Last week I attended the RIS News Cross-Channel Executive Summit. From what I heard from attendees, while the event may not be ultimately categorized as the most inspirational version, that reflects nothing on the content. More, it’s a reflection of the nitty-gritty work that remains to be done to bring cross-channel visions into reality.

Along those lines, I attended a session and had a series of conversations that set me thinking about omni-channel architecture. The session, presented by Anoop Kulshreshtha of Vitamin Shoppe, was entitled “Becoming Omni-Channel Ready for 2017”. He reviewed the core elements of what he considers to be essential omni-channel architecture, if you truly want to be prepared for all the ways that a shopper can – and might – cross channels on their path to purchase. I’ll fill in from the side conversations I had as I go.

Essential elements of an omni-channel architecture:

A Single View Of The Customer

Kulshreshtha described this as an MDM, unsexy kind of thing. The kind of thing that is difficult to convince the business to pay for, as it involves no immediate benefit. It’s not until you layer insight tools on top of that single view that things become interesting. But he drew an interesting analogy to product information. While capturing a common source of product information, and making sure that it’s accurate and to a degree of granularity that is useful across the enterprise (cube dimensions on a pallet being one more esoteric data element that nobody but supply chain cares about, for example), can be challenging, it’s nothing on doing the same for customer data. Address validation is difficult enough, but tack on understanding that “Liz” and “Elizabeth” and “Betsy” may all be the same person. And managing the intricacies of households on top of individuals – and understanding the difference between, for example, four people living at the same address, but existing as two separate households.

When we survey retailers about their progress against an omni-channel strategy, and we get back “we’re working on it”, a lot of times that means that they’re still consolidating into one view of the customer as their primary activity. Forget about fancy in-store fulfillment or cross-channel customer metrics. This has created some sense of disillusionment out there for the retailers pushing hard on cross-channel. They hear that their peers are making strides, but it’s very imperfect – and something as seemingly simple as one view of the customer is actually one of the major roadblocks.

Order Management

For Kulshreshtha, the biggest benefit of an OMS (order management system) is making sure that the multiple inventory touchpoints don’t over-promise and under-deliver on customer expectations. His point is that with multiple channels, if you have a single view of inventory and are trying to promise against that inventory, it can create more demand for inventory than the retailer can keep track of. Even retailers with as much cross-channel sophistication as Best Buy have had their challenges, as last holiday season proved.

What’s interesting to me is that the retailers who originally embraced order management as a way to get a better handle on what was happening upstream in their supply chain – distributed order management in the old-school supply chain sense – are the ones that seem to be doing best with adding on the customer side of order management. I remember the conversations as early as 2004-05, when retailers started looking around at their internal systems and realizing that merchandise order management wouldn’t cut it – didn’t get granular enough on the customer side. And that eCommerce platforms and Point of Sale (POS) solutions maybe captured all that customer information about the order, but couldn’t see it through to fulfillment. I think if you consider OMS to be a customer-focused investment, you’re going to win the battle but lose the war: you’ll do a good job capturing customer orders and figuring out whether they’ve been fulfilled or not, but you’ll still have little-to-no capability when it comes to finding the right inventory to promise to a customer order – and make sure they actually get it. And that’s ultimately where omni-channel is going to be won or lost. For retailers, even customer centric ones, it’s still all about leveraging inventory to meet demand.

Kulshreshtha has four other components to his omni-channel architecture, which I’ll cover next week, along with one area that he didn’t touch on that I think is critical, so stay tuned!