JDA Finally Delivers The Cross-Channel Goods
I have been waiting patiently and not so patiently for retail enterprise apps providers to come up with an answer to retailers’ most pressing cross-channel commerce questions – particularly around fulfillment. Up until now, I count only two major players, and that’s IBM and Manhattan. However, with what JDA showed at their Focus user conference last week, I can finally add one more to the list. Yes, JDA.
The two most exciting things that I saw at the conference came from JDA’s Customer Engagement Cloud solution. Yeah, the name’s not great. Cloud is true, no gripes there except for maybe its general over-use in the industry. Customer – I can appreciate why JDA uses it, but when combined with “engagement” it implies something far more on the marketing side than JDA really delivers. However, don’t let that deter you.
I have also long sought a solution that moves beyond the poor set of heuristics that store employees use when they try to locate stock to satisfy customer demand – the old save-the-sale thing. Normally, even at retailers that have been doing it well for a long time, it goes something like this:
Associate: I’m sorry, we don’t have that [insert size, color, whatever] here at the store. But I’d be happy to find it in our system and ship it directly to your house for free.
Customer: Okay. That works. Let’s do it.
Associate: Well, there are 10 other stores that carry this item. Our Chicago store has 30 on hand, so I’ll order it from them. I have no idea if that’s actually the best place to get it from, but since they have the most on hand of all the stores that carry it, at least I know I have good odds that it’ll actually be there and you’ll get the right item.
Customer: Uh, okay. But now you’re kind of making me nervous.
That kind of process definitely saves the sale – but was it the most profitable way to get the item to the customer? It might not have been. It might have cost the retailer more in shipping than in the increased risk of a stockout if the associate had selected the item from a closer, but less well-stocked store.JDA announced a new capability within the Customer Engagement Cloud called “Profitable Promise” – it applies an algorithm to the save the sale problem, taking the decision out of the associate’s hands and placing it in a realm where there is much better information and visibility to make a decision as to where to source a product from.
Now, in all fairness, JDA is not the first solution provider to tackle this problem. I’ve seen stuff from Manhattan that addresses the exact same issue and thinks through all of the exact same problems in starting to open up stores to other sources of demand besides what walks through the door.
But JDA takes it one step further, with a very timely addition that addresses the flip side of save the sale – showrooming. Basically using the same kinds of logic (with a lot more emphasis on price), if a customer comes in and says, “Hey I want this from you and I’ll buy it right now, but Amazon has it for $10 less – will you match the price?”, the associate isn’t left wondering what the heck to say or scurrying off to find the store manager.
Instead, she puts the proposed price into her mobile device, and gets back basically a counter-offer, either a direct price match, or some other type of discount. The offer is based on whatever is currently known about the item in question – how much does the retailer have, how much margin is in the item, is it coming up on a markdown, all that kind of stuff – as well as what is currently known about the customer. Nothing, if the customer hasn’t been ID’d. But maybe a better offer for a better customer if more is known.
I haven’t seen anything else that does this.
Now, again, to keep it real, our research shows that a pretty good chunk of retailers – roughly a third – still say they haven’t seen showrooming in their stores. And another third-plus say they don’t have any policy on what to do about showrooming from a pricing perspective.
Let’s face it, though. The store employee has the least amount of information at their disposal to make a price match kind of decision, and the store manager isn’t that much better off. But these are the people that have to deal with these front-line interactions with customers, often having to explain why a retailer’s policies are so contradictory or non-existant without really understanding why themselves. Anything that a retailer can give a store employee to help reclaim some of that territory is going to help with customer engagement. Oh yeah, like “Customer Engagement Cloud”.
Good job, JDA. Anything that can help retailers retain any kind of competitive edge against price transparency and cross-channel upheaval is critical, these days.