Mind the Execution Gap

How retailers can keep pace with customer decisions and deliver a true omnichannel customer experience.

In the first blog of our customer experience series, we explored how digital disruption has impacted retail and the current state of play in the omnichannel era, with retailers pressured to deliver across many channels. While many retailers now claim to offer personalized assortments and omnichannel fulfillment options, the reality is somewhat different. Retailers have underestimated, or had a short-term view on how to deliver the ultimate customer experience across all these platforms. While beautiful front-end systems have been rolled out to delight the customers, there has been a failure to invest in the supply chain to keep pace. This has left a gaping hole in execution and customers are left in a situation where they are not getting what they want in the right timeframes, and at the right price. Retailers that have failed to invest in their supply chain are letting their customers down and failing to deliver their brand promises of speed, availability and pricing.

Indeed, what retailers have discovered is that becoming a true omnichannel retailer is much more complex than many retailers first think. It’s not just about delivering a well-designed front-end with personalized recommendations, it’s much more than this; legacy business-critical merchandising and supply chain systems are letting them down. This legacy infrastructure determines the execution of a well-planned strategy, but it does not fulfill the new requirement of speed in decision-making, where margins and inventory are lost and won through in-the-moment customer interaction.

The digital era has created a new kind of customer: One that isn’t afraid to shop around for the best price, especially when pricing across brands is so easy to access through a few swipes of a smartphone or clicks of a mouse. The new customer is also interested in getting what they want the moment they want it. It doesn’t matter how fancy an e-commerce site is, or how stylish a store is, if the retailer fails to deliver the customer will go elsewhere. In all probability to a competitor that does deliver on their speed, availability and pricing brand promises.

Aside from actually delivering on their brand promises,  what does a retailer need to do to deliver the right customer experience without corroding margins? They need to combine the speed of their decisions with their KPIs (margins, volumes, mark downs); something that most retailers are failing to do. To meet this challenge, retailers need to utilize the data they already have at their fingertips and analyze it to make sure their replenishment and pricing strategies match their customer experience expectations. And the most successful retailer will use a machine learning algorithm to help predict demand, speed up decisions whilst providing the incremental gains needed to get the right margins for success.

In our next blog, we’ll discuss how machine learning algorithms will become the backbone of next generation retail applications.

In the short video learn how supermarket chain Kaiser’s Tengelmann uses machine learning algorithms to optimize its replenishment.

For help in closing the execution gap, get in touch.

Matt Hopkins Matt Hopkins

is a Retail Industry Principal at Blue Yonder. Matt has spent over 20 years in the Retail Industry, working in Supply Chain & Merchandising roles before joining JDA, Oracle Retail, Salesforce and SAP in senior leadership roles.