Ris 2015 deck

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Omnichannel’s Biggest Challenge – Leadership & Corporate Culture

Anoop KulshreshthaVice President, Digital Technology

Barneys New York

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Omnichannel by numbers:

• E-Retail sales are forecast to increase by 62% to $327 billion in 2016 from $202 billion in 2012.

• Sales on ‘smartphones’ will touch $27 billion.• 2014 Cyber Monday had a peak traffic of 13

million V/PM. In 2012 it was 8.5 million V/PM.• 63% of searchers use multiple devices to find

local business.• 80% of local searches on mobile phone

converts.

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Omnichannel goes beyond fulfillment

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Omnichannel Framework• Synchronized operating model in which all of

company’s channels are aligned and present a single face to the customer.

• Brand effectively operates as a single channel, orchestrating high value customer experience across all touch points.

• Customer’s each interaction becomes seamless extension of the previous interaction.

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Omnichannel Framework• Omnichannel retailers are nimble enough to

respond to customer’s increasingly dynamic, accessible and continuous decision making.

• Customer’s expectations: Know Me, Show Me You Know Me, Enable Me & Value Me.

• Multi-channel is NOT omnichannel.

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Omnichannel Opportunities

• Cohesive & collaborative internal processes.• Designing omnichannel capable fulfillment

operations.• Customer centricity• Data driven decision management.

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Cohesive & collaborative internal processes – Failure points

• Technology infrastructure investments before equipping internal processes.

• Lack of visibility in any given team’s working.• Structural constraints such as

disproportionately sized business within a brand.

• Not all channels are owned by the same organization within the company.

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Cohesive & collaborative internal processes - Solutions

• Every department needs to be in complete alignment.

• Create synchronized channel SLA, goals and targets.

• Creating omnichannel organization models should be a priority.

• Move beyond traditional business KPI to measure success.

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Cohesive & collaborative internal processes - Solutions

• Promote cross functional teams– Leader is an enabler– Managing diversity of culture and thoughts– Trust is even more crucial for success– Clear goals are drivers of autonomy– Early “wins” are important– Constant communication is the glue

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Designing Omnichannel Capable Fulfillment Operations

• Buy online and pick it up in the store.• Walk to a store, try it on & then get it

delivered to your home.• Know exact shipping costs & delivery time

before placing an order.• Buy online and then return it at the store.• Get your order fulfilled from multiple

locations.

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• Evaluate synergies across channels.

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• Find the best operating methods.

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• Optimal technology stack for each operating method

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• Define optimal flow path

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• Choose specific technology– Pick by paper/RF / by voice / by light– Balance between performance, flexibility and cost.

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Customer vs Product Centricity

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Customer Centricity – Building Blocks

• Customer Life-Cycle View– Reorient entire business model around customer.– Clear articulation of the value that customer

represents to the bottomline.– Defined and quantified customer segmentation

strategy.– Business streams deliver maximum value to the

best customer for the least cost.

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• Solution Mindset– Solutions replace products as basic customer

value preposition.– Work with competitors and partners to fulfill

customer needs.– Go beyond off-the-self solutions to customized

products.

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• Can-Do Customer Interface– Deploy skills and authority to tailor solutions at

point of contact.– Develop more self service options for the

customers.

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• Fit-For-Purpose Business Processes– Reduce organizational complexities for your most

profitable and lucrative products.– Minimize one off workarounds.

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Data-Driven Decision Management

–DDDM is an approach to business governance that values decisions that

can be backed up with data that can be verified.

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Data-Driven Decision Management

• Google Project Oxygen

– 8 simple rules for being a better manager.

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Data-Driven Decision Management- Project Oxygen

• Step 1- Collect Data– Start with a question and define what information

is required. “Do managers actually matters?”• Step 2 – What data to use– Existing data ( reviews) – New data (Segmentation into top and bottom

quartile)

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Data-Driven Decision Management- Project Oxygen

• Step 3- Analytics– Regression analysis reveals big difference in team

productivity, happiness and turnover.• Step 4 – New data collection. – HR instituted a great manager award.– Additional data used for text analysis.

• Step 5 – Using the insights– 8 point recommendation on how to be a better

manager.

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Data-Driven Decision Management – Applications in Retail – Data Science

• Advanced Data Modeling Perquisites

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Data-Driven Decision Management – Applications in Retail

• “Past results do not guarantee future performance ” – Modeling future based upon learning from past is not enough.

• Clear & diversified data strategy - prepare multiple data sources including external data.

• Use multiple models:– RFM model (recent – frequency – monetary value)– Advanced model to predict customer reaction to

product / price points / brands.

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• Point of Sale– Are there more efficient ways to market?• Email/Text based targeted marketing through POS• Ability to ‘flash sale’ to the customer based upon past

purchase history.

– Do I have the right amount of store inventory?• Past order history can provide an insight into strong

and lean periods for seasonal and cyclic products.

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• Price Optimization– Retail inventory, pricing and POS data spread across

multiple systems– Faster processing time to answer questions like:

• Are higher price products selling in select markets?• Should we have geography based inventory/pricing

optimization?

– Leverage big data to migrate all required data to centralized hub.

– Use techniques such as MapReduce to present daily intelligence in a consolidated pricing portal.

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Questions…..