-Channel Retailing
There are some key questions that crop up when companies look to reorient their business
model to become a truly integrated multi-channel retail organization. These questions
include:
?
Where do we begin our multi-channel journey?
?
What are the resources needed to undertake multi-channel initiatives?
?
How do we assimilate our multi-channel initiatives?
?
How do we measure effectiveness of our efforts?
?
How do we sustain the benefits that we may accrue?
In our view, the retailers must adopt a holistic approach encompassing the following
aspects, which need to be aligned with each other to maximize multi-channel presence:
I
Defining operating strategy and model: leading to right governance and cross channel
collaboration
1. Business and channel strategy
2. Assortment strategy
3. Organization structure, KPIs
II
Shaping customer experience: leading to seamless shopping behavior across channels
4. Pricing
5. Service
6. Customer order fulfilment
III Deploying processes and systems: leading to one view of the customer, inventory and
orders across channels
Defining
Operating
Strategy &
Model
Shaping
Customer
Experience
Deploying
Processes &
Systems
Figure 8: Approach for integrated market retailing
21
22
The following section covers the key initiatives and best practices, and proposes a pragmatic
roadmap of attaining the integrated state.
Initiatives, Roadmap, and Best Practices for Integrated
Multi-channel Retailing
I
Defining Operating Strategy and Model
2. Assortment strategy
1. Operating strategy and multi-channel model
Retailers tend to look at their channels in isolation when they are drawing up their longterm or medium term business strategies. They tend to draw up different strategies for the
store, online, catalog, and mobile channels. Often, these strategies are not in line with the
individual objectives and the resulting multi-channel model is unable to achieve sales
impact, improve operational efficiencies, and enhance customer experience.
For example, the objective of a multi-channel model is to increase a retailer’s sales, yet the
store rollout plan gets 100 stores, while critical functionalities such as Buy Online, Pick InStore (BOPIS) are not enabled on the e-commerce platform. A single cohesive business
strategy that encompasses all the channels and draws up a suitable multi-channel model to
meet the strategic objectives has to be developed.
Additionally, companies need to identify key objectives for pursuing an integrated multichannel retail model and strategic elements that drive the organization. Once a retailer has
identified one (or more) of these strategies, the next step is to shape the multi-channel
model – spanning the multi-channel environment the retailer operates in. Here are a few
illustrations that highlight the approach and provide a glimpse of how this activity needs to
be taken at an organizational level. Typically, there are four broad areas of strategic intent
that can be identified for the IMCR approach:
1.
23
both the store and online channels. Alternatively, an organization could have two separate
category managers for store and online, and store operations (on the floor) decides to ‘price
match’ the online store pricing using a store manager discount option in the POS system.
How does an organization decide which option to adopt? The retailer needs to address all the
multi-channel model elements comprehensively to become a multi-channel organization
across all markets, not limited by geography – for example, Tesco and Sears.
?
Determine assortment roles – Convenient, sporadic, regular, exclusive
?
Determine assortment plans– Sales driver, buzz creator, competition match, margin
driver
Following this, the assortment processes – procurement, distribution, marketing, and
customer order fulfillment – are then synchronized with this framework and enabled out at
a channel level. Pricing and profitability variables are relatively simple linear computations,
while allocations and transfers depend upon the importance quotient of the stores for
selling a particular product, as shown in figure 9.
Assortment Roles
Convenient
Sporadic
Regular
Product 1
#
Product 2
#
Product 3
#
Product 4
#
Product 5
Exclusive
#
Business Strategy
Multi-channel Model
Establish a new
'sales post'
Establish a digital channel as an extension of the store.
Online, catalog, and mobile customer orders to be
fulfilled from the nearest physical store
Tesco
JC Penney
Figure 9: Assortment Roles
Macy's
There is a need to introduce a third pillar in shaping the assortment strategy. This includes
the ‘multiple channels’ that a retailer operates in today and factors in the ones they plan to
operate in the future.
2.
Capture customer's
'share of wallet'
profitably
Re-visit existing store sizes on locations, in lieu of new
digital channels, and increase transactions from
expensive stores to cheap online channels
3.
Optimized customer
order fulfillment
Establish regional stores only, which will act as
regional retail brand hubs. All channel orders to be
fulfilled by regional stores
4.
Improved 'customer
experience'
One unique ID of the customer, single product pricing,
and integrated customer service – across all channels
for seamless brand experience
Best Practices
Deciding the retail assortment for a standalone channel – be it a physical store or online or
mobile – the typical assortment planning activity needs to be carried out on two broad
pillars of assortment strategy:
Assortment Plans
Sales Driver
Buzz Creator
Competition
Match
Margin Driver
Source: TCS Internal
Best Buy
This illustration highlights one scenario against each of the four strategy objectives. However,
it will become more complex when the retailer has multiple strategies and multiple tactical
options available to achieve the same model. For example, single product pricing could be
achieved through having a common item master and a single category manager managing
?
Channels – Store, online, mobile, catalog (taking the four main ones)
24
The following section covers the key initiatives and best practices, and proposes a pragmatic
roadmap of attaining the integrated state.
Initiatives, Roadmap, and Best Practices for Integrated
Multi-channel Retailing
I
Defining Operating Strategy and Model
2. Assortment strategy
1. Operating strategy and multi-channel model
Retailers tend to look at their channels in isolation when they are drawing up their longterm or medium term business strategies. They tend to draw up different strategies for the
store, online, catalog, and mobile channels. Often, these strategies are not in line with the
individual objectives and the resulting multi-channel model is unable to achieve sales
impact, improve operational efficiencies, and enhance customer experience.
For example, the objective of a multi-channel model is to increase a retailer’s sales, yet the
store rollout plan gets 100 stores, while critical functionalities such as Buy Online, Pick InStore (BOPIS) are not enabled on the e-commerce platform. A single cohesive business
strategy that encompasses all the channels and draws up a suitable multi-channel model to
meet the strategic objectives has to be developed.
Additionally, companies need to identify key objectives for pursuing an integrated multichannel retail model and strategic elements that drive the organization. Once a retailer has
identified one (or more) of these strategies, the next step is to shape the multi-channel
model – spanning the multi-channel environment the retailer operates in. Here are a few
illustrations that highlight the approach and provide a glimpse of how this activity needs to
be taken at an organizational level. Typically, there are four broad areas of strategic intent
that can be identified for the IMCR approach:
1.
23
both the store and online channels. Alternatively, an organization could have two separate
category managers for store and online, and store operations (on the floor) decides to ‘price
match’ the online store pricing using a store manager discount option in the POS system.
How does an organization decide which option to adopt? The retailer needs to address all the
multi-channel model elements comprehensively to become a multi-channel organization
across all markets, not limited by geography – for example, Tesco and Sears.
?
Determine assortment roles – Convenient, sporadic, regular, exclusive
?
Determine assortment plans– Sales driver, buzz creator, competition match, margin
driver
Following this, the assortment processes – procurement, distribution, marketing, and
customer order fulfillment – are then synchronized with this framework and enabled out at
a channel level. Pricing and profitability variables are relatively simple linear computations,
while allocations and transfers depend upon the importance quotient of the stores for
selling a particular product, as shown in figure 9.
Assortment Roles
Convenient
Sporadic
Regular
Product 1
#
Product 2
#
Product 3
#
Product 4
#
Product 5
Exclusive
#
Business Strategy
Multi-channel Model
Establish a new
'sales post'
Establish a digital channel as an extension of the store.
Online, catalog, and mobile customer orders to be
fulfilled from the nearest physical store
Tesco
JC Penney
Figure 9: Assortment Roles
Macy's
There is a need to introduce a third pillar in shaping the assortment strategy. This includes
the ‘multiple channels’ that a retailer operates in today and factors in the ones they plan to
operate in the future.
2.
Capture customer's
'share of wallet'
profitably
Re-visit existing store sizes on locations, in lieu of new
digital channels, and increase transactions from
expensive stores to cheap online channels
3.
Optimized customer
order fulfillment
Establish regional stores only, which will act as
regional retail brand hubs. All channel orders to be
fulfilled by regional stores
4.
Improved 'customer
experience'
One unique ID of the customer, single product pricing,
and integrated customer service – across all channels
for seamless brand experience
Best Practices
Deciding the retail assortment for a standalone channel – be it a physical store or online or
mobile – the typical assortment planning activity needs to be carried out on two broad
pillars of assortment strategy:
Assortment Plans
Sales Driver
Buzz Creator
Competition
Match
Margin Driver
Source: TCS Internal
Best Buy
This illustration highlights one scenario against each of the four strategy objectives. However,
it will become more complex when the retailer has multiple strategies and multiple tactical
options available to achieve the same model. For example, single product pricing could be
achieved through having a common item master and a single category manager managing
?
Channels – Store, online, mobile, catalog (taking the four main ones)
24
As a result of this addition, IMCR assortment strategy actually now needs to work in three
dimensions: roles, plans, and channels, as shown in figure 10.
Assortment Roles
Sporadic
Convenient
Regular
Exclusive
Channel
#
Store,
Catalog
Product 1
Product 2
Online,
Mobile
#
Product 3
Product 4
Product 5
#
Online,
Mobile
#
Online,
Mobile
Store,
Online,
Mobile,
Catalog
#
Assortment Plans
Competition
Match
Buzz
Creator
Sales Driver
Margin
Driver
Channel
After this is done, the assortment processes – procurement, distribution, marketing, and
customer order fulfillment, need to be realigned with the channel’s characteristic processes
and designated channel roles.
Pricing and profitability variables are now multi-linear computations since different channels
have different cost and service structures and yet the organization, must come up with a
consistent pricing across all channels. Allocations and transfers will need to be devised
depending upon the ‘affinity’ quotient of a ‘channel’ for selling a particular product.
The dynamics of an IMCR environment mandates that retailers need to move towards an
integrated continuous assortment planning approach. The integrated multi-channel
assortment plan must take in account the demands of all channels as an aggregate and
provide the correct allocation to each selling medium.
One of the main challenges in achieving this is the ability to accurately estimate demand in
each channel. Retailers find it difficult to keep up with the latest customer requirements,
irrespective of the channels they shop in. Retailers need to get an insight into which products
are the most and least successful, in the assortment mix that they have chosen for a
particular period. They need to develop an organization-wide quick response time for
changing trends and customer expectations, as mastered by Zara.
Source: TCS Internal
3. Organization Structure, KPIs
Figure 10: Assortment Roles with Channel Mix
To further refine the assortment plan, each channel will play a unique role in delivering the
strategy:
?
Channel role – Aggregate (all products), select (fast selling items), complement
(attachments and accessories), and differentiate (limited items)
An approach towards IMCR assortment strategy is highlighted in figure 11.
Assortment
Roles
Convenient
Sporadic
Regular
Product 1
#
Product 2
#
Product 3
#
Product 4
Product 5
Assortment
Plans
Exclusive
#
#
Sales
Driver
Buzz
Creator
Competition
Match
Margin
Driver
Channel
Channel Role
Store
Differentiate
Catalog
Complement
Online
Differentiate
Mobile
Differentiate
Online
Aggregate
Mobile
Select
Online
Aggregate
Mobile
Select
Store
Aggregate
Online
Aggregate
Mobile
Complement
Catalog
Complement
Channel
Channel Role
A multi-channel retailer can align the organizational structure in two ways:
?
A fully coordinated organization with a single P&L and joint decision-making that
optimizes total firm profits
?
A decentralized structure in which each channel has a separate P&L. Decisions for each
channel may be taken within the channel itself or there could be limited inter-channel
decision-making during the annual planning exercise
At the early stage of e-commerce development, some retailers intentionally gave a great
deal of independence to their online channel to attract executive talent and to encourage its
growth. For example, even though Walmart is known for its centralized organizational
structure, Walmart.com was established as a subsidiary with a fresh management team and
chose to locate its headquarters near Silicon Valley rather than at Bentonville, Arkansas.
Consistency across channels in terms of merchandising, service, and promotion — remains a
challenge for most retailers. In brick and mortar stores, the most well accepted performance
metrics are same-store sales, sales, and gross margin per square foot (GMROF). However,
these metrics do not apply to the online or mobile channels. A multi-channel retailer needs
to determine how to measure the impact of marketing actions in one channel on consumer
awareness, brand preference, sales, profit, and customer satisfaction in the retailer’s other
channels.
Most retailers manage their channels in a decentralized fashion (as shown in figure 12) and
maintain separate teams of inventory management, merchandising, marketing, finance,
analytics, and product development within each channel. Generally, the head of online
Source: TCS Internal
25
Figure 11: Assortment Roles with channel mix and specific channel roles
26
As a result of this addition, IMCR assortment strategy actually now needs to work in three
dimensions: roles, plans, and channels, as shown in figure 10.
Assortment Roles
Sporadic
Convenient
Regular
Exclusive
Channel
#
Store,
Catalog
Product 1
Product 2
Online,
Mobile
#
Product 3
Product 4
Product 5
#
Online,
Mobile
#
Online,
Mobile
Store,
Online,
Mobile,
Catalog
#
Assortment Plans
Competition
Match
Buzz
Creator
Sales Driver
Margin
Driver
Channel
After this is done, the assortment processes – procurement, distribution, marketing, and
customer order fulfillment, need to be realigned with the channel’s characteristic processes
and designated channel roles.
Pricing and profitability variables are now multi-linear computations since different channels
have different cost and service structures and yet the organization, must come up with a
consistent pricing across all channels. Allocations and transfers will need to be devised
depending upon the ‘affinity’ quotient of a ‘channel’ for selling a particular product.
The dynamics of an IMCR environment mandates that retailers need to move towards an
integrated continuous assortment planning approach. The integrated multi-channel
assortment plan must take in account the demands of all channels as an aggregate and
provide the correct allocation to each selling medium.
One of the main challenges in achieving this is the ability to accurately estimate demand in
each channel. Retailers find it difficult to keep up with the latest customer requirements,
irrespective of the channels they shop in. Retailers need to get an insight into which products
are the most and least successful, in the assortment mix that they have chosen for a
particular period. They need to develop an organization-wide quick response time for
changing trends and customer expectations, as mastered by Zara.
Source: TCS Internal
3. Organization Structure, KPIs
Figure 10: Assortment Roles with Channel Mix
To further refine the assortment plan, each channel will play a unique role in delivering the
strategy:
?
Channel role – Aggregate (all products), select (fast selling items), complement
(attachments and accessories), and differentiate (limited items)
An approach towards IMCR assortment strategy is highlighted in figure 11.
Assortment
Roles
Convenient
Sporadic
Regular
Product 1
#
Product 2
#
Product 3
#
Product 4
Product 5
Assortment
Plans
Exclusive
#
#
Sales
Driver
Buzz
Creator
Competition
Match
Margin
Driver
Channel
Channel Role
Store
Differentiate
Catalog
Complement
Online
Differentiate
Mobile
Differentiate
Online
Aggregate
Mobile
Select
Online
Aggregate
Mobile
Select
Store
Aggregate
Online
Aggregate
Mobile
Complement
Catalog
Complement
Channel
Channel Role
A multi-channel retailer can align the organizational structure in two ways:
?
A fully coordinated organization with a single P&L and joint decision-making that
optimizes total firm profits
?
A decentralized structure in which each channel has a separate P&L. Decisions for each
channel may be taken within the channel itself or there could be limited inter-channel
decision-making during the annual planning exercise
At the early stage of e-commerce development, some retailers intentionally gave a great
deal of independence to their online channel to attract executive talent and to encourage its
growth. For example, even though Walmart is known for its centralized organizational
structure, Walmart.com was established as a subsidiary with a fresh management team and
chose to locate its headquarters near Silicon Valley rather than at Bentonville, Arkansas.
Consistency across channels in terms of merchandising, service, and promotion — remains a
challenge for most retailers. In brick and mortar stores, the most well accepted performance
metrics are same-store sales, sales, and gross margin per square foot (GMROF). However,
these metrics do not apply to the online or mobile channels. A multi-channel retailer needs
to determine how to measure the impact of marketing actions in one channel on consumer
awareness, brand preference, sales, profit, and customer satisfaction in the retailer’s other
channels.
Most retailers manage their channels in a decentralized fashion (as shown in figure 12) and
maintain separate teams of inventory management, merchandising, marketing, finance,
analytics, and product development within each channel. Generally, the head of online
Source: TCS Internal
25
Figure 11: Assortment Roles with channel mix and specific channel roles
26
channels reported directly to the CEO of the company. Such retailers have seen tremendous
growth and profitable returns initially. However, if we look at a longer time horizon, the
decentralized structure has caused issues such as:
?
Inefficiency of business processes due to the creation of duplicate teams
?
Internal conflicts across channels
?
Inconsistent customer experiences due to lack of coordination in merchandising activities
across channels
CEO
CFO
COO
Marketing
Merchandising
Control
Human
Resources
Head-Online
Merchandising
Marketing
Product
Management
Systems
Fulfillment
Source: TCS Internal
Figure 12: Decentralized Organization Structure
If the online channel brings additional sales to stores, how should it be given the credit as
the additional sales do not reflect in their accounting books? How can retailers reward store
staff who do an excellent job cross-selling merchandise that are only available online? How
can they motivate store staff to provide flawless service to customers who come to stores to
pick their online orders or to return merchandise bought online? Retailers need to answer
these questions and design an effective compensation system to minimize conflicts and
encourage and reward collaboration across channels. Here are some recommendations:
1. Create a structure with single P&L: An IMCR needs to integrate the organization
structure so that channels do not operate in silos. This will provide an integrated
approach to decision-making in marketing, merchandising, inventory management and
visual merchandising.
This will also enable multi-channel retailers to create cross-channel synergies and
seamless customer experience. Other advantages of an integrated structure are that a
capability or asset from one channel is systematically available to the other channels,
and that the overall resources devoted by the enterprise to similar activities can be
appropriately adjusted. For example, if the online channel can drive store traffic, then
the mass media budget of the retailer could be reduced or redirected elsewhere.
27
2. Assign clear executive leadership: IMCR should assign senior management to oversee the
coordination of all channels and ensure that multi-channel initiatives remain a priority. At
US-based outdoor gear and apparel retailer, Recreational Equipment Inc. (REI), this position
is held by the CEO and at Circuit City, there is a dedicated position created for this role.
As a pre-requisite, executives heading the functions need not be just retailers but also
have a sound strategic vision and experience of e-commerce to know how to operate in
a multi-channel environment. For example, the CMO needs to be fluent in traditional
marketing areas - mass media (radio, TV, newspapers); direct marketing (marketing
databases, control groups, testing, ROI, modelling) and newer areas like e-commerce
(SEO, navigation, e-mail, opt in/opt out, privacy) and social media (Facebook, Twitter).
This will enable the Marketing function to develop a 360-degree view of the customer
and respond to their needs and channel preferences.
3. Provide incentives for cross: channel collaboration - Unlike in physical retail stores,
marketers in online retail have the ability to measure and track almost every customer
interaction. Retailers need to shift their focus to total product and category sales across
all channels. Category gross margin is the number that needs to grow and is a good
indicator of whether or not the channels are working effectively together to drive sales.
An integrated organization structure may create synergies of sharing overall resources;
however, only a few executives would relinquish control of critical resources like advertising
budgets in the belief that the alternative online or mobile marketing will drive store traffic
and sales.
Additionally, if we consider the research shopper phenomenon, one channel may function
mostly as an information source for customers, while another channel may serve as the
transaction channel. In that case, it is very difficult to determine which channel manager
should be rewarded for a sale.
REI’s efforts to build a multi-channel culture are best practices for other firms to adopt. The
retailer developed a focus on the customer, that cuts across channels — with a combination
of organizational restructuring, new incentives, training, and flexibility to enable the success
of the model, detailed in figure 13.
CEO
SVP, Marketing &
Merchandising
Merchandising
Private
Lable
Marketing
Online
Public affairs
SVP, Sales, Store
Development and Logistics
CFO
Finance
Store
IS
Logistics
Call center
Source: Forrester Research
Figure 13: Organization Structure at REI Outdoor apparel: for multi-channel success
Macy’s, on the other hand, introduced incentives for sales staff to fulfill needs regardless of
channel in its initiative called Magic Selling.
28
channels reported directly to the CEO of the company. Such retailers have seen tremendous
growth and profitable returns initially. However, if we look at a longer time horizon, the
decentralized structure has caused issues such as:
?
Inefficiency of business processes due to the creation of duplicate teams
?
Internal conflicts across channels
?
Inconsistent customer experiences due to lack of coordination in merchandising activities
across channels
CEO
CFO
COO
Marketing
Merchandising
Control
Human
Resources
Head-Online
Merchandising
Marketing
Product
Management
Systems
Fulfillment
Source: TCS Internal
Figure 12: Decentralized Organization Structure
If the online channel brings additional sales to stores, how should it be given the credit as
the additional sales do not reflect in their accounting books? How can retailers reward store
staff who do an excellent job cross-selling merchandise that are only available online? How
can they motivate store staff to provide flawless service to customers who come to stores to
pick their online orders or to return merchandise bought online? Retailers need to answer
these questions and design an effective compensation system to minimize conflicts and
encourage and reward collaboration across channels. Here are some recommendations:
1. Create a structure with single P&L: An IMCR needs to integrate the organization
structure so that channels do not operate in silos. This will provide an integrated
approach to decision-making in marketing, merchandising, inventory management and
visual merchandising.
This will also enable multi-channel retailers to create cross-channel synergies and
seamless customer experience. Other advantages of an integrated structure are that a
capability or asset from one channel is systematically available to the other channels,
and that the overall resources devoted by the enterprise to similar activities can be
appropriately adjusted. For example, if the online channel can drive store traffic, then
the mass media budget of the retailer could be reduced or redirected elsewhere.
27
2. Assign clear executive leadership: IMCR should assign senior management to oversee the
coordination of all channels and ensure that multi-channel initiatives remain a priority. At
US-based outdoor gear and apparel retailer, Recreational Equipment Inc. (REI), this position
is held by the CEO and at Circuit City, there is a dedicated position created for this role.
As a pre-requisite, executives heading the functions need not be just retailers but also
have a sound strategic vision and experience of e-commerce to know how to operate in
a multi-channel environment. For example, the CMO needs to be fluent in traditional
marketing areas - mass media (radio, TV, newspapers); direct marketing (marketing
databases, control groups, testing, ROI, modelling) and newer areas like e-commerce
(SEO, navigation, e-mail, opt in/opt out, privacy) and social media (Facebook, Twitter).
This will enable the Marketing function to develop a 360-degree view of the customer
and respond to their needs and channel preferences.
3. Provide incentives for cross: channel collaboration - Unlike in physical retail stores,
marketers in online retail have the ability to measure and track almost every customer
interaction. Retailers need to shift their focus to total product and category sales across
all channels. Category gross margin is the number that needs to grow and is a good
indicator of whether or not the channels are working effectively together to drive sales.
An integrated organization structure may create synergies of sharing overall resources;
however, only a few executives would relinquish control of critical resources like advertising
budgets in the belief that the alternative online or mobile marketing will drive store traffic
and sales.
Additionally, if we consider the research shopper phenomenon, one channel may function
mostly as an information source for customers, while another channel may serve as the
transaction channel. In that case, it is very difficult to determine which channel manager
should be rewarded for a sale.
REI’s efforts to build a multi-channel culture are best practices for other firms to adopt. The
retailer developed a focus on the customer, that cuts across channels — with a combination
of organizational restructuring, new incentives, training, and flexibility to enable the success
of the model, detailed in figure 13.
CEO
SVP, Marketing &
Merchandising
Merchandising
Private
Lable
Marketing
Online
Public affairs
SVP, Sales, Store
Development and Logistics
CFO
Finance
Store
IS
Logistics
Call center
Source: Forrester Research
Figure 13: Organization Structure at REI Outdoor apparel: for multi-channel success
Macy’s, on the other hand, introduced incentives for sales staff to fulfill needs regardless of
channel in its initiative called Magic Selling.
28
II Shaping Customer Experience
Discount products
across channels
(based on online
cost savings)
4. Pricing
Customers of each channel of an IMCR have different needs and the cost of serving these
channels vary. The question is whether pricing of merchandise should vary by channel or
not. It is a strong indicator of a retailer’s web strategy, if focused on aggressive e-commerce
sales growth or on delivering a consistent multi-channel customer experience.
To derive growth in an e-commerce channel, an IMCR would pass on the savings in
operational costs (such as rentals, staff expenses), while selling online to the customer in the
form of discounts. However, the stores would continue selling the same merchandise at fullprice. According to a CrossView multi-channel retailing study, 58% of top US multi-channel
retailers offered different prices across channels on the same item in 2010. On the contrary,
to deliver a seamless customer experience to a channel agnostic, retailers need to have
consistent pricing across channels. This is also relevant in countries like India where the
customer is not familiar with differential pricing based on retail format, as pricing is based
on Maximum Retail Price (MRP), where the manufacturer recommends the price at which
the retailer should sell the product. Retailers though sell slightly below MRP to attract more
customers to their stores.
Ensuring a consistent pricing across channels however is imperative for a multi-channel
retailer. Retailers like Tesco and Zara pursue consistent pricing across online and brick and
mortar stores. In case of a price differential across channels, an IMCR should match its online
and offline prices just as it matches prices with competitor stores. Best Buy is a good
example of an IMCR that offers price matches with leading online stores like Amazon. In case
price discrepancies exist between channels, some retailers effectively communicate this to
the store shopper, as in the case of Mountain Equipment Co-op (Canada), Sears (US) and
B&Q (UK).
If a price differential has to be introduced for additional services offered by the retailer,
customers need to be offered a transparent choice of channel and service options, and
differing prices that reflect cost to serve, e.g. Amazon offers the reliable comfort of its own
shop-front, or else a range of sellers on its marketplace with varying ratings and delivery
promises. Shoppers place different values on trust, speed, and certainty, and can choose and
pay accordingly.
While we advocate consistent pricing across channels, we need to understand that the cost
structure associated with each channel is different. The advantage gained by an IMCR from
the low operating cost of online channels must be balanced with the high operating costs of
physical retail, thus, offering the customer a consistent lower price across channels. This may
or may not be the lowest price offered across pure-play online retailers but will certainly
help retain customer trust.
29
Price-match
for price
discrepancies
Consistent Pricing across channels
Seamless
Customer
experience
Communicate
Channel-specific
promotions
Source: TCS Internal
Figure 14: Consistent Pricing for Seamless Customer Experience
In addition to pricing, assortment can be varied by an IMCR to create differentiation in
comparison to pure-play online retailers. The IMCR can sell exclusive products online or
focus more on large assortment categories that they may avoid in the store.
Manufacturers may also need to intervene to avoid excessive discounting of their products
by online retailers. This can be done by identifying the customer segments they want to
focus on, and then direct their trade discounts towards these channels. They can opt to use a
pay-for-performance mechanism to reward a retailer for the support they provide in
representing the brand and in acquiring new customers in the target group. This way the
performing retailer is in-sync with the manufacturer and earns higher margins. On the other
hand, retailers who do not support the brand and provide indiscriminate discounts will
suffer lower margins, forcing them to cut down on the discounts to the end customer.
Further, pricing of merchandise across channels may eventually evolve into dynamic pricing
similar to that adopted by airline companies. The retailers may enable the automatic rollout
of price based on the time of the day and even personalize pricing for customers, similar to
personalized promotions prevalent today.
The leading IMCR adopt the following best practices to ensure consistent pricing across
channels:
?
Changes in organization structure - One category manager for both online and store
businesses is recommended. This means having a single P&L for the entire organization
and not treating online business as a separate entity
?
Using Master Data Management (MDM) for better price management across items
?
Using pricing intelligence software that monitors prices across channels and
competitors to enable better pricing
There could be a few challenges while ensuring pricing consistency in multichannel retail.
For example, pricing differentiation may sometimes be required for seasonal products
offered to customers in different regions. Alternatively, different prices are offered at
differing times of the day to drive footfalls. This may cause confusion for the consumer and
potentially damage brand reputation.
30
II Shaping Customer Experience
Discount products
across channels
(based on online
cost savings)
4. Pricing
Customers of each channel of an IMCR have different needs and the cost of serving these
channels vary. The question is whether pricing of merchandise should vary by channel or
not. It is a strong indicator of a retailer’s web strategy, if focused on aggressive e-commerce
sales growth or on delivering a consistent multi-channel customer experience.
To derive growth in an e-commerce channel, an IMCR would pass on the savings in
operational costs (such as rentals, staff expenses), while selling online to the customer in the
form of discounts. However, the stores would continue selling the same merchandise at fullprice. According to a CrossView multi-channel retailing study, 58% of top US multi-channel
retailers offered different prices across channels on the same item in 2010. On the contrary,
to deliver a seamless customer experience to a channel agnostic, retailers need to have
consistent pricing across channels. This is also relevant in countries like India where the
customer is not familiar with differential pricing based on retail format, as pricing is based
on Maximum Retail Price (MRP), where the manufacturer recommends the price at which
the retailer should sell the product. Retailers though sell slightly below MRP to attract more
customers to their stores.
Ensuring a consistent pricing across channels however is imperative for a multi-channel
retailer. Retailers like Tesco and Zara pursue consistent pricing across online and brick and
mortar stores. In case of a price differential across channels, an IMCR should match its online
and offline prices just as it matches prices with competitor stores. Best Buy is a good
example of an IMCR that offers price matches with leading online stores like Amazon. In case
price discrepancies exist between channels, some retailers effectively communicate this to
the store shopper, as in the case of Mountain Equipment Co-op (Canada), Sears (US) and
B&Q (UK).
If a price differential has to be introduced for additional services offered by the retailer,
customers need to be offered a transparent choice of channel and service options, and
differing prices that reflect cost to serve, e.g. Amazon offers the reliable comfort of its own
shop-front, or else a range of sellers on its marketplace with varying ratings and delivery
promises. Shoppers place different values on trust, speed, and certainty, and can choose and
pay accordingly.
While we advocate consistent pricing across channels, we need to understand that the cost
structure associated with each channel is different. The advantage gained by an IMCR from
the low operating cost of online channels must be balanced with the high operating costs of
physical retail, thus, offering the customer a consistent lower price across channels. This may
or may not be the lowest price offered across pure-play online retailers but will certainly
help retain customer trust.
29
Price-match
for price
discrepancies
Consistent Pricing across channels
Seamless
Customer
experience
Communicate
Channel-specific
promotions
Source: TCS Internal
Figure 14: Consistent Pricing for Seamless Customer Experience
In addition to pricing, assortment can be varied by an IMCR to create differentiation in
comparison to pure-play online retailers. The IMCR can sell exclusive products online or
focus more on large assortment categories that they may avoid in the store.
Manufacturers may also need to intervene to avoid excessive discounting of their products
by online retailers. This can be done by identifying the customer segments they want to
focus on, and then direct their trade discounts towards these channels. They can opt to use a
pay-for-performance mechanism to reward a retailer for the support they provide in
representing the brand and in acquiring new customers in the target group. This way the
performing retailer is in-sync with the manufacturer and earns higher margins. On the other
hand, retailers who do not support the brand and provide indiscriminate discounts will
suffer lower margins, forcing them to cut down on the discounts to the end customer.
Further, pricing of merchandise across channels may eventually evolve into dynamic pricing
similar to that adopted by airline companies. The retailers may enable the automatic rollout
of price based on the time of the day and even personalize pricing for customers, similar to
personalized promotions prevalent today.
The leading IMCR adopt the following best practices to ensure consistent pricing across
channels:
?
Changes in organization structure - One category manager for both online and store
businesses is recommended. This means having a single P&L for the entire organization
and not treating online business as a separate entity
?
Using Master Data Management (MDM) for better price management across items
?
Using pricing intelligence software that monitors prices across channels and
competitors to enable better pricing
There could be a few challenges while ensuring pricing consistency in multichannel retail.
For example, pricing differentiation may sometimes be required for seasonal products
offered to customers in different regions. Alternatively, different prices are offered at
differing times of the day to drive footfalls. This may cause confusion for the consumer and
potentially damage brand reputation.
30
In addition to pricing, promotions need to be consistent across all channels, regions and
countries. Problems can arise when multi-channel retailers are running online-only or storeonly promotions. This needs to be communicated properly to the customer. For example,
Sears does not do in-store price-match items under online-only promotions.
Best Buy is a popular example of multi-channel pricing. It does a price match for all local
retail competitors and 19 major online competitors in all product categories, whenever a
customer requests for it. There are exclusions like promotions run by competitors,
BestBuy.com Clearance and Marketplace items. Additionally, the price match is limited to
one price match per identical item. This is also an important move in combating
‘showrooming’ (where customers experience the product in-store and buy it online at a
discounted price).
Alternatively, Walmart doesn’t lose much due to showrooming because it sells products in a
lot of other categories to customers who come in to browse electronics. Here, we may need
to remember that price is just one aspect of a compelling multi-channel experience, and
some retailers will be more comfortable in finding a profitable balance than others.
channel, like the internet. Many cross-channel shoppers are tech savvy and prefer to control
their experience, so retailers like PETCO, American Eagle Outfitters, and Famous Footwear
ensure that online and offline order and account information as well as applicable coupons
are easily accessible online.
Percentage of service requests handled
Others,
16%
Telephone,
36%
Live Chat/Web,
12%
5. Customer Services and Marketing
In brick and mortar retail, customer service is largely people-oriented and performed at
touch-points in stores such as interaction with sales staff, the customer service desk, and in a
limited manner, on the telephone. As the customer service function is localized to the store,
it is easier to control the quality of service.
Online channels today offer customers the convenience of tapping into the buying cycle at
any stage and have given rise to additional touch-points such as email, live chat, and social
media, with customer service now having both human and technology aspects. It is crucial
when prices and products are very similar between competitors and customer experience is
one way to differentiate a retailer from its rivals. Brands like Zappos have built up a
reputation of excellent customer service.
Advertising using search engines and social media plays a key role during the early stages of
the buying cycle when a customer has certain keywords or products in mind. Multi-channel
retailers need to align their promotions and loyalty programs to provide a seamless
customer experience across channels.
CSD @ store,
15%
Email, 21%
Source: Aberdeen Group Research
Figure 15: Mode of Customer Service Requests
Specific customer service channels are often managed by separate teams - one team may
deal with telephone queries, another with emails, or social media, or live chat. This kind of
A multi-channel retailer has the following major touch points where customers can
communicate with customer service staff.
?
Telephone
?
?
Customer service desk at store
?
Live chat or web
?
Others like social media
According to research conducted by the Aberdeen Group (figure 15), the telephone channel
has the most incoming service requests at 36%. At each of these touch points; retailers have
the opportunity to create a positive impression. Self-service is also an important service
31
32
In addition to pricing, promotions need to be consistent across all channels, regions and
countries. Problems can arise when multi-channel retailers are running online-only or storeonly promotions. This needs to be communicated properly to the customer. For example,
Sears does not do in-store price-match items under online-only promotions.
Best Buy is a popular example of multi-channel pricing. It does a price match for all local
retail competitors and 19 major online competitors in all product categories, whenever a
customer requests for it. There are exclusions like promotions run by competitors,
BestBuy.com Clearance and Marketplace items. Additionally, the price match is limited to
one price match per identical item. This is also an important move in combating
‘showrooming’ (where customers experience the product in-store and buy it online at a
discounted price).
Alternatively, Walmart doesn’t lose much due to showrooming because it sells products in a
lot of other categories to customers who come in to browse electronics. Here, we may need
to remember that price is just one aspect of a compelling multi-channel experience, and
some retailers will be more comfortable in finding a profitable balance than others.
channel, like the internet. Many cross-channel shoppers are tech savvy and prefer to control
their experience, so retailers like PETCO, American Eagle Outfitters, and Famous Footwear
ensure that online and offline order and account information as well as applicable coupons
are easily accessible online.
Percentage of service requests handled
Others,
16%
Telephone,
36%
Live Chat/Web,
12%
5. Customer Services and Marketing
In brick and mortar retail, customer service is largely people-oriented and performed at
touch-points in stores such as interaction with sales staff, the customer service desk, and in a
limited manner, on the telephone. As the customer service function is localized to the store,
it is easier to control the quality of service.
Online channels today offer customers the convenience of tapping into the buying cycle at
any stage and have given rise to additional touch-points such as email, live chat, and social
media, with customer service now having both human and technology aspects. It is crucial
when prices and products are very similar between competitors and customer experience is
one way to differentiate a retailer from its rivals. Brands like Zappos have built up a
reputation of excellent customer service.
Advertising using search engines and social media plays a key role during the early stages of
the buying cycle when a customer has certain keywords or products in mind. Multi-channel
retailers need to align their promotions and loyalty programs to provide a seamless
customer experience across channels.
CSD @ store,
15%
Email, 21%
Source: Aberdeen Group Research
Figure 15: Mode of Customer Service Requests
Specific customer service channels are often managed by separate teams - one team may
deal with telephone queries, another with emails, or social media, or live chat. This kind of
A multi-channel retailer has the following major touch points where customers can
communicate with customer service staff.
?
Telephone
?
?
Customer service desk at store
?
Live chat or web
?
Others like social media
According to research conducted by the Aberdeen Group (figure 15), the telephone channel
has the most incoming service requests at 36%. At each of these touch points; retailers have
the opportunity to create a positive impression. Self-service is also an important service
31
32
The benefit of integrating customer service functions for retailers is that they would be able
to provide services to individual customers far more efficiently, as well as generate insights
to improve the targeting of marketing communications. The customer can be provided with
a higher level of service, and this can lead to an increase in customer satisfaction and greater
loyalty.
IMCR also has a relevant case for cross-channel promotions. An inter-channel cross-selling
promotion might entail a coupon offered to internet users for purchasing an item in a retail
store. The objective of such a promotion could be to increase store traffic. Alternatively, a
store may offer a customer at the checkout counter a coupon that can be used for online
purchases.
Marks & Spencer estimates that: Spending of multi-channel (in-store, online, and mobile)
customer = 8 x spending of store-only customer
Here are some best practices to improve customer service:
?
Service options - Retailers should offer click-to-chat or click-to-call options and
experiment with in-store kiosks that link to live customer service representatives.
?
Consistent communication - Retailers should avoid frustrating consumers with their
inability to service them because information is unavailable or by making them repeat
information
?
Differential services - In the future, retailers will need to optimize the interactions across
channels for a combination of cost and satisfaction, thereby providing valuable
customers with different service options than other customers
Best Buy and Macy’s offer live chat and click-to-call options, and their customer service
representatives have visibility into both customer and order data.
The major challenges customers face while resolving a service request are:
?
Being forced to repeat themselves as customer service staff lack information regarding
the customer’s history and value
?
Long waiting times and being trapped in automated self-service lines
?
Not being able to switch between communication channels easily
From an IMCR standpoint, retailers should look out for policies that discourage employees
from not delivering good multi-channel service. For example, if stores make it difficult for
customers to return online products at the store, they risk losing future online sales because
of a frustrating returns process.
33
6. Customer Order Fulfillment
The ultimate aim of the multi-channel business is to deliver goods or services anywhere,
anytime and provide a great customer experience. Most retailers today have relatively
strong independent channel fulfillment processes; be it the availability of merchandise in
store or the capability to deliver within 24 hours. The RSR Omni Channel 2013 Benchmarking
Report has indicated that 64% of multi-channel retailers have little or no synchronization in
fulfillment. The single view of inventory and customer are fundamental enablers and
integration across channels for fulfillment is the key to customer satisfaction. More than 75%
companies consider seamless integrated multi-channel experience as a top business
challenge for their fulfillment strategy.
Retailers looking at multi-channel as a true enabler of their business must also look at
creating uniform experience of fulfillment across channels. Some of the key aspects of
fulfillment that need to be addressed are:
?
Enabling customers to purchase on any sales channel – store, e-commerce, mcommerce, kiosks and social commerce.
?
Allowing customers to take delivery through any mechanism possible like self-pickup,
express, or regular delivery.
?
Allowing customers to return products through a channel of their choice like dropping it
off at the store or predefined location, getting it picked up from home, or the customers’
location of choice.
These functionalities are the primary drivers for customer satisfaction.
The obvious key enablers for achieving excellence in fulfillment are having a unified sales
platform, single view of the inventory, robust order management, ability to allocate inventory to
demand in real-time, and cohesive view of the customer across channels. The growing
customer expectations mean that improvements are necessary in speed and quality of delivery.
Globally, several companies are setting up new benchmarks in fulfilment every day. Store
pick-up and home delivery options are provided across channels by the likes of Home Depot
and Callaway. Companies like Best Buy and Circuit City provide for a dedicated pickup area
in stores for online orders. In India, Flipkart, Jabong, and several others have setup their own
fleet for deliveries in metro cities. Jabong (through JaVAS) has diversified and is now
providing a fulfilment service to other e-commerce companies in India. The fledging ecommerce business has customers largely across metros and companies are using third
party vendors for last mile delivery services to further improve their delivery footprint. In our
view, companies may look at a three step approach to improve their fulfillment capabilities:
?
Leverage: Utilize existing infrastructure or develop only a basic set up while establishing
multi-channel business. This includes both a logistics network as well as technology solutions.
?
Optimize: Improve current state of fulfillment operations across processes, infrastructure,
and technology. This should enable the company to reduce overheads and improve
utilization levels.
?
Integrate: Once operations are optimized across all distinct fulfillment channels,
companies can enable integration across channels. It should include processes around
sales, delivery and returns, and be achieved through suitable technology interventions.
34
The benefit of integrating customer service functions for retailers is that they would be able
to provide services to individual customers far more efficiently, as well as generate insights
to improve the targeting of marketing communications. The customer can be provided with
a higher level of service, and this can lead to an increase in customer satisfaction and greater
loyalty.
IMCR also has a relevant case for cross-channel promotions. An inter-channel cross-selling
promotion might entail a coupon offered to internet users for purchasing an item in a retail
store. The objective of such a promotion could be to increase store traffic. Alternatively, a
store may offer a customer at the checkout counter a coupon that can be used for online
purchases.
Marks & Spencer estimates that: Spending of multi-channel (in-store, online, and mobile)
customer = 8 x spending of store-only customer
Here are some best practices to improve customer service:
?
Service options - Retailers should offer click-to-chat or click-to-call options and
experiment with in-store kiosks that link to live customer service representatives.
?
Consistent communication - Retailers should avoid frustrating consumers with their
inability to service them because information is unavailable or by making them repeat
information
?
Differential services - In the future, retailers will need to optimize the interactions across
channels for a combination of cost and satisfaction, thereby providing valuable
customers with different service options than other customers
Best Buy and Macy’s offer live chat and click-to-call options, and their customer service
representatives have visibility into both customer and order data.
The major challenges customers face while resolving a service request are:
?
Being forced to repeat themselves as customer service staff lack information regarding
the customer’s history and value
?
Long waiting times and being trapped in automated self-service lines
?
Not being able to switch between communication channels easily
From an IMCR standpoint, retailers should look out for policies that discourage employees
from not delivering good multi-channel service. For example, if stores make it difficult for
customers to return online products at the store, they risk losing future online sales because
of a frustrating returns process.
33
6. Customer Order Fulfillment
The ultimate aim of the multi-channel business is to deliver goods or services anywhere,
anytime and provide a great customer experience. Most retailers today have relatively
strong independent channel fulfillment processes; be it the availability of merchandise in
store or the capability to deliver within 24 hours. The RSR Omni Channel 2013 Benchmarking
Report has indicated that 64% of multi-channel retailers have little or no synchronization in
fulfillment. The single view of inventory and customer are fundamental enablers and
integration across channels for fulfillment is the key to customer satisfaction. More than 75%
companies consider seamless integrated multi-channel experience as a top business
challenge for their fulfillment strategy.
Retailers looking at multi-channel as a true enabler of their business must also look at
creating uniform experience of fulfillment across channels. Some of the key aspects of
fulfillment that need to be addressed are:
?
Enabling customers to purchase on any sales channel – store, e-commerce, mcommerce, kiosks and social commerce.
?
Allowing customers to take delivery through any mechanism possible like self-pickup,
express, or regular delivery.
?
Allowing customers to return products through a channel of their choice like dropping it
off at the store or predefined location, getting it picked up from home, or the customers’
location of choice.
These functionalities are the primary drivers for customer satisfaction.
The obvious key enablers for achieving excellence in fulfillment are having a unified sales
platform, single view of the inventory, robust order management, ability to allocate inventory to
demand in real-time, and cohesive view of the customer across channels. The growing
customer expectations mean that improvements are necessary in speed and quality of delivery.
Globally, several companies are setting up new benchmarks in fulfilment every day. Store
pick-up and home delivery options are provided across channels by the likes of Home Depot
and Callaway. Companies like Best Buy and Circuit City provide for a dedicated pickup area
in stores for online orders. In India, Flipkart, Jabong, and several others have setup their own
fleet for deliveries in metro cities. Jabong (through JaVAS) has diversified and is now
providing a fulfilment service to other e-commerce companies in India. The fledging ecommerce business has customers largely across metros and companies are using third
party vendors for last mile delivery services to further improve their delivery footprint. In our
view, companies may look at a three step approach to improve their fulfillment capabilities:
?
Leverage: Utilize existing infrastructure or develop only a basic set up while establishing
multi-channel business. This includes both a logistics network as well as technology solutions.
?
Optimize: Improve current state of fulfillment operations across processes, infrastructure,
and technology. This should enable the company to reduce overheads and improve
utilization levels.
?
Integrate: Once operations are optimized across all distinct fulfillment channels,
companies can enable integration across channels. It should include processes around
sales, delivery and returns, and be achieved through suitable technology interventions.
34
While companies proceed through their respective charters, it is important that they
maintain the brand salience.
III Deploying Processes and Systems
After the organization strategy for IMCR operations is finalized and the role of individual
channels is delineated, we should look at how to achieve the goals and execute the strategy.
Reviewing the processes and systems are the key drivers of a successful IMCR business.
One Product
Traditionally, retailers have been using a basic master data management (MDM) system
(generally a part of core ERP system) to capture only the essential elements of product
information. Physical attributes or technical specifications are not included as the customer
can see all information while buying the product in a physical store. As we move to channels
which disconnect the customer from the physical product, it becomes essential to
communicate all information that would generally be available to the customer when
viewing the product in-hand.
Companies started using the e-commerce platform’s MDM to capture additional information,
when they adopted internet as a retail channel. This meant that organizations now have two
or more systems where basic item information is being captured and these had little or no
synchronization between them. However, in an integrated multi-channel environment, it
becomes essential to have a single view of the product across channels (figure 16).
Internally
Integrated
Backward
Integrated
Disparate Product
Information
People
Large data
management team
Large content
management team
Large technology
support team
Mid-sized data
management team
Large content
management team
Mid-sized technology
support team
Small datamanagement team
Mid-sized content
management team
Mid-sized technology
support team
Process
Strong manual
processes around
content creation
and validation
Efficient systemic
controls
Strong vendor
collaboration
processes
Technology
Disparate MDM
systems
Robust MDM solution
with integrations
across all channels
Strong integration
with external
systems and data
control
Retailers need to use robust MDM solutions like Initiate or InfoSphere or develop a barebones MDM solution in-house, to achieve a unified view of the product across channels. The
basic data about the products are best adopted from the vendors. Retailers must therefore
look at extending the MDM solution to vendors or develop interfaces with the vendor’s
Product Lifecycle Management (PLM) tool or MDM systems.
Implementing a simple bespoke system can be a quick fix, as other options may take longer
to implement and have higher cost implications. Our view is that retailers should analyze
and identify what solution works best for them from medium to long term. According to
Aberdeen Group research, 50% of the best-in-class multi-channel companies are sharing
product information across channels.
Integrated Supply Chain
A decade ago, achieving collaborations with vendors at a strategic level was a rare
occurrence. Implementing the Collaborative Planning Forecasting Replenishment (CPFR)
model in the true sense may still be a challenge for most organizations, but there is a need
to collaborate at an operational level. Some of the supply chain aspects critical for a strong
multi-channel business are highlighted below:
1. Vendor information: It’s no longer about having the vendor’s data in place. It’s about
gaining access to information about vendors such as their production capabilities, lead
time on upcoming orders, and insights into their available production slots. A company
keen on multi-channel business should also focus on integrating with their vendors like
never before.
Companies must have real-time access to vendor information so that they can accurately
predict and promise delivery to customers across channels and locations. It also enables
them to plan their logistics efficiently. According to Aberdeen Group research, 54% of
the leaders and 34% of followers in multi-channel business are working on initiatives
that support such collaboration.
2. One inventory: Imagine if you have an inventory earmarked for stores but are not able to
fulfill online orders. A choice between an unhappy online customer, a lost order, or
incurring additional cost to fulfill an order are all undesirable solutions in today’s high
demand and customer-centric businesses. One of the main themes we speak of in the
multi-channel retail business is having a single and real-time view of inventory across
the organization. Ideally, it is best to have a single source of information for on-hand or
on-order inventory; however we know that companies operate in various ways. The
traditional retailers segregate and allocate inventory for various channels, when they
adopt multi-channel operations. This may be beneficial to ensure stock availability at
stores or at e-commerce order fulfillment centers. Multi-channel business though is
unpredictable and companies would still benefit by having an aggregated view of
inventory to respond to fluctuating demands across channels while at the same time
optimally utilizing their investment in goods. According to the RSR Research conducted
in June 2012, 61% of the multi-channel retailers consider cross-channel inventory
visibility to be a critical process while 37% have already completed synchronization or
are in the process of doing so.
Source: TCS Internal
35
Figure 16: Single View of Product
36
While companies proceed through their respective charters, it is important that they
maintain the brand salience.
III Deploying Processes and Systems
After the organization strategy for IMCR operations is finalized and the role of individual
channels is delineated, we should look at how to achieve the goals and execute the strategy.
Reviewing the processes and systems are the key drivers of a successful IMCR business.
One Product
Traditionally, retailers have been using a basic master data management (MDM) system
(generally a part of core ERP system) to capture only the essential elements of product
information. Physical attributes or technical specifications are not included as the customer
can see all information while buying the product in a physical store. As we move to channels
which disconnect the customer from the physical product, it becomes essential to
communicate all information that would generally be available to the customer when
viewing the product in-hand.
Companies started using the e-commerce platform’s MDM to capture additional information,
when they adopted internet as a retail channel. This meant that organizations now have two
or more systems where basic item information is being captured and these had little or no
synchronization between them. However, in an integrated multi-channel environment, it
becomes essential to have a single view of the product across channels (figure 16).
Internally
Integrated
Backward
Integrated
Disparate Product
Information
People
Large data
management team
Large content
management team
Large technology
support team
Mid-sized data
management team
Large content
management team
Mid-sized technology
support team
Small datamanagement team
Mid-sized content
management team
Mid-sized technology
support team
Process
Strong manual
processes around
content creation
and validation
Efficient systemic
controls
Strong vendor
collaboration
processes
Technology
Disparate MDM
systems
Robust MDM solution
with integrations
across all channels
Strong integration
with external
systems and data
control
Retailers need to use robust MDM solutions like Initiate or InfoSphere or develop a barebones MDM solution in-house, to achieve a unified view of the product across channels. The
basic data about the products are best adopted from the vendors. Retailers must therefore
look at extending the MDM solution to vendors or develop interfaces with the vendor’s
Product Lifecycle Management (PLM) tool or MDM systems.
Implementing a simple bespoke system can be a quick fix, as other options may take longer
to implement and have higher cost implications. Our view is that retailers should analyze
and identify what solution works best for them from medium to long term. According to
Aberdeen Group research, 50% of the best-in-class multi-channel companies are sharing
product information across channels.
Integrated Supply Chain
A decade ago, achieving collaborations with vendors at a strategic level was a rare
occurrence. Implementing the Collaborative Planning Forecasting Replenishment (CPFR)
model in the true sense may still be a challenge for most organizations, but there is a need
to collaborate at an operational level. Some of the supply chain aspects critical for a strong
multi-channel business are highlighted below:
1. Vendor information: It’s no longer about having the vendor’s data in place. It’s about
gaining access to information about vendors such as their production capabilities, lead
time on upcoming orders, and insights into their available production slots. A company
keen on multi-channel business should also focus on integrating with their vendors like
never before.
Companies must have real-time access to vendor information so that they can accurately
predict and promise delivery to customers across channels and locations. It also enables
them to plan their logistics efficiently. According to Aberdeen Group research, 54% of
the leaders and 34% of followers in multi-channel business are working on initiatives
that support such collaboration.
2. One inventory: Imagine if you have an inventory earmarked for stores but are not able to
fulfill online orders. A choice between an unhappy online customer, a lost order, or
incurring additional cost to fulfill an order are all undesirable solutions in today’s high
demand and customer-centric businesses. One of the main themes we speak of in the
multi-channel retail business is having a single and real-time view of inventory across
the organization. Ideally, it is best to have a single source of information for on-hand or
on-order inventory; however we know that companies operate in various ways. The
traditional retailers segregate and allocate inventory for various channels, when they
adopt multi-channel operations. This may be beneficial to ensure stock availability at
stores or at e-commerce order fulfillment centers. Multi-channel business though is
unpredictable and companies would still benefit by having an aggregated view of
inventory to respond to fluctuating demands across channels while at the same time
optimally utilizing their investment in goods. According to the RSR Research conducted
in June 2012, 61% of the multi-channel retailers consider cross-channel inventory
visibility to be a critical process while 37% have already completed synchronization or
are in the process of doing so.
Source: TCS Internal
35
Figure 16: Single View of Product
36
3. Order management: Prioritizing orders and ensuring smart execution of available-topromise (ATP) algorithms demand that we look at orders as a mission critical process.
Creating a single control area for orders, both internal store requests and direct
customer deliveries, gives organizations phenomenal flexibility. The ability to alter flow
of inventory in real-time is critical to ensure that companies do not invest in high levels
of safety stock. At the same time, it optimizes the use of logistics services. According to
Aberdeen Group research, 44% of leading multi-channel organizations have distributed
order management systems. RSR Research of leading multi-channel retailers has
identified that 58% allow inventory allocated for one channel to be used for another
channel’s fulfillment.
As shown in figure 17, as a first step, the multi-channel retailers can look at investing in
appropriate technology and processes that can integrate information derived out of various
customer touch points such as store, web, mobile, customer care, and social media. Once
the integrated information is available, companies can look at delivering uniform
experience, coordinated marketing campaigns, and various other aspects as may be derived
from this massive all inclusive dataset.
Integrating the various aspects of supply chain is one of the top requirements of companies
going multi-channel. This can be more challenging than other focus areas such as loyalty,
social media, and customer experience. This is because of the large number of systems and
processes that would need to be altered. Macys, for example, has been working on an
inventory visibility project for some time now and by the end of 2013, 500 of their 840 stores
will have the ability to pick online orders.
Terry Lundgren, CEO, Macys recently quoted an example from his stores with evident
satisfaction. Macy's had 1,600 place settings of Feista dishes remaining in many stores in
ones and twos, but they commonly sell in sets of eight or 12. The goods were effectively
unsellable where they were located, but the online inventory and store-level picking
permitted online sales to continue until they were sold through at full mark-up. This ensured
that all sales were all profitable.
Investment in appropriate technology solutions is the only way to achieve an integrated
supply chain. Aberdeen Group research pegs 98% on-time order delivery for leading multichannel players leveraging such systems.
One customer
The prime focus of companies remains better understanding of the new, empowered, and
omni-present customer. The Aberdeen Group’s research on omni-channel customer
experience highlights that four out of top five issues faced by multi-channel companies
today are directly related to customers.
Superior customer services, uniform experience across channels, cross-channel loyalty are
some of the expectations of the evolving customer. In our view, the fundamental aspect that
all multi-channel companies should work on is to improve customer satisfaction, by
developing a single personalized view of the customer. RSR research too highlights the lack
of single view of the customer as the largest organizational inhibitor with a whopping 55%
of the respondents agreeing to it.
Integrated
Channels
Crosschannel
Analytics
Disparate
Channels
Process
Disparate
marketing and
customer analytics
processes
Efficient customer
analytics
processes across
channels
Strong data-mining,
pattern recognition
processes
Technology
Disparate CRM
systems
CRM solution with
integrations across
all channels
Robust Advanced
Analytics and
Social Media Tools
Source: TCS Internal
Figure 17: One View of the Customer
Technology backbone
A majority of multi-channel initiatives are those that can be envisaged and implemented from
a solutions perspective. A robust yet nimble technology backbone is the need of the hour.
Most multi-channel retailers today are either facing inertia or are making inadequate efforts
to enhance their current back end systems to adapt to the multi-channel environment.
While in certain instances it may be appropriate to enhance low priority systems, it can be
counterproductive to do so for key areas like inventory and order management, Customer
Relationship Management (CRM) or advanced analytics.
Digital platforms allow customer information to be captured at every step and can uniquely
identify a customer. This is not the case in the traditional retail business. Loyalty programs do
provide some insights from the physical retail world, but it lacks details about customer
behavior at the store. There are differences across channels and retailers have been managing
disparate systems to capture customer information. This leads to a complicated web of
dissimilar experiences, misleading marketing campaigns, and complicated loyalty programs.
37
38
3. Order management: Prioritizing orders and ensuring smart execution of available-topromise (ATP) algorithms demand that we look at orders as a mission critical process.
Creating a single control area for orders, both internal store requests and direct
customer deliveries, gives organizations phenomenal flexibility. The ability to alter flow
of inventory in real-time is critical to ensure that companies do not invest in high levels
of safety stock. At the same time, it optimizes the use of logistics services. According to
Aberdeen Group research, 44% of leading multi-channel organizations have distributed
order management systems. RSR Research of leading multi-channel retailers has
identified that 58% allow inventory allocated for one channel to be used for another
channel’s fulfillment.
As shown in figure 17, as a first step, the multi-channel retailers can look at investing in
appropriate technology and processes that can integrate information derived out of various
customer touch points such as store, web, mobile, customer care, and social media. Once
the integrated information is available, companies can look at delivering uniform
experience, coordinated marketing campaigns, and various other aspects as may be derived
from this massive all inclusive dataset.
Integrating the various aspects of supply chain is one of the top requirements of companies
going multi-channel. This can be more challenging than other focus areas such as loyalty,
social media, and customer experience. This is because of the large number of systems and
processes that would need to be altered. Macys, for example, has been working on an
inventory visibility project for some time now and by the end of 2013, 500 of their 840 stores
will have the ability to pick online orders.
Terry Lundgren, CEO, Macys recently quoted an example from his stores with evident
satisfaction. Macy's had 1,600 place settings of Feista dishes remaining in many stores in
ones and twos, but they commonly sell in sets of eight or 12. The goods were effectively
unsellable where they were located, but the online inventory and store-level picking
permitted online sales to continue until they were sold through at full mark-up. This ensured
that all sales were all profitable.
Investment in appropriate technology solutions is the only way to achieve an integrated
supply chain. Aberdeen Group research pegs 98% on-time order delivery for leading multichannel players leveraging such systems.
One customer
The prime focus of companies remains better understanding of the new, empowered, and
omni-present customer. The Aberdeen Group’s research on omni-channel customer
experience highlights that four out of top five issues faced by multi-channel companies
today are directly related to customers.
Superior customer services, uniform experience across channels, cross-channel loyalty are
some of the expectations of the evolving customer. In our view, the fundamental aspect that
all multi-channel companies should work on is to improve customer satisfaction, by
developing a single personalized view of the customer. RSR research too highlights the lack
of single view of the customer as the largest organizational inhibitor with a whopping 55%
of the respondents agreeing to it.
Integrated
Channels
Crosschannel
Analytics
Disparate
Channels
Process
Disparate
marketing and
customer analytics
processes
Efficient customer
analytics
processes across
channels
Strong data-mining,
pattern recognition
processes
Technology
Disparate CRM
systems
CRM solution with
integrations across
all channels
Robust Advanced
Analytics and
Social Media Tools
Source: TCS Internal
Figure 17: One View of the Customer
Technology backbone
A majority of multi-channel initiatives are those that can be envisaged and implemented from
a solutions perspective. A robust yet nimble technology backbone is the need of the hour.
Most multi-channel retailers today are either facing inertia or are making inadequate efforts
to enhance their current back end systems to adapt to the multi-channel environment.
While in certain instances it may be appropriate to enhance low priority systems, it can be
counterproductive to do so for key areas like inventory and order management, Customer
Relationship Management (CRM) or advanced analytics.
Digital platforms allow customer information to be captured at every step and can uniquely
identify a customer. This is not the case in the traditional retail business. Loyalty programs do
provide some insights from the physical retail world, but it lacks details about customer
behavior at the store. There are differences across channels and retailers have been managing
disparate systems to capture customer information. This leads to a complicated web of
dissimilar experiences, misleading marketing campaigns, and complicated loyalty programs.
37
38
Achieve
How
Real-time
inventory
visibility
1.
Core system which holds real-time information on inventory
across all locations or sites
2.
Integration between core system and vendor's inventory or
order fulfillment system to accurately predict lead time
1.
An enterprise CRM system that will:
a. gather transaction information from all channels
b. capture interests, behavior, and actions on digital channels
c. manage loyalty
d. take inputs from advanced customer analytics
e. feed marketing engine for personalized campaign
One view of
the customer
management
f. feed sales channel with data from other channels and assist
personalized pricing
2.
Order
management
Advanced
POS
Contact
center system
Advanced
analytics
Significance
Critical
Illustration of a Marquee Specialty Retailer’s ‘Buy Anywhere, Fulfill Anywhere’
Journey, from TCS experience
Business strategy
The retailer wanted to improve its sales by adopting and enhancing different channels. The
focus was to achieve the following:
Critical
?
Enhance the existing in-store pick up process
?
Implement the ship from store process
?
Implement the site to store process
A team comprising of executives from customer, third party vendors, and TCS was formed.
Business problems
Curb the urge to enhance existing non-enterprise class CRM for
multi-channel retail. However, if enterprise class CRM is
available, look at re-implementation or modification by doing
thorough analysis
?
Reduction in customer base due to increased shipping costs
?
Reduction in sales with other retailers offering newer shopping options
1.
Advanced system which will enable optimized order fulfillment
?
Increase in stagnant inventory in stores
2.
System must interface with core inventory and CRM system for
inputs and provide feeds to logistics, sales channels, and
customer profile
?
Increased cancellation of orders due to non-availability of items in stores and
distribution centers (DCs) at the same time leading to loss due to non-movement of
items from other stores
1.
Advanced POS system would provide ability to pull out
analytics insights in near real-time to assist in cross-selling, upselling, or closing transactions. POS systems must integrate with
CRM and analytics
1.
Contact center systems must be upgraded to assist associates
with real-time inputs and feed from analytics and CRM about
specific customers
2.
Distinguishing between key and regular customers and
providing personalized service rather than a cookie cutter
response is vital
1.
Like with CRM, look at implementation or modification of
enterprise class analytics system
2.
Develop capabilities around customer analytics across channels
and product portfolio to drive personalized or optimized
marketing campaigns
3.
Critical
Solution implementation
Important
Important
?
Studied existing sales channels and refined the processes
?
Came up with new sales channels such as mobile phones and social networking sites
?
Finalized the new channels to be implemented and set up infrastructure
?
Set up rules for each sales channel
?
Integrated independent systems – Electronic Data Warehouse (EDW), Point of Sale (POS),
Radio Frequency (RF), e-Commerce – to define a streamlined process
?
The end customers needed the ordered items instantly and without any shipping
charges. To meet these demands, they introduced multiple facilities for order fulfillment.
These included:
Critical
Develop capabilities around channel and product analytics to
assist in channel-category role definition as well as pricing
strategy
There are numerous other functions (like content management, e-commerce and mobile
platform, social media, MDM, and partner relationship management) that may require
revamp or some degree of upgrade. The focus of leadership and technology teams should
be to deliver a long term solution which truly delivers in a multi-channel environment.
39
Key Takeaway:
Integrated Multi-channel Customer Engagement Model
?
An e-commerce website for customers to place their orders
?
An order management system for facilitating and maintaining the order workflow
?
A stores workforce system for accepting the order and fulfilling it
?
A customer care helpline for order cancellations
?
The existing e-commerce site was leveraged for in-store orders and to pass them to
relevant stores
?
The existing order management system was redesigned to address new in-store orders
automatically
40
Achieve
How
Real-time
inventory
visibility
1.
Core system which holds real-time information on inventory
across all locations or sites
2.
Integration between core system and vendor's inventory or
order fulfillment system to accurately predict lead time
1.
An enterprise CRM system that will:
a. gather transaction information from all channels
b. capture interests, behavior, and actions on digital channels
c. manage loyalty
d. take inputs from advanced customer analytics
e. feed marketing engine for personalized campaign
One view of
the customer
management
f. feed sales channel with data from other channels and assist
personalized pricing
2.
Order
management
Advanced
POS
Contact
center system
Advanced
analytics
Significance
Critical
Illustration of a Marquee Specialty Retailer’s ‘Buy Anywhere, Fulfill Anywhere’
Journey, from TCS experience
Business strategy
The retailer wanted to improve its sales by adopting and enhancing different channels. The
focus was to achieve the following:
Critical
?
Enhance the existing in-store pick up process
?
Implement the ship from store process
?
Implement the site to store process
A team comprising of executives from customer, third party vendors, and TCS was formed.
Business problems
Curb the urge to enhance existing non-enterprise class CRM for
multi-channel retail. However, if enterprise class CRM is
available, look at re-implementation or modification by doing
thorough analysis
?
Reduction in customer base due to increased shipping costs
?
Reduction in sales with other retailers offering newer shopping options
1.
Advanced system which will enable optimized order fulfillment
?
Increase in stagnant inventory in stores
2.
System must interface with core inventory and CRM system for
inputs and provide feeds to logistics, sales channels, and
customer profile
?
Increased cancellation of orders due to non-availability of items in stores and
distribution centers (DCs) at the same time leading to loss due to non-movement of
items from other stores
1.
Advanced POS system would provide ability to pull out
analytics insights in near real-time to assist in cross-selling, upselling, or closing transactions. POS systems must integrate with
CRM and analytics
1.
Contact center systems must be upgraded to assist associates
with real-time inputs and feed from analytics and CRM about
specific customers
2.
Distinguishing between key and regular customers and
providing personalized service rather than a cookie cutter
response is vital
1.
Like with CRM, look at implementation or modification of
enterprise class analytics system
2.
Develop capabilities around customer analytics across channels
and product portfolio to drive personalized or optimized
marketing campaigns
3.
Critical
Solution implementation
Important
Important
?
Studied existing sales channels and refined the processes
?
Came up with new sales channels such as mobile phones and social networking sites
?
Finalized the new channels to be implemented and set up infrastructure
?
Set up rules for each sales channel
?
Integrated independent systems – Electronic Data Warehouse (EDW), Point of Sale (POS),
Radio Frequency (RF), e-Commerce – to define a streamlined process
?
The end customers needed the ordered items instantly and without any shipping
charges. To meet these demands, they introduced multiple facilities for order fulfillment.
These included:
Critical
Develop capabilities around channel and product analytics to
assist in channel-category role definition as well as pricing
strategy
There are numerous other functions (like content management, e-commerce and mobile
platform, social media, MDM, and partner relationship management) that may require
revamp or some degree of upgrade. The focus of leadership and technology teams should
be to deliver a long term solution which truly delivers in a multi-channel environment.
39
Key Takeaway:
Integrated Multi-channel Customer Engagement Model
?
An e-commerce website for customers to place their orders
?
An order management system for facilitating and maintaining the order workflow
?
A stores workforce system for accepting the order and fulfilling it
?
A customer care helpline for order cancellations
?
The existing e-commerce site was leveraged for in-store orders and to pass them to
relevant stores
?
The existing order management system was redesigned to address new in-store orders
automatically
40
?
Order management, stores and merchandising systems were integrated to provide a
near-real time snap shot of inventory and fulfill the orders within the Service Level
Agreement (SLA)
?
A facility for store associates to work on orders in offline mode was set up as backup to
an automated system
?
A new email notification was sent to the customer at every stage of the order fulfillment
Outcomes
Business and Customer Benefits
?
Increased potential sales by providing alternate channels of shopping
?
Improved customer base by providing the customer with a new and improved shopping
experience with reduced shipping costs
?
Increased market share of sales by providing competitive offers and facilities to
customers
?
Improved inventory turnover ratio by facilitating alternate sales from various stores and
Dcs
1) Sales Channel Enablement
Sales Channels
Shop Online, Ship
Order to Home
Shop through Mobile,
Ship at Home
Scan Barcode,
Shop In-store
Inventory Fulfilment Source
Ship from Dotcom
Inventory
Source: TCS Internal
?
41
In-store Pickup
In-store Pickup, Order
Online Pick-up from Store
Fulfilment Channel
Site to Store
?
Reduction in slow-moving inventory by selling them through alternate stores
?
Improved brand value in local and international markets
?
Customers benefitted from the absence of shipping costs and shipping delays for instore pick-up orders which resulted in more business
?
Customers were able to experience the look and feel of the item before finalizing the
order in store. This improved customer satisfaction
?
Presence of customers in-store led to sale of additional items which increased the store’s
overall sales
?
Movement of stagnant items from the store led to reduced losses in the ship from store
channel
Figure 18: Sales Channel Enablement
2) Seamless Multi-channel Integration
Source: TCS Internal
Figure 19: Seamless Integration
42
?
Order management, stores and merchandising systems were integrated to provide a
near-real time snap shot of inventory and fulfill the orders within the Service Level
Agreement (SLA)
?
A facility for store associates to work on orders in offline mode was set up as backup to
an automated system
?
A new email notification was sent to the customer at every stage of the order fulfillment
Outcomes
Business and Customer Benefits
?
Increased potential sales by providing alternate channels of shopping
?
Improved customer base by providing the customer with a new and improved shopping
experience with reduced shipping costs
?
Increased market share of sales by providing competitive offers and facilities to
customers
?
Improved inventory turnover ratio by facilitating alternate sales from various stores and
Dcs
1) Sales Channel Enablement
Sales Channels
Shop Online, Ship
Order to Home
Shop through Mobile,
Ship at Home
Scan Barcode,
Shop In-store
Inventory Fulfilment Source
Ship from Dotcom
Inventory
Source: TCS Internal
?
41
In-store Pickup
In-store Pickup, Order
Online Pick-up from Store
Fulfilment Channel
Site to Store
?
Reduction in slow-moving inventory by selling them through alternate stores
?
Improved brand value in local and international markets
?
Customers benefitted from the absence of shipping costs and shipping delays for instore pick-up orders which resulted in more business
?
Customers were able to experience the look and feel of the item before finalizing the
order in store. This improved customer satisfaction
?
Presence of customers in-store led to sale of additional items which increased the store’s
overall sales
?
Movement of stagnant items from the store led to reduced losses in the ship from store
channel
Figure 18: Sales Channel Enablement
2) Seamless Multi-channel Integration
Source: TCS Internal
Figure 19: Seamless Integration
42
43
Key Takeaway: 21 Multi-channel Retail KPIs to Chase and Achieve
Conclusion
After a retailer or an FMCG company has embarked on an integrated multi-channel retail
journey, the next steps should involve gauging the effectiveness of these initiatives. This can
be measured by tracking and pursuing the KPIs on a regular and consistent basis. Key multichannel retail KPIs, in no particular order of importance, include:
As the multi-channel consumer has already emerged, the best way to act on this
opportunity is by adopting an IMCR approach that binds an organization’s proposition to its
customers, in a seamless manner. Sooner or later, adequate government regulatory support
will emerge to balance the interests of multi-channel businesses as well as customer
enablement and protection.
?
Average Transaction Size (ATS)
?
Average selling price
The business case for IMCR as a next generation way of retailing is compelling:
?
Customer conversion and retention rates across channels
?
?
Incremental channel sales – online/store/others
?
Percentage change in comparable channel sales
In the 2012 paper, we have already seen that the IMCR model has a direct positive
impact on a retailer’s operating metrics and have identified the core components of the
evolution.
?
Percentage change in comparable category and channel sales
?
?
Percentage change in comparable customer and channel sales
This year, we have noted how some leaders in the APAC market have initiated this
journey and have the potential to compare with the global leaders. At the same time,
they have improved their overall customer experience and brand affinity.
?
We have outlined specific initiatives to be undertaken for adopting the operating model
development, shaping customer experience, and deploying processes and systems
towards an IMCR model. We have provided examples like a marquee US specialty retailer
which has turned around its business performance in the last few years.
?
To summarize, well-developed frameworks, best practices, solution maps, and case
studies to pursue IMCR are available globally as well as locally, for any retailer to take cue
from and initiate their journey today.
?
Non-store markdowns vs. store markdowns
?
Non-store gross margins vs. store gross margins
?
Non-store inventory vs. store inventory
?
Sales per customer
?
Profit per customer
?
Lost sales
?
Share of multi-channel customers to total number of customers
?
Multi-channel customer spends vs. store customer spends
?
Customer satisfaction
?
Online channel influenced sales at store
?
Customer delivery metrics – BOPIS – Buy Online Pick In Store, Home Delivery, In-Store
Delivery
?
Channel-wise returns and refunds
?
Channel-wise promotions Impact
?
Total brand traffic – unique online vs. offline
With this paper, we hope we have provided you with insights that will encourage you to
embrace the methodology for IMCR.
44
43
Key Takeaway: 21 Multi-channel Retail KPIs to Chase and Achieve
Conclusion
After a retailer or an FMCG company has embarked on an integrated multi-channel retail
journey, the next steps should involve gauging the effectiveness of these initiatives. This can
be measured by tracking and pursuing the KPIs on a regular and consistent basis. Key multichannel retail KPIs, in no particular order of importance, include:
As the multi-channel consumer has already emerged, the best way to act on this
opportunity is by adopting an IMCR approach that binds an organization’s proposition to its
customers, in a seamless manner. Sooner or later, adequate government regulatory support
will emerge to balance the interests of multi-channel businesses as well as customer
enablement and protection.
?
Average Transaction Size (ATS)
?
Average selling price
The business case for IMCR as a next generation way of retailing is compelling:
?
Customer conversion and retention rates across channels
?
?
Incremental channel sales – online/store/others
?
Percentage change in comparable channel sales
In the 2012 paper, we have already seen that the IMCR model has a direct positive
impact on a retailer’s operating metrics and have identified the core components of the
evolution.
?
Percentage change in comparable category and channel sales
?
?
Percentage change in comparable customer and channel sales
This year, we have noted how some leaders in the APAC market have initiated this
journey and have the potential to compare with the global leaders. At the same time,
they have improved their overall customer experience and brand affinity.
?
We have outlined specific initiatives to be undertaken for adopting the operating model
development, shaping customer experience, and deploying processes and systems
towards an IMCR model. We have provided examples like a marquee US specialty retailer
which has turned around its business performance in the last few years.
?
To summarize, well-developed frameworks, best practices, solution maps, and case
studies to pursue IMCR are available globally as well as locally, for any retailer to take cue
from and initiate their journey today.
?
Non-store markdowns vs. store markdowns
?
Non-store gross margins vs. store gross margins
?
Non-store inventory vs. store inventory
?
Sales per customer
?
Profit per customer
?
Lost sales
?
Share of multi-channel customers to total number of customers
?
Multi-channel customer spends vs. store customer spends
?
Customer satisfaction
?
Online channel influenced sales at store
?
Customer delivery metrics – BOPIS – Buy Online Pick In Store, Home Delivery, In-Store
Delivery
?
Channel-wise returns and refunds
?
Channel-wise promotions Impact
?
Total brand traffic – unique online vs. offline
With this paper, we hope we have provided you with insights that will encourage you to
embrace the methodology for IMCR.
44
References
Industry Reports
45
?
FICCI-TCS, Consulting Whitepaper – Driving-Consumption-through-integrated-MultichannelRetailing, August 2012
?
Aberdeen Group, Omni Channel Retailing 2013, May 2013
?
Cisco, Operational Implications of Omnichannel Retailing, 2012
?
PwC, Selling to a multi-channel consumer, January 2012
?
RSR, Omni Channel 2012 : Cross Chanel Comes of Age, June 2012
?
RSR, Omni Channel 2013 : The Long Road to Adoption, June 2013
?
HBS, Crafting Integrated Multi-channel Retailing Strategies, May 2009
?
PwC, Global Multi-channel Retail Survey 2012, March 2012
?
BCSC, The Rise and Rise of Multi-Channel Retailing, 2012
?
Aberdeen Group , The Multi-Channel Retail Benchmark Report, December 2005
?
Zmags, Catalog to Commerce: Mobile Consumers and Multi-Channel Web Markets, April 2011
?
Martec International, BT Expedite & Epicor Research, Multichannel retailing 2010, 2010
Online Sources
?
Retailwire, Omni channel at Macys is about Inventory Too, April 2013 – Accessed 15 May 2013
?
Marketing Society (UK), E-commerce Marketing Excellence Award – UK retailer Case Study, 2012 –
Accessed 15 May 2013
?
UK retailer, Multichannel Retail Presentation by Head of the Group’s Multichannel Initiatives, 2011 Accessed 20 May 2013
?
MediaNama, Coca Cola India Launches Online Home Delivery Store, June 2013 - Accessed 20 May
2013
?
Times of India, Coke takes e-com sip, starts online home delivery store, May 2013 - Accessed 20 May
2013
?
MediaNama, Homeshop18 Launches Virtual Shopping Wall At Delhi Airport, January 2013 - Accessed
20 May 2013
?
Forbes, TechinAsia & BigFootRetailSolutions, Indian Online Retailer, Secondary Research, 2012-2013 Accessed 20 May 2013
?
Company’s Annual Reports & Financial Analyst Coverage, Indian Department Store Chain, Secondary
Research, 2012-2013 - Accessed 25 May 2013
?
RIS News Business, Best Buy Beats 25 Retailers in Cross-Channel Integration, February 2010 Accessed 03 June 2013
?
Comscore-Assocham, Study on State of e-commerce in India, September 2012
?
Comscore, Indian e-commerce - Landscape & Trends 2013, February 2013
?
Business Line, Bisleri sets up Shoppe for edge over rivals, June 2012 - Accessed 03 June 2013
?
IBM, Multi-channel retailing: The route to customer focus, 2007
?
Crain's New York Business, Bricks-and-mortar Macy's shows it can make big bucks online, January
2013 - Accessed 05 June 2013
?
Courier Express, Macy’s Overall Sales Grow from a Rapid Increase in On-line Sales, February 2013 Accessed 05 June 2013
?
MSLGROUP Asia, Tesco Wine Co-Buys People’s Insights, June 2013- Accessed July 2013- Accessed 10
July 2013
?
Econsultancy, Why is multi-channel customer service important, September 2011- Accessed 10 July
2013
?
Econsultancy, BT’s Warren Buckley on multi-channel customer service - Multichannel Customer
Experience Survey, September 2011 - Accessed 10 July 2013
?
Facebook Case Study, Kaya Skin Clinic: Generating walk-ins through the Page, 2012-2013 - Accessed
10 July 2013
?
Econsultancy, Best Buy fights showrooming with online price match, October 2012 - Accessed 10 July
2013
?
Time Magazine, Best Buy swears shoppers don’t have to bother showrooming anymore, February
2013 - Accessed 10 July 2013
?
PwC, Multichannel Consumers Take Control, December 2011
?
JustEnough, Taking an Integrated Approach to Multi-Channel Planning, 2011
?
PwC, Pick ‘n’ Mix - Meeting the demands of the new multi-channel shopper, April 2011
?
Verde Group, Understanding the Multi-Channel Shopper, 2011
?
Forrester Research, Retail Multichannel IT Road Map, July 2008
?
TCS, Integrated Multi Channel Retail, September 2009
?
TCS, Marquee US Specialty Retailer’s Multichannel Retail Journey Case Study, 2012
?
Marks & Spencer, Becoming an International Multichannel Retailer – CEO Presentation, 2012
?
Forrester Research, Best Practices In Multichannel Retailing, December 2006
?
HBS, Crafting Integrated Multichannel Retailing Strategies, January 2010
?
BCG, Regaining Price Control in a multichannel World, June 2013
?
Aberdeen Group , Trends in Customer Service, November 2012
?
Retail week Magazine, The challenge of multi-channel pricing, July 2011 - Accessed 10 July 2013
?
The Journal of Interactive Marketing, Key Issues In Multichannel Customer Management, August
2007 - Accessed 15 July 2013
?
Multichannel Merchant, The Ideal multi-channel org chart, May 2009- Accessed 15 July 2013
?
Business Line, Make consumer law e-com-friendly by Ankur Singla, May 2013 - Accessed 15 July 2013
46
References
Industry Reports
45
?
FICCI-TCS, Consulting Whitepaper – Driving-Consumption-through-integrated-MultichannelRetailing, August 2012
?
Aberdeen Group, Omni Channel Retailing 2013, May 2013
?
Cisco, Operational Implications of Omnichannel Retailing, 2012
?
PwC, Selling to a multi-channel consumer, January 2012
?
RSR, Omni Channel 2012 : Cross Chanel Comes of Age, June 2012
?
RSR, Omni Channel 2013 : The Long Road to Adoption, June 2013
?
HBS, Crafting Integrated Multi-channel Retailing Strategies, May 2009
?
PwC, Global Multi-channel Retail Survey 2012, March 2012
?
BCSC, The Rise and Rise of Multi-Channel Retailing, 2012
?
Aberdeen Group , The Multi-Channel Retail Benchmark Report, December 2005
?
Zmags, Catalog to Commerce: Mobile Consumers and Multi-Channel Web Markets, April 2011
?
Martec International, BT Expedite & Epicor Research, Multichannel retailing 2010, 2010
Online Sources
?
Retailwire, Omni channel at Macys is about Inventory Too, April 2013 – Accessed 15 May 2013
?
Marketing Society (UK), E-commerce Marketing Excellence Award – UK retailer Case Study, 2012 –
Accessed 15 May 2013
?
UK retailer, Multichannel Retail Presentation by Head of the Group’s Multichannel Initiatives, 2011 Accessed 20 May 2013
?
MediaNama, Coca Cola India Launches Online Home Delivery Store, June 2013 - Accessed 20 May
2013
?
Times of India, Coke takes e-com sip, starts online home delivery store, May 2013 - Accessed 20 May
2013
?
MediaNama, Homeshop18 Launches Virtual Shopping Wall At Delhi Airport, January 2013 - Accessed
20 May 2013
?
Forbes, TechinAsia & BigFootRetailSolutions, Indian Online Retailer, Secondary Research, 2012-2013 Accessed 20 May 2013
?
Company’s Annual Reports & Financial Analyst Coverage, Indian Department Store Chain, Secondary
Research, 2012-2013 - Accessed 25 May 2013
?
RIS News Business, Best Buy Beats 25 Retailers in Cross-Channel Integration, February 2010 Accessed 03 June 2013
?
Comscore-Assocham, Study on State of e-commerce in India, September 2012
?
Comscore, Indian e-commerce - Landscape & Trends 2013, February 2013
?
Business Line, Bisleri sets up Shoppe for edge over rivals, June 2012 - Accessed 03 June 2013
?
IBM, Multi-channel retailing: The route to customer focus, 2007
?
Crain's New York Business, Bricks-and-mortar Macy's shows it can make big bucks online, January
2013 - Accessed 05 June 2013
?
Courier Express, Macy’s Overall Sales Grow from a Rapid Increase in On-line Sales, February 2013 Accessed 05 June 2013
?
MSLGROUP Asia, Tesco Wine Co-Buys People’s Insights, June 2013- Accessed July 2013- Accessed 10
July 2013
?
Econsultancy, Why is multi-channel customer service important, September 2011- Accessed 10 July
2013
?
Econsultancy, BT’s Warren Buckley on multi-channel customer service - Multichannel Customer
Experience Survey, September 2011 - Accessed 10 July 2013
?
Facebook Case Study, Kaya Skin Clinic: Generating walk-ins through the Page, 2012-2013 - Accessed
10 July 2013
?
Econsultancy, Best Buy fights showrooming with online price match, October 2012 - Accessed 10 July
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46
TCS-FICCI – Massmerize 2013
Adapting to the Multi-channel Customer
A Roadmap for Integrated Multi-channel Retailing
About TCS’ Global Consulting Practice
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By tapping our worldwide pool of resources - onsite, offshore and nearshore, our high caliber
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GCP spearheads TCS' consulting capacity with consultants located in North America, UK, Europe,
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